Wireless chip vendor Qualcomm may pay $1 billion fine to settle the 14-month investigation in China and lower its royalty rates by around a third on patents used in the country.
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Reuters today reported that the record fine of nearly $1 billion to China will be ending the 14-month government investigation into anti-competitive practices. The report said the U.S. chipmaker and the regulator made significant progress during talks last week.
Qualcomm’s fine would be the largest paid by any company in China. China is a key telecom market for Qualcomm. The chip major earned about half its global revenue of $26.5 billion in China during its latest fiscal. A major chunk of profit is from higher-margin royalties earned from the company’s licensing arm.
“National Development and Reform Commission (NDRC) will release a new antitrust settlement,” Xu Kunlin, head of the agency’s antitrust division, said at a law conference on Monday. “Qualcomm will be fined several times the total amount the NDRC fined last year.”
San Diego-based Qualcomm earlier admitted that the ongoing probe has disrupted its business in China. This apart, some Chinese clients are not cooperating with Qualcomm and not reporting the actual number of phones sold. This is affecting Qualcomm’s revenue in China.
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