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Ericsson Says Willing To Lower Royalty Rate For 5G Smartphone To USD 2.50 Per Device

Swedish telecom gear maker Ericsson is willing to halve its royalty rate for 5G smartphones to USD 2.50 per device from USD 5 to accommodate the needs of markets such as India where affordable devices are required for mass uptake.

“We look at a USD 5 for a 5G handset but we also said that we are willing to lower our prices to USD 2.50, depending on the circumstances. We need to accommodate the fact that handsets come at very different price points,” Monica Magnusson, Vice President of IPR Policy, told.

In comparison, Finland’s Nokia is likely to charge USD 3.50 royalty per 5G handset, while US-based chipmaker Qualcomm has said it will charge up to USD 16.25 in royalties.

Magnusson’s comments have a major bearing for a market like India where pricing of smartphones is key to wider adoption of the next-gen technology.

This year, as many as 30 smartphones are expected to be launched globally running on Qualcomm 5G chipsets. And the feedback we get from the licensees impacts our pricing,” she said. In India, Ericsson has been involved in legal battles with various handset players including Xiaomi , Micromax and Intex over the gear vendor’s standard-essential patents, some of which have been resolved. Ericsson claims to have over 45 thousand patents.

The executive said that India is participating in developing technology standards like China and has balanced IPR policies, providing more opportunities to companies as the industry moves towards 5G and Internet of Things (IoT).

“There are a lot of opportunities with IoT, an opportunity for new use cases and technologies evolving,” she said.

Magnusson disagreed with the views of some that India would gain by opting for local 5G standards, saying, in fact, India could lose out in terms of global competitiveness as the country would lose the economies of scale, thereby increasing the prices of networks and devices.

“I don’t think we necessarily need national standards to meet Indian challenges as global standards are accommodating enough,” she said.

The executive said that Ericsson has been engaging in the standardization of 5G with a number of industry stakeholders, across multiple markets, including India.

“As we see different use cases emerging, we will introduce more nuances in patent licensing but the basic fundamentals will remain that when you license these patents, you need to charge a royalty that is reflecting the value,” she said.―Trade Briefs

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