ZTE launches new salvo against Huawei

09:01, June 08, 2011      

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Chinese telecommunications equipment maker ZTE Corp has demanded rival Huawei Technologies Co stops making and using equipment related to fourth-generation time division long term evolution (TD-LTE) technology, expanding the legal battle between the two Chinese telecom giants.

In a lawsuit filed at the Shenzhen Intermediate People's Court, ZTE alleged that Huawei infringed on three TD-LTE patents. The company also demanded Huawei stops participating in large-scale TD-LTE trials in seven Chinese cities that started in January.

The move came after Huawei filed four lawsuits against ZTE in Germany, France and Hungary at the end of April, accusing it of patent and trademark infringements.

Representatives of ZTE's communication department said on Tuesday that the Shenzhen court has accepted the case and the company is awaiting the next phase of the lawsuit.

Shi Xiaoyan, a Huawei press officer, said Huawei has received a bill of indictment from the Shenzhen court. She said Huawei welcomes ZTE's counteraction.

"We believe the court will give us a fair trial. Huawei is a leading company in LTE technology, and we own 15 percent of the basic patents in LTE technology worldwide," Shi told China Daily.

TD-LTE technology is a Chinese telecommunication standard. China Mobile Ltd, the world's biggest phone carrier by users, is leading its development and striving to make it a global standard.

In December, China Mobile got approval from the Ministry of Industry and Information Technology to begin large-scale tests of TD-LTE technology in seven cities. Huawei is working with Telefon AB LM Ericsson to provide TD-LTE equipment in Shenzhen, while ZTE is supplying the equipment for the trial network in Guangzhou. Alcatel-Lucent SA is providing equipment for Shanghai and Nokia Siemens Networks for Hangzhou.

"The lawsuit is unlikely to hamper China's TD-LTE trials," said Yang Hua, secretary-general of the TD Industry Association in China. He pointed out that the lawsuit could be lengthy and Huawei will not suspend the trial network construction unless the Shenzhen court issues an injunction.

Yang also said he expects that all of the lawsuits are merely "paving the way for a comprehensive settlement", because ZTE and Huawei both own a large portion of LTE patents and cannot afford to work without each other.

Ji Chendong, an analyst with the research firm Frost & Sullivan, said the competition between Huawei and ZTE has become increasingly intense, especially in the overseas market. "The market share in Asian and African countries is relatively stable, and Europe and the US are the two telecom giants' major battlefields," Ji said. That explained why Huawei launched the first salvo in its war on ZTE in the European market.

ZTE's revenue rose by 50 percent year-on-year in the European and US markets in 2010, the biggest overseas contributors to ZTE's annual growth. The company expects its revenue to grow by more than 20 percent this year, beating Huawei's forecast of less than 8 percent.

Source: China Daily
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