Is it possible to streamline LTE IPR costs?


Is it possible to streamline LTE IPR costs?  

Earlier this week seven key infrastructure vendors announced that they had agreed to a framework for establishing predictable intellectual property rights licensing costs related to next-generation wireless technology LTE.

The companies participating in the deal are Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson and they all say that they have agreed that the maximum aggregate royalty level for LTE IPR in handsets will be a single-digit percentage of the sales price. In addition, they have agreed that when LTE modems are integrated into notebook computers, the IPR costs will have a royalty rate under $10.

I understand the impetus behind this. Similar to mobile WiMAX, LTE proponents envision the technology being integrated into all types of consumer electronics devices-digital cameras, portable gaming devices, refrigerators, etc.--and to make that vision a reality the LTE IPR costs have to be minimal or widespread deployment won't occur. Plus, any prolonged battles over IPR will likely result in delays to LTE deployment, giving mobile WiMAX a stronger position.

But can this group of seven vendors call the shots and streamline IPR costs with an agreement? What about all the other key players (namely Qualcomm) that aren't included in this list? 

IPR is a complex area and I suspect that this agreement isn't going to mean much in the long-term. Qualcomm, Nortel, InterDigital and others aren't likely to sit back and let these companies dictate the licensing terms. While these seven companies score some "good faith" points with this agreement, I think it will take much more than this to drive the IPR costs down to the single-digital percentage level. -Sue


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