Julia Simonova Julia Simonova Senior Director of Marketing - Juliet Media

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Telecom Tech Businesses Operating Under The Sanctions Radar?

  • After Russia's armed invasion of Ukraine, the United States and Western countries imposed harsh sanctions against Moscow. Gradually, other states joined the restrictions, for example, Japan and South Korea. These measures forced many companies to leave Russia - to freeze or close existing projects, to fire or relocate the staff to other countries. China, unlike Western countries, continues to do business with Russia. Beijing denounced the war and called on the parties to negotiate while buying Russian oil, which the European Union embargoed at a deep discount. And if corporations such as Apple, Microsoft, AMD, Intel, and Google stopped deliveries of their products and services to Russia, then the Chinese Huawei managed to close several stores temporarily. At the beginning of the war, which in Russia is called "a special military operation," there were problems with logistics.


    Against this background, according to Kommersant's sources, Huawei wants to stay in Russia and even began personnel expansion by activating the hiring of employees in its Russian division. In particular, the company tripled the number of vacancies in the field of sales and more than doubled the number of specialists in the production and maintenance of electronics. 

    Kommersant's sources suggest that the company will either organize equipment supplies through the CIS (grey imports) or create a separate new brand to operate in the country. 

    According to the HeadHunter portal, the Russian division of Huawei has stepped up the search for highly qualified specialists in the field of information technology and communications (the number of vacancies increased by 33%), equipment maintenance and installation specialists (by 186%), as well as students and trainees (by 132%). 

    HeadHunter specified that Huawei, in particular, requires network engineers, base station operators, and access and data transmission equipment (GPON) engineers. The company itself acts in Chinese and does not comment on its actions. But she wants to fill the niche formed after the departure of recent competitors - Cisco, Nokia, Ericsson, and HPE.

    Kommersant's sources say that in the end, Russia will "give" its specialists to the Chinese company to buy later developments. 

    Cooperation with Russia does not prevent Huawei from actively developing business in the EU countries. For example, in early July, a Chinese corporation introduced its wireless headphones in France in collaboration with the French acoustic technology company Devialet France. 

    The Chinese giant is not afraid of falling under secondary sanctions for doing business in Russia. Huawei is firmly entrenched in Western markets, and imposing sanctions against the company may be more expensive. For example, the United States needs more than three billion dollars to eliminate Huawei and China's ZTE.

    However, the United States recently reported that Huawei equipment ended up near secret American facilities. According to CNN, an FBI investigation found that the company supplied equipment for cell phone towers near US military bases in the countryside, even if it didn't make economic sense. 

    Shortly after these reports, a TASS source at the company said that Huawei cut more than 50% of freelancers who worked for the company under a contract and stopped hiring new employees in Russia. The source said that the delivery of equipment to the Russian market has also been suspended.


    But not all companies with Russian roots or a broad representation in Russia are as lucky as Huawei.

    For example, in April, Italian cybersecurity authorities banned the government and all officials from working with Russian companies specializing in information security - Group-IB, Positive Technologies, and Kaspersky Lab.

    In 2013, Group-IB received a license from the Federal Security Service of Russia to process information constituting a state secret. Some employees of Group-IB were once accused of leaking information and fraud with the data of clients of large American corporations. And the company's founder, Ilya Sachkov, is now in the Lefortovo pre-trial detention center on treason charges. 

    Bloomberg reported last year's end that Sachkov was transferring confidential data from Russia abroad as he wanted to strengthen ties in the West - including with Europol and Interpol - for Group-IB to enter the international market. At the same time, the company continued to work with the Russian authorities on government contracts.

    The Sachkov case may also be related to the US transfer of information about the involvement of Russian hackers in the attacks before the US presidential election in 2016. According to the agency, the hackers are allegedly related to the Fancy Bear group. She is associated with Russian military intelligence. 

    However, according to unofficial data, after the start of the war between Russia and Ukraine, Sachkov had his SIM card restored, and he continues to manage his social media accounts. Sachkov did not admit guilt in treason, but it cannot be ruled out that he could cooperate with the investigation.

    On April 6, Group-IB signed a partnership agreement with the Ural Center for Information Security, headquartered in Yekaterinburg, Russia, to create the first MSSP to protect Russian companies from cyberattacks. 

    Against ongoing hostilities with Ukraine, Sachkov turned to Russian President Vladimir Putin and asked to be released from prison, as "his country needs him, especially now."


    Although most of the staff at Nginx, the creator of the web server and mail proxy, is based in the US, a few people continue to work from Russia, including the head of technical support and several senior software engineers. Nginx seems to be the core of the Nginx team, even after its American F5 Networks purchase.

    The Nginx IP is the subject of a legal dispute in the United States. F5 requires full ownership of the IP, and the Russian company claims that the Nginx source code is based on their developments. 


    Netcracker Technology, which specializes in BSS, OSS, and other business support systems, found itself in a highly vulnerable position after the war. The company is headquartered in Massachusetts and is wholly owned by the Japanese NEC. Still, most of the company's projects were carried out by staff based in the post-Soviet space - including a large development center in Russia, which employed more than a quarter of the employees. Only India had more than 40 percent. Ukraine and Belarus accounted for 12 and 5 percent of workers, respectively. 

    Netcracker has led several significant business projects in Russia in cooperation with local operators, including MegaFon, VEON, ER Telecom, and others, for which Netcracker develops OSS/BSS systems. 

    Netcracker did not state its position on the Russian armed invasion for almost a month. But later, after severe pressure from the Ukrainian market, it announced a freeze for an indefinite period of its programs in Russia. 

    The main products of BSS/OSS Netcracker were developed on Russian sites. More than 2,000 employees work for Netcracker in Russia. There are no reports in open sources about any relocation of personnel. So, in all likelihood, it will take years for the company to regain experience and build a new team. 

    The company may try to reorient its activities based on the workforce in India quickly. But training new staff will take time. The Indian office staff lacks sufficient experience servicing OSS/BSS projects. The employees of the American office also do not yet have enough expertise to replace Russian employees to support projects. 

    Staffing can also be difficult for the company. Netcracker had eight training centers in Russia and Belarus out of 12 worldwide. Only one of them is located in India and not on the territory of the post-Soviet space. 

    However, the company announced several deals with international service providers in the spring and summer. So in July, the Belgian operator Telenet announced the introduction of Netcracker Digital BSS. In June, it became known that the Danish provider Nuuday had entrusted Netcracker with the transformation of the business. In the same month, a deal with Netcracker was announced by the French company Altice. It plans to implement Cloud BSS and Professional Services in its offices in Portugal, France, Israel, the United States, and the Dominican Republic. 

    It is unknown whether Russian employees participated in the projects and whether regulators checked these transactions. But, most likely, soon, Netcracker will have to pay great attention to the implementation of projects in the face of a possible shortage of personnel.


    Julia Simonova
    About Julia Simonova Julia Simonova works as Senior Director of Marketing at Juliet Media
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