Huawei will begin charging handset manufacturers a royalty to use its proprietary 5G patents, as the Chinese technology company seeks to diversify its revenue streams amid the impact of US sanctions on other areas of its market.
According to an official press release, Huawei would charge handset manufacturers a licensing fee of $2.5 per user for rights to its 5G patents. According to Jason Ding, the director of Huawei’s Intellectual Property Rights Department, the firm will make $1.2 billion to $1.3 billion by selling its patents between 2019 and 2021.
Royalties on key patents relating to cellular technologies may facilitate the company make up some of the sales lost as a result of US sanctions in other areas of its market, such as smartphones. Huawei has previously levied royalties on businesses like Apple.
When developing a new wave of cellular technologies, so-called global standards must be established. These are the protocols, technical requirements, and designs that enable global 5G network interoperability and allow smartphones to connect with them.
When it comes to patent licenses, the company has been the most technical contributor to 5G standards and adheres to FRAND principles.
When it comes to the number of 5G patents, HUAWEI is far and away the leader. HUAWEI had 3,000 licensed 5G patents as of March 2021, according to technology consulting and intelligence company GreyB.