Ericsson tries to avoid patent war by publishing rates for 5G

ERICSSON has taken the unusual step of publicly setting a price tag on what it will cost to licence the telecommunications company’s technology for the next generation of high-speed mobile phone networks. Ericsson said it will cap royalties at $5 per phone for higher-end handsets, though it would go as low as $2.50 for less expensive devices. The company is being upfront about costs now so that more companies will want to develop products that incorporate the industry standard, said Gustav Brismark, Ericsson’s chief intellectual property officer. “We believe by setting a price that’s reasonable, it would serve as a reference to other patent holders and to other companies that need to take a license,” Brismark said in an interview. Equipment makers like Ericsson, service providers including AT&T Inc., and handset makers such as LG Electronics Inc. are working together to develop the standards for 5G, which is scheduled to be commercially available by 2020 though could come sooner. Ericsson Chief Executive Officer Borje Ekholm in February predicted the market for fifth-generation mobile broadband services could reach $1.2 trillion and the company is seeking to capture as much of that as possible. Since the companies developing a standard have a leg up on ensuring their technology is included, they pledge to license any relevant patents on “fair, reasonable and non-discriminatory” terms, a phrase that’s never been clearly defined.