Ericsson CEO: Qualcomm should play fair

Ericsson president and CEO Carl-Henric Svanberg, making a rare appearance in New York City this week, said in an interview with Telephony that Qualcomm “must get in line” with the agreement it made to international regulators not to abuse its leadership position in the CDMA chip market by squeezing its competition for excessive UMTS royalties.

“If Qualcomm sees lower CDMA growth overall, it naturally wants to get into WCDMA [also called UMTS], but it is bound by the agreement it made not to be unfair with its royalties,” Svanberg said.

Ericsson was one of a consortium of vendors that had filed a complaint with the European Commission last week alleging that Qualcomm refused to license CDMA technology patents to other chipset vendors under fair terms, and that it charged lower royalties to companies that agreed to buy chipsets exclusively from Qualcomm. The complaint said that these alleged acts were in violation of an agreement Qualcomm made to the international standards community when WCDMA was adopted as the 3G standard. Qualcomm denied those allegations during its earning late last week.

Svanberg emphasized that Ericsson’s existing licensing agreements with Qualcomm were not at issue, but that it’s an issue “between Qualcomm and the rest of the world.” He echoed the allegation that Qualcomm is charging companies fees for WCDMA rights proportionally similar to what it charges for CDMA2000 licenses, even though it patents aren’t used to an equal extent in the 3G standard.

“They are charging an amount for royalties that is irrespective of the patents that they have,” he said. “That cost than gets passed on to the market and to the customer. If you end up with prices getting very high, that is the type of thing that could kill a market. The only resolution really is for [Qualcomm] to get in line with where they should be, reflecting the investment that they have made.”