Swedish telecom giant Ericsson, a major rival of Huawei Technologies in the sale 5G equipment, confirmed that the Chinese market regulator is investigating the company over intellectual property licensing issues, as the global race for the build out of 5G networks hots up. “Ericsson can confirm that the State Administration for Market Regulation Anti-trust division came to the Ericsson Beijing office on April 11, 2019, telling us that they were initiating an investigation into Ericsson’s patent licensing business,” Ericsson said in an emailed statement. The Swedish company said it would cooperate fully with the investigation and refrain from making any further comment while it is ongoing, adding that it has been licensing its patent portfolio on FRAND (Fair, Reasonable and Non-Discriminatory) terms and conditions, principles which it is committed to. The antitrust probe of Ericsson, which derives about 7 per cent of its revenue from China, comes at a time when the world is gearing up for the roll out of ultra-fast 5G networks, a lucrative business for telecom equipment suppliers such as network equipment leader Huawei, Finland’s Nokia and Sweden’s Ericsson. It is also set against an ongoing battle by the US to restrain Huawei’s participation in global 5G network infrastructure builds on its assertion that the Chinese company’s equipment poses a security risk. In a previous probe back to 2015, San Diego-based US chip maker Qualcomm reached a resolution with China’s National Development and Reform Commission in an antitrust investigation, agreeing to pay a penalty of 6.1 billion yuan (US$895 million) and revised several of its business practices in China. Ericsson and Qualcomm are the world’s leading holders of patents behind mobile phone technologies. An email sent to Nokia’s China media relations team to ask whether the Finnish firm is facing a similar probe by Chinese authorities did not receive an immediate reply. Huawei has 29 per cent share of the telecoms equipment market, increasing its market share by 8 percentage points since 2013, according to research firm Dell’Oro Group. Nokia, Ericsson, Cisco, ZTE, Ciena, and Samsung, together with Huawei, cumulatively account for about 80 per cent of worldwide service provider equipment market revenue. Shenzhen-based Huawei said this week it has secured 40 contracts for 5G commercial networks around the world as of the end of March, up from 30 contracts that the company announced in January. A company presentation detailed that over half of these contracts come from Europe. Huawei said has not signed any 5G contracts in China as the authorities have yet to release 5G spectrum and local operators can only trial the next-generation network. Ericsson’s publicly announced 5G contracts have increased to 18, the company said in a recent update on April 1. Nokia has secured 30 commercial 5G deals, according to its website.
