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Qualcomm to Lower Patent Charges in China
SHENZHEN, Dec 16, 2008 (SinoCast Daily Business Beat via COMTEX) --
Qualcomm, the owner of CDMA patents, is set to lower down patent charges on Chinese mobile phone makers. Such move is believed to boost up the profit margins of them.
However, Qualcomm China confirms that companies that have signed patent charge contracts with Qualcomm for this year are not entitled to enjoy the new rate.
At the moment, Chinese mobile phones have to pay 2.5% of patent fees to Qualcomm for CDMA mobile phones sold domestically, and 7.5% for those sold overseas.
The rate reduction is a result of negotiations between Qualcomm and Chinese mobile phone markers, which is lead by China Telecom, the CMDA mobile telecom service provider in China.
Qualcomm had long hoped that its CDMA technology would be adopted as the mobile phone standard for all of China, but the competing standard GSM, which is the dominant mobile phone technology around the world, has so far taken hold in this country. CDMA does dominate in North and South America and in South Korea.
About 90% of mobile phones currently in use in China are based on GSM technology, with less than 1% using CDMA and older analog mobile phones making up the difference. But with only 51.6 million mobile phone users among China's billion-plus population, the potential for growth in China is enormous.
Some experts say that GSM providers will eventually migrate to W-CDMA, while those using current CDMA technology will opt for CDMA 2000. And while Qualcomm's preference is for CDMA 2000, it will make money on W-CDMA as well. In July it won a legal victory claiming it deserved royalty payments on some of the core patents in the W-CDMA technology.
After China Telecom took over CDMA networks and about 40 million CDMA mobile subscribers for CNY 43.8 billion from China Unicom, it could do nothing to keep these subscribers from turning over.
One month after China Telecom officially kicked off CDMA mobile telecom service, its CDMA mobile phone users decreased to 28.4 million by the end of this October, in contrast to 29.08 million in late September, according to the latest performance report released by the telecom carrier.
It is worth noting that the number of CDMA mobile phone users was 41.73 million by the end of September, which had been confirmed by China Telecom and China Unicom when they delivered the CDMA networks.
Spokesperson for China Telecom says that the difference was caused by different statistical methods used by the two parties.
But the updated number of CDMA mobile phone users will not have an impact on income and profits of China Telecom, says the spokesperson.
Source: www.hexun.com (December 16, 2008)
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