NDRC launches antitrust probe into Qualcomm

China's top economic planning agency has launched an antitrust investigation into US mobile chip maker Qualcomm Incorporated, with analysts saying Tuesday that the Chinese government may want to break the company's dominant position in the 4G wireless technology market.

The NASDAQ-listed company said in a statement released Monday that China's National Development and Reform Commission (NDRC) has started an investigation regarding the Chinese Anti-Monopoly Law, and the agency advised that the substance of the probe remains confidential.

Qualcomm owns many 4G technology patents and is a major supplier of chips in China. Paul Jacobs, chairman and CEO of the company, said in the firm's latest earnings report that he expects Qualcomm to continue reporting satisfactory results, thanks to the strong growth potential of 4G wireless technology in China.

China Mobile, one of Qualcomm's clients and the world's largest mobile operator by subscribers, will start commercial 4G communication services on December 18, Xinhua News Agency reported Monday.

Beijing, Chongqing and Guangzhou will be the first cities to use commercial 4G, Xinhua said.

Qualcomm said in the statement that it is not aware of any charges by the NDRC about violating the country's Anti-Monopoly Law, and the chip maker will cooperate with the agency.

The NDRC could not be reached for comment as of late Tuesday. But NDRC official said over the weekend that the agency will focus antitrust investigations on six industries, including telecommunication, newspaper The Beijing News reported Monday.

The company reported annual revenue of $24.87 billion in the 12 months through September, up 30 percent from last year, with 49 percent of sales having come from China, according to the chip maker's annual financial statement, released November 6.

Wang Yanhui, head of Shanghai-based Mobile China Alliances, told the Global Times Tuesday that the investigation may be a result of Qualcomm's dominant position in the 4G chip production market.

"Most 4G smartphones, which will be launched in the first half of next year, will be powered by Qualcomm chips. That rings an alarm for the NDRC," Wang said.

"Qualcomm will be signing patent license agreements with Chinese makers soon and it has set a license fee of 4 to 5 percent, which the NDRC might think is unreasonably high," he said.

Liu Dalong, director of the mobile Internet research center at Beijing-based iResearch, told the Global Times Tuesday that the probe will not have a major influence on the 4G chip market in China.