L.M. Ericsson head Sven-Christer Nilsson told the Japanese press late last week his company will continue negotiations with Qualcomm Inc. and said it is ready to reach some form of compromise over intellectual property rights to third-generation technology.
Ericsson spokeswoman Kathy Egan said the company “is looking for a situation to work for all the different standards … Ericsson is willing to pay royalties if they are reasonable.”
Nilsson’s statement comes as Qualcomm is lobbying Capitol Hill to take a stand and pose a trade issue against Europe’s standards-setting process, which Qualcomm and other vendors claim is closed to cdmaOne technology. Ericsson has been accused of strong-arming the standards process in Europe.
Qualcomm and Ericsson are battling it out for access to the multibillion-dollar market in the next century that promises Internet-friendly wireless phones with sophisticated high-speed data and multimedia features.
Qualcomm claims to hold key patents to Code Division Multiple Access technology. Every major vendor except Ericsson has licensed the technology for Interim Standard 95 systems currently used in the United States and abroad. Ericsson has pushed for GSM-based wideband-CDMA technology for 3G services. The standard was subsequently adopted by European and Japanese standards bodies for 3G technology. The International Telecommunication Union is evaluating the 16 3G proposals submitted by organizations and standards bodies around the world. Most of the proposals incorporate some form of W-CDMA technology.
Qualcomm has made it clear it will not grant its CDMA IPRs for the W-CDMA standard unless it is converged with cdma2000, the 3G standard based on IS-95 technology, to allow for backward compatibility to current systems.
Ericsson previously has claimed its customers don’t want backward compatibility since they will be purchasing new spectrum and won’t need to migrate from current-generation systems. Convergence would degrade the standard in terms of capacity, said Ericsson.
A compromise may be difficult for both companies, which have a history of bad blood and lawsuits over CDMA technology. Most industry observers were under the impression the two have yet to negotiate the issue.
One key element separating the two CDMA technologies is the chip rate. Qualcomm is not willing to compromise on the chip rate. W-CDMA proponents want a higher chip rate, but Qualcomm says the rate would make the technology incompatible with existing cdmaOne systems.
Sources have indicated that Ericsson believes Qualcomm’s royalty fees for CDMA technology are unreasonable, and would license the technology at a lower cost than what Qualcomm is willing to agree to.
The European Telecommunications Standards Institute has said it acknowledges that Qualcomm holds CDMA IPRs, but has not commented on whether it is open to convergence of the two CDMA standards. Qualcomm’s Chairman and Chief Executive Officer Dr. Irwin Jacobs said it’s not enough for Europe to accept both CDMA standards. They must be converged.
“The operators over there would be forced to use one version over the other version,” he said. “We continue to be for different technologies, but convergence would avoid these kinds of problems.”
The ITU has added the requirement that all companies by Dec. 31 must submit a written statement that any known IPR is either free or available on reasonable terms. Otherwise, they will be thrown out. The ITU must come up with standards that are free of any IPR hurdles.
An agreement between Qualcomm and Ericsson could bridge the gap in Japan, where government bodies have been trying to merge the two CDMA proposals.
“We are seeking … the sole international standard because it is more beneficial for customers,” said Masayoshi Wakao, managing director of the Association of Radio Industries and Businesses, Japan’s standards body. “If parties in the standardization process agree to a certain system based on superiority in the technology, it’s fine. We don’t care which is chosen.”
However, Europe and the United States are insisting on their ideas and do not offer any compromise, explained Yasuo Tawara, deputy director of the Ministry of Posts and Telecommunications’ Land Mobile Communications Division. ARIB has been negotiating with the ETSI and the United States’ Telecommunications Industry Association and the T1P1 committee through both official and unofficial channels.
GSM carriers in the United States are adamant on moving forward with the W-CDMA standard.
Yaeko Mitsumori contributed to this article.
