Wireless companies to keep licence fees low on new technology
Last Updated: Tuesday, April 15, 2008 | 1:08 PM ET
CBC News
A group of mobile phone industry giants has agreed to keep patent royalties on the next-generation of wireless technology down, paving the way for the introduction of advanced wireless networks and devices.
The companies — Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson — on Monday agreed to an "industry principle of fair, reasonable and non-discriminatory licensing terms for essential patents."
Their agreement applies to Long-Term Evolution (LTE) technology, which is seen as the successor to the Global System for Mobile communications (GSM) standard that is used by more than 80 per cent of the cellphone carriers in the world.
The companies' pact means they will keep licensing costs on LTE, whether the technology is installed in laptop computers or in cellphones, at less than 10 per cent.
The clarification of the licensing fees will help cellphone companies and computer makers move beyond current third-generation wireless networks and adopt LTE technology faster, the companies said.
"The patent licensing market requires basic rules in order to properly develop and function," Ilkka Rahnasto, Nokia's vice-president of intellectual property rights, said in a statement. "Today's announcement is a step towards establishing more predictable and transparent licensing costs in a manner that enables faster adoption of new technologies."
LTE offers wireless broadband speeds around 100 megabits per second and can handle large amounts of traffic, both of which are huge improvements over current third-generation networks, the companies said.
In Canada, only Rogers Communications currently runs a network based on GSM technology. However, a number of new cellphone companies are expected to arise after an auction of wireless airwaves, which begins in late May. The new players are expected to build networks based either on GSM or LTE technology.
GSM's rival technology, Code Division Multiple Access, is used in Canada by Bell and Telus. Those two companies have also been under pressure to convert to GSM or consider adopting LTE because they typically lose out on roaming revenue from international customers. Many cellphone customers from Europe and Asia who visit Canada end up connecting to Rogers' GSM network because their phones are incompatible with the technology of Bell and Telus.
In the United States, current CDMA carrier Verizon Wireless — the country's second-largest cellphone provider next to AT&T — has announced it plans to implement LTE in some markets by the end of 2010. Some of the world's largest cellphone companies, including Britain's Vodafone and China Mobile, have also announced plans to go with LTE.
Conspicuous by its absence from the group agreeing on LTE royalties was Qualcomm, which has dominated patent issues in the deployment of older wireless networks. Nokia and Qualcomm have been locked in bitter patent litigation in recent years.
