Nokia announced that they have signed a patent license agreement with the world's third-largest smartphone maker Huawei.

"Huawei is one of China's largest companies and is among the world's leading smartphone manufacturers and we are delighted to welcome them to our family of patent licensees," said Nokia chief legal officer Maria Varsellona. Nokia has signed a multi-year patent license agreement with the Chinese phone maker Huawei on Thursday, Dec. 21.

Nokia has struck various licensing deals with smartphone makers including Samsung Electronics, Apple, LG, and Xiaomi over the past few years. Their patent catalog includes technology that reduces hardware components on phones that conserves battery life, and as well as increasing overall radio reception.

"It's a significant deal because Nokia now has agreements with all the big phone makers... The network market will remain tough, but the growing patent revenue will compensate for it," said Mikael Rautanen, an analyst from Inderes Research Firm, to Reuters. Rautanen also claimed that Nokia's agreement with Huawei could give them a revenue of over €100 million annually. This would be smaller than Nokia's deal with Apple which was estimated to be around €250 million.

Huawei and Nokia are actually big rivals when it comes to global telecommunications equipment. Huawei is currently the biggest telecommunications equipment provider in the world by their revenue. Nokia, on the other hand, is relatively new to the telecommunications equipment market as they stopped making phones in 2014 and focused solely on creating and licensing wireless technology. In addition, they also have been a supplier of mobile and fixed-line network equipment.

It seems that Huawei is slowly making its way in to the European market with their patent deal with the Finnish company, Nokia. The said deal may be lucrative to Nokia, but the Chinese smartphone maker will be getting the most of it in the end.