Patent deal with Ericsson should bring Huawei new revenue

Patent deal with Ericsson should bring Huawei new revenue

Huawei and Ericsson have signed a long-term reciprocal patent deal for mobile network technology. The deal should generate new revenue for Huawei, now that many European countries are banning Chinese technology from mobile networks.

Huawei is suffering greatly from sanctions imposed by many European countries to keep the Chinese tech giant’s mobile network technology out of mobile networks. The EU may also want to ban the use of Huawei’s mobile network technology.

The EU and several European countries, but especially the US, fear that the technology could be used by the Chinese government for spying activities.

Patent deal with Ericsson

The patent deal gives both network vendors access to each other’s patents for mobile network technology for several years. More specifically, the patents for the use of 3G, 4G and 5G in mobile networks and in consumer devices.

Both parties already had such a patent agreement with each other, but the new agreements establish it for a longer term. Further details were not disclosed.

New sources of revenue

The deal should give Huawei a new source of revenue to offset stalled exports of its mobile network technology to Europe. Since 2021, the Chinese tech giant has already been working hard to get more revenue from its patents, especially royalties on the use of 5G technology. Huawei holds about 20 percent of all global 5G patents.

The average royalty for Huawei from a 5G smartphone is $2.5 per device. In 2022, the Chinese tech giant achieved total revenue of 518 million euros ($560 million) from licensing its mobile network technology patents.

Also read: China pumping 30 billion into Huawei, that’s secretly becoming a chip giant