Watch n brief
Unsure what it all means, but am suspicious what it could mean ... as com prepares to be huawei-ed
http://www.rethink-wireless.com/2013/11/26/china-asserts-wireless-independence.htm
China asserts wireless independence at lastChina has grown to be the biggest smartphone market in the world thanks to its recent economic expansion, but it is only with the dawn of LTE that it will really gain the technological self-sufficiency in wireless that it has sought for years. Two events highlighted that this week - reports that China Mobile would switch on commercial TD-LTE services before the end of the year, and an antitrust lawsuit filed against Qualcomm.
The former sees China launching modern services, which will leapfrog those of many other large countries, using technology which has been largely developed at home, and in which local vendors hold significant market share.
China Mobile will launch commercial 4G services on December 18, under the brand name He ('harmonious' in Chinese), and reportedly with a TD-LTE iPhone to whet consumers' appetites. Initially it will rely on the extensive 'trial' networks Mobile has been running in anticipation of getting a commercial licence, but there will also be rapid new build-out in 2014. To hit the target date, the Chinese regulator, MIIT, will have to allocate those commercial franchises within three weeks. Last week, it awarded TD-LTE spectrum to all three operators, but Mobile is well ahead of its rivals in its deployments, having been using overlays in its 3G bands. Its first He offerings will be available in Beijing, Guangzhou and Chongqing, according to Chinese news agency Xinhua.
Of course, the country has tried the homegrown platform route before, with the TD-SCDMA 3G platform and others before it, but has always ended up in a technology island, limited in its ability to access global ecosystems or interoperate with partners. With TD-LTE though, it has tapped into carriers' need for new data capacity in almost any type of spectrum, and established a 4G system that will, over time, be almost as important globally as its FDD cousin.
Chinese players hold the rudder in terms of platform development, roaming mechanisms and device ecosystem, but also in terms of IPR. Major players like Huawei and ZTE are amassing massive piles of wireless patents, aiming to have the global influence and licensing bargaining power that Ericsson, Nokia and Qualcomm had in 2G and 3G.
It is not clear how aggressively the Chinese companies will assert their patents, but they will be keeping a close eye on the increasingly active IPR enforcement programs of western rivals like Alcatel-Lucent and Ericsson itself. And they will certainly be helping their home country towards a long-held ambition, to loosen the dependence on western patents as China builds its own mobile standards and industries.
With an echo of South Korea's moves towards mobile self-reliance in the previous decade, China is becoming more willing to probe the business methods of companies which hold the upper hand in key technologies. Thus the action against Qualcomm epitomizes the new thinking. China's National Development and Reform Commission (NRDC) has started an investigation related to an anti-monopoly law, the US chip provider confirmed, though details are confidential and Qualcomm says it is unaware of any actual charges, but will cooperate with the probe.
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Any disruption in China is potentially serious, given that Qualcomm derived almost half (49%) of its $24.9bn sales in fiscal 2013 from the country, including chips for handsets which were assembled there for export. It has been pushing to expand its reach in the country, and fend off the rising tide of local rivals there, such as Spreadtrum. In particular, it has been launching low end SoCs for mass market handsets. Its stepped-up activities, as well as a series of probes, notably in the European Union, of Chinese firms' practices, may have prompted this new action.
Gus Richard, an analyst at Piper Jaffray, told Bloomberg: "China wants to give as much advantage to their indigenous chipmakers as they can. They care a lot about communications infrastructure and cellphones. I don't think China's going to pay them."
Another relevant factor is that China Mobile currently pays limited patent fees to Qualcomm because TD-SCDMA has been ruled not to be covered by the US firm's patents. Qualcomm says that will change with TD-LTE, in which it holds considerable IPR, and so it could expect to start claiming licensing payments from the world's largest cellco, as well as supplying chips for its handsets. This was held by up CEO Paul Jacobs as a significant positive for 2014 at the company's recent analyst meeting.
The investigation of Qualcomm may also relate to the new Chinese administration's crackdown on business practices which inflate prices for consumers, at a time when the country's consumer boom is subsiding somewhat. Most of the headlines have centered on anti-corruption measures, but the policy also covers other mechanisms such as licensing.
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