Will Operators Subsidise Consumer Electronic Devices to Help Foster LTE Subscriptions?

Thomas Noren, Head of Product Line LTE at Ericsson’s Networks business, predicted that the cellular industry will one day manage 50 billion connections across the globe, with each person owning a variety of connected devices.

Although, HSPA has already enabled laptops and video cameras to have wireless connectivity, this will continue with LTE. Operators will be looking to connect numerous devices and machines to other machines or to human beings in a different way to what we’ve seen so far.

Migrating existing customers over to LTE as soon a the network is switched on will be difficult and this will have to be a gradual process. Mobile phones, computer and consumer electronic devices including notebooks, netbooks, ultra-mobile PCs, gaming devices, cameras, and PMPs will incorporate embedded LTE connectivity. LTE and multi-mode ICs and devices are scheduled to become available in 2009. The ecosystem is clearly coming together in time for the first networks due to go live in 2010.

With mobile handset sales in decline, mobile operators are using already their subsidies to push sales of other consumer electronics devices such as netbooks and e-book readers to help foster mobile broadband subscriptions. But will this trend continue with LTE devices. Operators have already indicated that they are not keen on subsidising devices in the future and are hoping that consumer electronics manufacturers will take on some of this cost, although this is not likely as the IPR costs for consumer electronics comapnies is already very high.

Thomas Noren will be participating on the executive keynote panel at the LTE Asia conference in Hong Kong on the 8th and 9th of September.

Can Nortel Survive as a Patent Business?

According to Rethink Wireless, Nortel may still have a game plan to survive Chapter XI and preserve its brand and a couple of business activities.

Most of Nortel's valuable wireless patent portfolio was excluded from the sale of LTE and CDMA businesses to Ericsson, This could arguably become the basis of a much smaller, but profitable, business focused mainly on licensing. This is only dependant on whether Nortel can raise sufficient funds from the sale of its other businesses to pay off creditors to the satisfaction of the US and Canadian bankruptcy courts. Avaya is currently looking at buying Nortel's enterprise unit. Nortel apparently plans to keep back patents from the enterprise unit sale too.

The fact that most of the IPR was excluded from the Ericsson deal would also explain the interest of RIM. RIM could see the patents as giving it a headstart over larger rivals in creating LTE BlackBerry devices and services going forward, and may also welcome the boost to its licensing arsenal, both for future revenues and also as a defensive tactic. The company has always engaged in significant patent licensing (and litigation) activity in its core mobile email markets and could aim to increase its value and its ability to 'trade' IPR with rivals.

Confusing reports have been coming from Nortel attorneys over which patents Ericsson was acquiring - one said 125 of the total portfolio of 5,500, another said 600. Ericsson will also license other Nortel IPR. Based on Nortel's estimate that the patents could command a 1% royalty on every relevant LTE device sale in the years to come. JPMorgan recently made the calculation that the patents could be worth between $950m and $2.9bn.