Thanks, Sam Ginn>
Vendors Settle CDMA Dispute
By Caron Carlson
WASHINGTON--The redundant gridlock over third-generation wireless standards budged last week when Ericsson Inc. agreed to buy Qualcomm Inc.'s terrestrial
infrastructure business, and Qualcomm agreed to accept multiple technologies in a 3G standard.
Headed toward a trial in June after more than a year of arguing over intellectual property rights to code division multiple access technologies and their inclusion in 3G,
the companies last week settled out of court. The vendors will cross-license their CDMA patents and will license them to the rest of the industry on terms set by the
International Telecommunication Union. Qualcomm will receive rights to sub-license other Ericsson patents, including those Ericsson says it holds in Qualcomm's
application-specific integrated circuits technology.
Heralded with great fanfare as a resolution toward "a single world CDMA standard," the agreement, in fact, endorses an umbrella model encompassing separate and,
in some ways, incompatible CDMA technologies. This approach was long endorsed by Ericsson and other European participants at the ITU as well as North
American global system for mobile communications operators.
"Under the umbrella standard, it will be possible for operators to select whatever mode [of CDMA technology] they want," said Sven-Christer Nilsson, Ericsson
president and CEO, at a news conference March 25.
Qualcomm, nonetheless, is still holding out for further harmonization between the cdma2000 and wideband CDMA modes of the 3G umbrella standard, but is
relinquishing the campaign to its customers. "Operators have been looking to see whether there are advantages to having further convergences," said Irwin Jacobs,
chairman and CEO of the San Diego-based manufacturer. "Operators will make the decisions how to proceed."
Some CDMA operators highlight the manufacturers' agreement to support a multi-mode standard in which each mode can operate on both GSM MAP and
ANSI-41 networks as an encouraging sign of impending harmonization.
Qualcomm, which lobbied the U.S. government extensively during the past year to fight for access to European markets for U.S.-built wireless technology, will sell its
CDMA infrastructure business to the Swedish manufacturer for an undisclosed sum. Ericsson--which will absorb some customer commitments, a portion of vendor
financing obligations and related assets and personnel--plans to integrate the business into its own operations quickly.
Ericsson intends to move aggressively into the cdmaOne market, making handsets available in early 2000. Both manufacturers plan to build multi-mode 3G phones
that can access networks using different technologies. This option was advanced last summer by other major manufacturers, but Qualcomm previously opposed it,
citing increased costs. Jacobs said last week that most of the cost of building multi-mode phones is in accommodating different frequencies, not different networks,
however.
Without the infrastructure operations, Qualcomm will focus on its core businesses, including handsets and chip sets, the Globalstar satellite system, and wireless data,
Jacobs said, adding that there is flexibility in how the company moves forward.
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