Huawei Technologies “dominates” the mobile-phone sector in Iran and “plays a role in enabling Iran's state security network,” according to news reports.

The Wall Street Journal is also reporting that China-based Huawei will be installing technology that lets Iranian police “track” callers “based on the locations of their cell phones.”

Human-rights advocates claim “dozens” of dissidents “were traced and arrested through the government's ability to track the location of their cell phones,” the Journal said. Iran increased monitoring of the public after anti-government protests connected with the nation’s stormy 2009 election.

The Journal said Huawei allegedly stopped text messaging services and blocked Skype in 2009 for MTN Irancell. The company denies the allegations. The majority of MTN Irancell is owned by the Iranian government, the Journal reported.

In addition, Iran censors the Internet, according to media reports. In fact, during a sales pitch for news-related mobile technology, Huawei “representatives emphasized to the Iranians, that, being from China, they had expertise censoring the news,” the Journal said.

It was also reported that Huawei sometimes partners with Zaeim Electronic Industries, an electronics company in Iran that provides products to intelligence and defense offices, and to the Islamic Revolutionary Guards Corps. (The Revolutionary Guards allegedly played a role in the plot to kill Saudi Arabia's ambassador to the United States, U.S. officials allege.)

Meanwhile, Huawei defends its actions in Iran. William Plummer, Huawei's vice president of external affairs, was quoted by the Journal, "What we're doing in Iran is the same as what we're doing in any market. Our goal is to enrich people's lives through communications."

Huawei has about 1,000 employees in Iran. Since 1999, the company has played a role in the nation’s telecommunications sector.

Iran's telecommunications sector generated some $9.1 billion in revenues in 2010, The Journal said. The mobile-phone industry and other sectors continue to increase in Iran, and in 2010 Iran had some 66 million mobile-phone subscribers , the Journal reported, citing data from Pyramid Research.

In commenting on the Journal story, The Next Web said that “Huawei’s technology is harmless until it’s placed in the wrong hands.”

“In the case of the Iranian contract, the China-based company is also clearly trying to convince itself and the world that the use of their technology in Iran is no different from its use in the U.K. or Canada, and that the Iran deal is nothing short of kosher,” the Next Web adds.

In other recent news on technology and Iran, TechZone360 carried a story which reported that Iran stated that the “use of virtual private networks (VPN), or proxy software, which Iranians mainly use to get access to the blocked social networking service Facebook, was a crime.” Some 17 million Iranians have an account on Facebook which they access each day via VPN or proxy software software.