China's Huawei Technologies Co Ltd, the world's No.2 telecom equipment maker, expects a 2012 profit gain after reporting a sharp drop a year ago, thanks to new projects and increased sales in high-end mobile phone markets such as Japan.

Net profit is expected to be around $2.4 billion, rotating and acting Chief Executive Officer Guo Ping said in a New Year message to employees on Friday. That would be a rise of 29 percent from 11.6 billion yuan ($1.86 billion) in 2011, based on his forecast.

A major Iranian partner of Huawei Technologies offered to sell at least 1.3 million euros worth of embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator in late 2010, documents show.

Chinese telecoms equipment vendor Huawei Technologies plans to double its employees in Europe over the next few years and is setting up a research center in Finland aimed at developing new smartphones, it said on Monday.

The expansion plans for Europe come two months since U.S. lawmakers alleged that Huawei's equipment could be used for Chinese espionage. The company has also been barred in Australia from tendering in its $38 billion high speed national high-speed broadband network project due to unspecified security concerns.

Chinese equipment maker Huawei continues to make inroads into territory previously held by its western rivals, having just signed an important managed-services deal with 3UK, the small UK operator owned by Hutchison Whampoa (Hong Kong).

The arrangement will see Huawei (Shenzhen, China) handling service management and operations for 3UK’s core network, transport network and ICT applications.

It has chosen India’s Tech Mahindra (Pune, India) as a partner for the work on ICT applications.

China’s ZTE has received a substantial funding boost from the China Development Bank (CDB) in a deal the equipment maker claims will drive overseas investment and business development.

The agreement increases ZTE’s financing facility with the CDB to $20 billion from the $15 billion arranged in 2009 – itself an extension of the original facility of $8 billion set up in 2005.

Singapore:

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The United States is exhibiting a "Cold War mentality" with its fears that Chinese telecommunications equipment manufacturer Huawei poses a security risk because of its ties to the Communist Party, China's commerce minister said on Saturday.

The U.S. House of Representatives' Intelligence Committee warned last month that Beijing could use equipment made by Huawei, the world's second-largest maker of routers and other telecom gear, as well as rival Chinese manufacturer ZTE, the fifth largest, for spying.

China Unicom, the country's second-largest mobile carrier, expects to begin selling Apple Inc's latest iPhones this year and has set an ambitious target of having 100 million 3G users by end-2012 as it tries to attract high-end users to lift profits.

"The iPhone 5 is currently being tested by the authorities, and we'll begin selling it once it has been approved," China Unicom (Beijing, China) chairman Chang Xiaobing told a news conference.

Under-fire Chinese telecoms equipment vendor Huawei Technologies Co Ltd is reaching out to one of its sternest critics: a hacker who accused it of making shoddy products.

John Suffolk, the company's global cybersecurity chief, told Reuters at a cybersecurity conference in New Delhi that he was sending a team of engineers to talk to German security researcher Felix Lindner, who has exposed vulnerabilities in the company's routers, from its $100 home Internet devices to multi-million dollar equipment run by telecommunications companies.

China Telecom reported declining profits for the first nine months of the year as higher costs associated with its launch of the iPhone ate into revenues.

The smallest of China’s three network operators, China Telecom (Beijing, China) boasted a 15.1% increase in operating revenues for the first nine months, to 210 billion yuan ($33.6 billion), compared with the corresponding period of 2011, with take-up of smartphone services fuelling top-line growth.