ns - Feb 2006 - Chinese 3G Equipment Providers in Talks on IP Issues
2006-1-20
China should first solve the intellectual property problems of 3G with Qualcomm, including its national 3G standard TD-SCDMA.
Most of the 3G-related patents are in the hands of over 30 foreign companies, except Huawei and Datang Telecom have 5 percent of WCDMA-related basic patents and 7.3 percent of TD- SCDMA-related basic patents respectively.
The high patent fee will be one of the major problems hindering the development of the wireless market. The mobile equipment industry will pay patent fee of USD 80 billion to USD 100 billion to the patent owners like Qualcomm, Nokia, Motorola, and Ericsson.
For now, ZTE has considerable basic patents in WCDMA, CDMA2000, and TD-SCDMA. Many Chinese key testing indexes are superior to those of foreign companies. Chinese carriers have converted from followers to leaders.
As owning a great deal of 3G patents, ZTE could get a preferential price in the 3G patent negotiation with foreign companies.
As Huawei has had a large amount of CDMA2000 and WCDMA equipment and terminals and reached agreements with Qualcomm on patent authorization, it will pay one percent of the domestically-sold products to Qualcomm as patent fee and six to seven percent of the exported products as patent fee, according to an official with Huawei.
Patent shows a company‘s R&D ability in telecom technologies, but it is not so fatal to the company‘s market performance as the technology maturity and brand, according to a market analyst.
Chinese companies should have advantages in the key TD- SCDMA patents. There is no latest statistics on the basic TD- SCDMA patent owners. There was some statistics showing that Nokia owns 32 percent of the patent rights, Ericsson 23 percent, Siemens 11 percent, Datang Telecom 7.3 percent, and Qualcomm 2 percent.
Now Huawei is at a leading position in WCDMA and CDMA2000 fields. Huawei has made an investment of over CNY 6 billion in 3G and R&D staff of near 6,000.
The telecom equipment provider has had 18 WCDMA commercial contracts and over 10 CDMA2000 commercial contracts around the world. Its 3G solutions have been applied into Holland, the United Arab Emirates, Hong Kong, Malaysia, and Thailand.
There are 22 companies among the global top 50 telecom operators becoming Huawei‘s customers. The experience in the application of commercial networks makes Huawei capable to be the partner of any mobile carriers in the world.
ZTE has become one of the major suppliers of CDMA2000 globally. Its equipment are adopted by over 90 carriers in over 60 countries. The WCDMA solutions are applied into more than ten countries including Tunis, Libya, Tajikistan, and Nepal.
The technologies of Chinese companies are not outdated, and they even have advantages in some aspects, according to the testing of domestic carriers.
However, there is still a big gap. According to Ericsson‘s statistics, Ericsson has had over 40 percent market shares in the global WCDMA market by last January. The company has 56 WCDMA contracts among the total 106 ones in the world.
Some foreign companies may take 3G market shares by lowering the prices in a short period, but Chinese companies will have more advantages in cost of research, development, market, sales, and maintenance from a long-term perspective, pointed a ZTE official.
Take Huawei for example, most of its staff are marketing and R&D personnel and few are production personnel. If Huawei obtains some 3G orders, many Chinese foundries will lower its production cost in a large scale, revealed an industry expert close to Huawei.
Source: sinocast
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