If you can’t beat them, join them
Data modem and dongle manufacturer Option has struck a licensing deal with one of its chief tormenters – Huawei – and agreed to drop anti-dumping and anti-subsidy complaints as a result.
The company has agreed to license its connection manager software to Huawei, with the first year of the license valued at €27 million. The agreement also includes the potential for an extension of the license for an amount of up to EUR 33 million over the next 18 months.
Option will also sell its wholly owned semiconductor company M4S for approximately €8 million. M4S is developing a next generation Radio Frequency chipset to be used in 4G devices.
The companies have also agreed, in principle, to work on joint Research & Development projects to stimulate innovation in the telecoms industry. Both companies are also exploring the establishment of a joint R&D centre in Belgium, as well as ways of contributing resources to develop new wireless broadband solutions and software.
As a result of the deal, Option has withdrawn its anti-dumping and anti-subsidy complaints against imports of wireless wide area networking modems from China, asked the Belgian government to withdraw its safeguard request, and asked the European Commission to close all three investigations.
Option, during the first quarter of 2010, generated revenue of €13.1 million, showing a marked decline from €50.8 million in Q1 2009 and €76.8million in the first quarter of 2008. The company has blamed competitive pressure from Chinese competitors as being amongst the reasons for sales decline.
Option’s CEO Jan Callewaert said the deal was “is in the best interest of all stakeholders”.
“The collaboration aims to improve our respective products and solutions and will offer long term benefits to our customers. The software license agreement is a big step forward in one of our key pillars of our strategy,” Callewaert, said.