Huawei reveals royalty rates for 5G tech

Huawei Technologies Co disclosed on Tuesday the royalty rates for the use of its 5G technologies in smartphones, as the Chinese tech giant aims to increase transparency about its intellectual property.

The move came as Huawei has become one of the world's largest patent holders through sustained investment in innovation. By the end of 2020, Huawei held over 100,000 active patents worldwide.

Jason Ding, head of Huawei's intellectual property rights department, said for every multimode 5G smartphone that uses Huawei's 5G technologies, the company will get up to $2.5 in royalties.

Huawei estimated it will receive about $1.2 billion to $1.3 billion in revenue from patent licensing between 2019 and 2021.

Huawei's total revenue in 2019 reached 858.8 billion yuan ($132.2 billion).

According to Ding, Huawei has been the largest technical contributor to 5G standards and follows fair, reasonable and nondiscriminatory principles in patent licensing.

He added that the company hopes the royalty rate it announced on Tuesday will increase 5G adoption by giving 5G implementers a more transparent cost structure that will inform their investment decisions.

Francis Gurry, former director general of the World Intellectual Property Organization, said, "In releasing its license fee structure for 5G standard essential patents, Huawei is promoting the widespread adoption and use of standards designed to ensure interoperability, reliability and transparent competition, while at the same time providing a fair return for investment in R&D."

From 2010 to 2019, Huawei spent about $90 billion on R&D, according to a white paper on innovation and intellectual property the company issued on Tuesday.

Song Liuping, chief legal officer of Huawei, said: "We want to show the history of our innovation over the past 30 years and our long-term commitment to respecting, protecting and contributing to IP. With this white paper, we want you to better understand how Huawei has become what it is today."

The move also came as Huawei faces a string of restrictions from the US government, affecting its smartphone businesses.

Song said Huawei holds over 10,000 patents in the US, which bring value to many US companies. As a major contributor of patents essential to 5G standards, the company is willing to share these technologies with the world.