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Mobile-Phone Suppliers Court China, Developing Countries
By DAVID PRINGLE
Staff Reporter of THE WALL STREET JOURNAL
A group of the world's leading mobile-equipment suppliers have agreed to limit the licensing fees they levy on third-generation wireless technology in a bid to persuade China and other developing countries to adopt the 3G standard being deployed in Europe.
The deal between European equipment makers Nokia Corp., Telefon AB L.M. Ericsson and Siemens AG, together with Japanese mobile-phone operator NTT DoCoMo Inc., is designed to help make the European 3G technology more cost-effective than a rival standard supported by San Diego-based Qualcomm Inc. and other North American equipment companies. The technology allows video clips, Internet pages and other multimedia content to be sent over wireless phones.
Nokia, Ericsson, Siemens and DoCoMo said the agreement should mean that anyone manufacturing wireless phones and network infrastructure compatible with Europe's 3G technology will pay less than 10% of the sale price of the product in royalties to patent holders. Some experts had estimated that figure would be as high as 25%.
It is critically important to Nokia and Ericsson, in particular, that the European version of 3G, known as WCDMA, or wideband code division multiple access, is widely deployed. Both companies have invested heavily in the technology, and they lag behind rivals in the markets for equipment compatible with alternative standards, such as the CDMA 2000 technology favored by many North American equipment makers.
"Ericsson and Nokia can afford to throw away some licensing revenues," said Mark Paxman, a wireless specialist with the PA Consulting Group in the U.K. "But they need [WCDMA] to succeed at almost any cost."
Nokia and Ericsson together claim to hold more than 50% of the WCDMA patents but Mr. Paxman still expects the royalty costs on WCDMA equipment to total about 15% as other patent holders may not agree to curb their rates.
Qualcomm and InterDigital Communications Corp., of King of Prussia, Pa., which rely heavily on licensing revenue and also claim patents related to WCDMA, are unlikely to support Nokia's push to drive down royalty rates. People familiar with the situation say Qualcomm alone aims to collect royalties of between 3% and 5% on WCDMA equipment.
Yrjo Neuvo, chief technology officer for Nokia's mobile-phones division, said that continuing negotiations between Chinese equipment makers and patent holders led him to believe that the royalty total can be held below 5%. Nokia hopes that such low rates will help persuade Beijing to license domestic operators to roll out WCDMA services.
"Where countries have not selected a 3G standard yet, it's a competitive advantage to offer reasonable [royalty] levels," Mr. Neuvo said.
A spokesman for InterDigital said, "The jury is still out on what is an appropriate level of compensation."
Louis Lupin, general counsel for Qualcomm, said the deal by the equipment suppliers shouldn't affect his company's licensing program. He added that Qualcomm already has licensed its WCDMA patents to many companies at a royalty rate "in the low single digits." He declined to be any more specific.
NTT DoCoMo, which is the only operator to launch a commercial WCDMA service, said its equipment suppliers, such as NEC Corp. and Matsushita Communication Industrial Co. of Japan, have agreed to support the drive to curb licensing fees. Under their agreement, Nokia, Ericsson, DoCoMo and Siemens will charge royalty rates in proportion to the number of patents they hold.
Experts say that more than 100 companies have filed WCDMA patents as they try to improve their negotiating position in licensing discussions.
日期: 2002/11/7
出處: The Wall Street Journal
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