For its part, ZTE said in its statement that it was "astonished" by Huawei’s action and said: "ZTE respects and adheres to international intellectual property laws and regulations without reservation, and absolutely rejects that there has been any patent and trademark infringement.
It then rapidly countersued, claiming: "ZTE believes the rapid and orderly development of the global telecom industry with innovation is closely related to ZTE’s active involvement and collaboration with many other telecommunication corporations around the world.
Meanwhile, the growth in mobile broadband build-out drove Ericsson to beat analyst estimates and treble its first quarter profit. The Swedish firm reported net income of SKr4.1bn ($675m), compared to SKr1.3bn a year earlier, and way ahead of forecasts of SKr3.06bn.
Revenue climbed about 17% year-on-year to SKr 53bn, also ahead of expectations, with rollout of 3G and 4G networks, to meet rising demand for mobile broadband services, seen as the main contributor. Despite intense competition from Huawei and signs of a rejuvenated challenge from NSN and Alcatel-Lucent, Ericsson is holding on to its market lead, especially in the newer technologies.
“The increase in group sales was driven by the networks segment,” according to CEO Hans Vestberg’s statement. “The strong demand for mobile broadband resulted in five out of 10 regions showing growth year over year.” Ericsson expects global mobile broadband subscriptions to double to one billion this year.
However, there are challenges, particularly to margins. The Swedish giant is announcing a wave of LTE deals, but has been open that most of these – especially outside the U.S. – remain localized build-outs in their first wave and may be heavily financed. A significant boost to revenue will have to wait for 2012 and later, while LTE will never generate the premium margins of the early 3G rollouts, because of budget pressure on carriers, and the consequent need to deliver keenly priced kit from day one. In many cases, cellcos are relying on flexible base stations and commoditized designs to support 4G, squeezing the vendors’ prices and profits.