Huawei: IPR gains, Indian losses, but what about AT&T?
Published: 7 September, 2009
READ MORE: India | AT&T | Huawei Technologies | LTE
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Huawei is strengthening its hand in LTE trials by boasting of its credentials as a supplier of cutting edge, not just low cost, equipment. With Ericsson, it has shared the bulk of western European LTE test deployments to date, and last week it stepped up the pressure on rivals by declaring itself in pole position for LTE patents. It said European standards body ETSI had confirmed the award of 147 LTE patents to the company, challenging the traditional IPR dominance of Ericsson, Nokia and Qualcomm in 3GPP technologies. This could shift the balance of power in 4G intellectual property, especially as the nascent LTE sector faces huge uncertainties over future royalty payments. Ericsson, Qualcomm, Nortel and others are claiming major patent holdings and analysts have cast serious doubts over whether these are compatible with the stated aim of the European suppliers to reduce royalty payments in handsets to 5% of the price. If Huawei is aggressive about royalty pricing in order to gain market share (last year's major patent deal with NSN gives some hope of this), it could put pressure on its rivals to be flexible, but it could also decide to work outside the emerging LTE patent pools and plow its own furrow on charging.
Huawei says the ETSI patents are in several critical areas such as physical layer air interface, radio resource management and connection management, and represent 12% of the total existing 1,272 LTE patents assigned by ETSI as of August 2009. Yin Weimin, president of LTE at Huawei, said: "Our LTE patents create real value for Huawei's partners and customers." The firm takes part in 91 standards organizations, with over 100 committee leadership positions, and in 2008, it filed a total of 35,773 patent applications globally.
But while Huawei may be pushing its foot into the US door, it faces serious obstacles in one of the world's highest growth wireless equipment markets, India. The Chinese vendor has already come up against political and security concerns over its provisional selection for a major part of state-owned BSNL's massive GSM expansion contract. Now the Indian government is reported to be proposing to expand a partial ban on Chinese supplied cellphones, to include all telecoms equipment from Chinese vendors like Huawei and ZTE. The Department of Telecom (DoT) has proposed the ban in between 14 and 20 of the country's 22 telecoms 'circles' - ones that it considers to be sensitive because they are close to international borders.
The operators are alarmed at the possible restriction of their choices and the DoT will now consult with the Ministry of Home Affairs. An alternative route might be to require all vendors to go through security clearance every two years. Earlier this year, BSNL was said to have dropped Huawei from a shortlist in the regions closest to Pakistan, under pressure from the Intelligence Bureau. Huawei has consistently denied rumors about close links to Chinese government, military and intelligence agencies.
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