Subject: [NEXTEL-1] 3G Royalty War Getting Hotter

From: Marcel <[email-masked]>
Date: Wed, 06 Nov 2002 15:15:54 -0500

http://www.wirelessweek.com/index.asp?layout=print_page&doc_id=106959

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3G Royalty War Getting Hotter

By Wireless Week Staff
November 6, 2002
news@2 direct

As the 3G wireless world coalesces around two major
competing technology standards, backers of the wideband CDMA variant are
escalating their effort to win new allies in nations where the choice of
technologies remains largely up for grabs.

A group comprising several of the largest GSM equipment makers - Nokia,
Ericsson and Siemens - and one of the world's biggest, most advanced and most
influential GSM-based service providers - Japan's NTT DoCoMo - today called for
technology developers to limit the royalty rates they charge for licensing their
W-CDMA technologies, generally targeting a cumulative rate of less than 5
percent.

The companies, in a statement issued from GSM Central - otherwise known as
Helsinki - pointedly stated they own the majority of intellectual property
rights to W-CDMA and said they also would license the 'significant number' of
patents they own for cdma2000, the basis for the competing 3G platform, under
the same terms.

'This initiative means that cumulative royalty rates of W-CDMA are kept at a
healthy level. For example, according to the recent developments in China, the
cumulative royalty rate seems to remain even under our earlier targeted
cumulative 5 percent level. This makes the W-CDMA standard safe to invest in for
operators, manufacturers and application developers,' says Nokia executive vice
president Yrjo Neuvo. 'We can see the IPR initiative gaining support amongst the
industry, and encourage others to join.'

The move is a shot across the bow of Qualcomm, which was not a part of this
deal and has said in the past it owns most of the essential patents for cdma2000
and W-CDMA technologies.

The GSM community agreement comes on the heels of a couple of Qualcomm
announcements this week that pushed into the GSM arena. Qualcomm said Sanyo will
be using its MSM6200 chipset in upcoming W-CDMA and GSM/GPRS handsets. Qualcomm
also has started shipping a new MSM6300 chip that offers both CDMA and GSM
access.

Qualcomm did not immediately return a call seeking comment on the
agreement.

By making it clear they intend to keep their licensing fees at what the group
calls 'a modest single digit level,' the Nokia-Ericsson-Siemens-DoCoMo group is
trying to convince service providers that have not yet made their 3G technology
decision that W-CDMA equipment - from base stations to handsets - will be an
economically superior choice to cdma2000 based systems such as 1XRTT or 1X
EV-DO.

The initial group also says W-CDMA patent holders Fujitsu, Matsushita
Communication Industrial (Panasonic), Mitsubishi Electric, NEC and Sony
Corporation are willing to cooperate with the royalty agreement.

'It is of the utmost importance for the mobile communication industry and in
the interest of both licensors and licensees that the cumulative royalty cost of
W-CDMA is maintained at a competitive level which encourages both greater growth
and innovation in the industry,' says Lothar Pauly, board member of the Siemens
Information and Communication Mobile Group. 'As we -- the major IPR holders --
make our patents available we ensure that W-CDMA stays an open and globally
acceptable technology.'

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