Is the 4G era coming soon?
On November 28, the Ministry of Industry and Information Technology convened telecommunications operators to discuss the issue of 4G licensing, making preparations for December. Telecom operators have also repeatedly stated that they are preparing for the issuance of licenses in early December. China Mobile has already started 4G advertising in the subway and plans to release the 4G service brand "He" on December 18. This means that 4G licenses will be issued before December 18, and will allow China Mobile time to prepare.
However, an industry source said that whether it is 3G or 4G, its basic core patents are in the hands of American Qualcomm (hereinafter referred to as Qualcomm), and some Chinese companies have a few core patents. Beijing Xinwei Communication has 6 core patents, Datang Telecom has 8 core patents, and Qualcomm has the most core patents. The National Development and Reform Commission has always prohibited Chinese core patent owners from charging royalties, so TD-SCDMA has an immature industrial chain. Although China Mobile has not yet given up this technology, but progress is slow.
China Mobile was the only TD-SCDMA operator in the world. Over the past four years, China Mobile has invested up to 194.5 billion yuan in TD-SCDMA. These investments are far from being recovered.
As a 3G network technology with independent intellectual property rights in China, the TD-SCDMA network has invested a lot of money in research and development. However, due to the late operation, it currently only covers and applies the network in China. Now China's submission of TD-LTE standards has been approved by the International Telecommunication Union as one of the 4G standards. TD-LTE is a subsequent evolution technology based on TD-SCDMA.
This industry source said that the National Development and Reform Commission requires that in the 3G era, domestic R & D companies must not charge royalties, resulting in no one willing to upgrade the TD-SCDMA technology. Therefore, entering the 4G era, if domestic R & D companies are still not allowed to earn patent fees, then the 4G era may still repeat the same mistakes as China Mobile's 3G era.
The industry insider said that Huawei ’s annual patent fees for Qualcomm Group can be described in astronomical numbers. If we say that in the 3G era, Qualcomm also has competitors such as MediaTek, Nvidia, Spreadtrum, etc. In the 4G era, Qualcomm has become the main chip manufacturer in the field of LTE technology. Taking China Mobile as an example, more than 90% of 4G mobile phones next year may need to pay Qualcomm royalties. 4G mobile phones need to be compatible with multiple formats such as FDD-LTE, TDD-LTE, and CDMA. Currently, only Qualcomm can produce such chips.
Looking back to 2003, Qualcomm's technology did not monopolize the world. At that time, Qualcomm claimed that "Qualcomm owns the intellectual property rights of TD-SCDMA core technology". At that time, Datang Telecom, which had been conducting commercial development of TD-SCDMA systems, responded that Datang owned intellectual property rights of TD-SCDMA core technology. Then both parties recognized that they are the masters of TD-SCDMA. At that time, Qualcomm had negotiated to come up with all 3G patents and Datang Telecom's TD-SCDMA for cross-licensing, in order to charge patent fees to global communications equipment vendors, but Datang Telecom refused. Since then, the research and development of Qualcomm Group has been going all the way, far away from Chinese companies.
According to public information, as of September 2013, Qualcomm's total revenue was 24.9 billion US dollars, 49% from the Chinese market, and some of the revenue came from equipment assembled in China and sold in other countries.
Not only does China Mobile 4G make Qualcomm profitable, but China Telecom and China Unicom 4G terminals cannot bypass Qualcomm's chips. Earlier this year, Tsinghua Unisplendence acquired Spreadtrum Communications for $ 1.78 billion. However, in terms of LTE, in addition to Qualcomm, Broadcom, Marvell, Intel, MediaTek, Lianxin Technology, Chuangyi Video, HiSilicon and more than 10 chip manufacturers have successively launched 4G baseband chip products, but the market share is still too small.
However, in a recent public statement, Qualcomm said that the National Development and Reform Commission has launched a related investigation of the company in accordance with the Chinese antitrust law. Although the official did not disclose the reasons why Qualcomm suffered an antitrust investigation, in the opinion of some industry insiders, the incident is inseparable from 4G patent negotiations.
Prior to this, Qualcomm has encountered antitrust investigations in South Korea, Japan, and the United States. In July 2009, Qualcomm was imposed a fine of 260 billion won (approximately US $ 208 million) in South Korea for unfavorable market competition (mainly involving CDMA chips, etc.).
However, the above-mentioned industry insiders are pessimistic about this anti-monopoly investigation. He told reporters that Qualcomm ’s patented technology in the communications field is absolutely exclusive. It is difficult for investigators of the National Development and Reform Commission to gain the upper hand in adopting patent game rules. The monopoly investigation may be settled by reconciliation, and reducing patent fees is a possible solution for both parties.
The above-mentioned industry insiders assert that no one can get rid of Qualcomm in the 3G era, and no one can get rid of Qualcomm in the 4G era.
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