Patents give Huawei key role in 5G networks

Plans to remove Chinese telecoms company Huawei's material from the communications infrastructures of Western countries over the coming years may be more complicated than first thought, after research by German market data platform IPlytics revealed that the Shenzhen-based company owns more 5G technology patents than anyone else, with many of them regarded as essential.

Earlier this month, having previously allowed Huawei a restricted role in the building of the United Kingdom's 5G network, the British government banned the company, a decision taken after a period of encouragement by the United States government, which has long cited security fears, without producing any evidence to back them up.

John Sawers, former head of British intelligence service MI6, justified the change of heart, telling the Financial Times: "There are now sound technical reasons for the UK to change January's decision. ... The security assessment is now different because the facts have changed."

However, China's ambassador to the UK Liu Xiaoming said excluding Huawei from the UK's 5G networks is a wrong decision. Addressing a webinar on July 22 with the Chinese business community in the UK, he said the issue of Huawei is not just about how the UK sees and deals with a Chinese company, it is about how the UK sees and deals with China.

France has stopped short of an outright ban but has introduced new rules that effectively squeeze Huawei out of the market.

A repeat of this elsewhere would have a significant impact on that arm of Huawei's business, which accounted for almost one-third of the company's total revenue last year.

However, although there are European manufacturers, Nokia and Ericsson, that could fill the gap, Huawei's dominance of the sector would mean that these replacement systems would still be largely dependent on its technology.

Currently, despite being the owner of the intellectual property, Huawei does not receive financial benefit from it, preferring a cross licensing system, exchanging access to its systems with rival companies.

But it is within the company's rights to end that approach in markets from which it has been excluded, meaning systems wanting to benefit from Huawei-owned designs and plans could have to pay for them. As other tech companies have already found out, this can be a lucrative and powerful position.