Ericsson runs into 5G licensing trouble in China

Business & Technology

The Wall Street Journal reports (paywall) that last Friday, April 12, “some 20 investigators from China’s State Administration for Market Regulation raided Ericsson’s Beijing office.” The Swedish telecommunications company relies on China for about 7 percent of its revenue, and is currently jockeying with Nokia and China’s own industry leader, Huawei, to roll out 5G telecom networks worldwide. The Journal explains what else we know:

While Ericsson wouldn’t address the source or the substance of the complaints against it, a Chinese state media report suggested that they involve licensing patents for smartphones.

Once 5G-compatible devices are rolled out, handset makers are likely to face an increase in royalty fees they must pay to Ericsson, said the People’s Posts and Telecommunications News in an online report. The report said Ericsson will likely impose 5G patent fees on top of fees for older generation technologies such as 3G and 4G…

The probe may be a part of a negotiating tactic of Chinese handset makers, said Phil Marshall, chief research officer of Tolaga Research, a mobile-industry research firm based in New Zealand.

Currently, handset makers are preparing smartphones that would have 3G, 4G and 5G technologies in them, Mr. Marshall said. The timing of this probe could be “related to them trying to make sure to reduce the cost of using Ericsson IPR,” he said, referring to intellectual property rights.

More information can be found at FierceTelecom: China investigates Ericsson over patent licensing complaints.