Huawei signs 4G patent license agreement with Volkswagen
Chinese telecom Huawei agreed earlier this week to sign a 4G patent license agreement with the German car manufacturer Volkswagen.
The decision – which joins two U.S. sanctioned companies — is considered one of the biggest patent licensing agreement Huawei provides within the auto making industry.
As per the deal, the telecom titan’s 4G mobile technology is expected to be deployed in more than 30 million Volkswagen vehicles with wireless connectivity, according to a joint statement.
However, two things remain undisclosed as of yet; the first being the financial terms of the deal, while the other is whether the deal falls under a tier 1 license covering telematics control units, or if it covers components higher up in the supply chain.
In both cases, the announcement suggests that the licensee can’t sell those components to other car makers under this particular license agreement, which appears to be exclusive to Volkswagen Group’s 12 brands: Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania, and MAN.
Volkswagen declined to provide any additional details concerning the supplier but confirmed the transaction. “This licensing in the supply chain is a model of how the increasingly close cooperation between the mobility industry and the information and communications industry can succeed,” a Volkswagen spokesman said this week in an emailed statement to the South China Morning Post.
“As an innovative company, we own a leading patent portfolio for wireless technologies, which creates great value for the automotive industry,” Song Liuping, legal officer at Huawei, said in a separate statement.
While mobile network operators around the world are pursuing 5G development and rollout, Huawei’s deal with the Volkswagen supplier indicates that carmakers remain keen to support 4G, which connects most mobile consumers around the world.
Over the past 20 years, Huawei has entered into more than 100 patent license agreements with major global companies across Europe, the United States, Japan, and South Korea.
The Chinese giant move is marked as a win followed by constant U.S. sanctions and restrictions since 2019. Huawei has admitted last March that sanctions imposed on it by the U.S. in 2019 have had a major impact on its mobile phone business.
Not long ago, the former Trump Administration included Huawei in the department of commerce’s entity list due to security concerns, accusing the Chinese government that is uses Huawei’s devices for spying purposes.
Similarly, the German automotive was slapped, in 2017, with largest fine for automakers. The company had to pay $2.8 billion due to it diesel emissions scandal.