China Investigating Ericsson Over Licensing Model

China’s antitrust regulators have reportedly raided Ericsson’s offices amid an investigation into the vendor’s patent licensing practices. The move comes as geo-political tensions continue to haunt the telecom vendor space.

Ericsson confirmed it was being investigated by the Chinese State Administration for Market Regulation (SAMR) concerning its licensing models.

“Ericsson can confirm that the Chinese SAMR has formally initiated an investigation due to complaints against Ericsson’s IPR licensing practices in China,” the company noted in an email to SDxCentral. “Ericsson is fully cooperating with the investigation and will refrain from further comments while it is ongoing.”

The Wall Street Journal reported that the investigation included a raid on Ericsson’s offices in Beijing.

The investigation appears to have come from complaints made earlier this year by Chinese mobile phone makers regarding Ericsson’s licensing practices.

Ericsson explained in its email to SDxCentral that it adheres to the generally accepted “fair, reasonable, and non-discriminatory” (FRAND) licensing models.

“At Ericsson, we license our industry leading patent portfolio on FRAND terms and conditions and have always been committed to these FRAND principles,” the vendor wrote.

Gustav Brismark, chief intellectual property officer at Ericsson, earlier this year said the vendor has signed more than 100 patent license agreements. President and CEO Börje Ekholm added that the company has more than 49,000 patents.

Geo-Political Tension

The investigation comes as some Western governments continue to pressure telecom operators to not use 5G network equipment from Chinese vendors. The U.S. government is fueling much of that pressure as it continues to express security concerns over the use of Huawei and ZTE equipment in telecom networks.

That situation is likely to remain tense as Huawei last month filed a lawsuit against the U.S. government looking to overturn a ban on its equipment.

A recent report from Dell’Oro Group touted Huawei as the world’s leading global equipment services provider to telecom operators last year. The report found that Huawei controlled more than 30% of the $43 billion global services market, and held a commanding lead in global sales over rivals Ericsson, Nokia, and Cisco.

Ericsson, along with its Nordic rival Nokia, are the vendors most likely to benefit from any sort of ban on telecom operators using equipment from Huawei or ZTE.

A similar proxy fight was waged last year by chip giants Broadcom, Qualcomm, and NXP. That battle saw Broadcom’s attempt to acquire Qualcomm nixed by U.S. regulators and Qualcomm’s attempt to purchase NXP shot down by Chinese regulators.―SDX Central