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Analyst: Nortel's LTE patent value may be overblown

Lynnette Luna — Wed, 01 Jul 2009 19:39:26 -0400

Industry analysts have conflicting views over whether Nortel's LTE patents it retained instead of selling them to Nokia Siemens Networks (NSN) along with the LTE and CDMA businesses are worth a whole lot.

The bankrupt vendor, which is in the midst of offloading its various businesses and subsequently sold its LTE and CDMA assets to NSN for $650 million, held on to what is believed to be key LTE IPR assets, which could potentially bring in some hefty royalties. JP MorganChase analyst Ehud Gelblum has pegged the royalty figure as high as $2.9 billion in a recent research note.

Stuart Carlaw, vice president and chief research officer with ABI Research, believes the figure is overblown since the $2.9 billion figure is based on the assumption that Nortel's intellectual property could get a royalty rate of 1 percent of every LTE device sold.

"This is disproportionate to their patent holdings and cannot be seen as fair and reasonable. I doubt any other single vendor will be looking for this type of return - even Qualcomm," said Carlaw.

Carlaw expects that Qualcomm will bundle LTE with other technologies in a licensing package, meaning its LTE portion will be much less than its cumulative royalty rate.

For more:
- check out telecoms.com
- see Light Reading

Related articles:
Nortel keeping key LTE patents
Time ticking on NSN-Nortel LTE integration
Nokia Siemens expresses confidence in wake of Nortel deal

Piper Jaffray initiates coverage of Alvarion, spells out cautious market for WiMAX

Lynnette Luna — Wed, 01 Jul 2009 19:19:01 -0400

Piper Jaffray commenced coverage of Alvarion with an underweight rating and a $3 price target, which is well below the $4.49 closing price on Wednesday.

"While we believe Alvarion is well positioned as a WiMAX provider, we remain cautious on the ramp in Alvarion's WiMAX sales due to macro factors" and valuation concerns, T. Michael Walkley wrote in a research note. Alvarion has indeed been racking up the WiMAX contracts, including a $100 million contract with Open Range Communications earlier this month.

Walkley believes operators are likely to conserve capital in the second half of the year, and therefore the firm is remaining cautious about Alvarion's overall WiMAX sales in 2009.

The analyst also noted that existing technologies, primarily CDMA 1xEV-DO and WCDMA, are being expanded aggressively in emerging markets such as China.

"We believe these incumbent technologies have economies of scale and a diverse product portfolio for handsets which are essential for carriers to attract customers and recoup capital expenditure spent on the network upgrades," Walkley wrote. "We believe WiMAX will remain only in niche markets and we remain cautious on ramping WiMAX sales in 2009."

For more:
- see Barron's

Related articles:
Alvarion lassos $100M WiMAX deal with Open Range
Alvarion scores WiMAX contract for rural America

UK planning one big 4G spectrum auction in 2010

Lynnette Luna — Wed, 01 Jul 2009 14:47:23 -0400

At one point the UK was supposed to be the first European country to auction 2.6 GHz licenses for 4G service, but the plan is once again on hold, according to 4G Trends. Telecoms regulator Ofcom, after delaying the process before, had indicated back in November it was planning to award licenses by mid-2009 and in April said it would try to get the licenses auctioned as soon as possible. Now the regulatory plans to bundle the 2.6 GHz and digital dividend spectrum, which is similar to the 700 MHz band in the U.S., in one big auction next year. Article

Comcast launches WiMAX offering in Portland

Lynnette Luna — Tue, 30 Jun 2009 09:16:18 -0400

One of Clearwire's cable partners, Comcast, launched its first WiMAX offering in Portland, Ore., where Clearwire rolled out service earlier this year.

Comcast, serving as an MVNO on Clearwire's network, introduced Comcast High-Speed 2go, advertising speeds of up to 4 Mbps. Pricing is aggressive: $50 a month on an introductory basis that includes home Internet service at 12 Mbps and a free WiFi router. After the first year, the price increases to $73 per month. For an extra $20, customers can add nationwide 3G data service from Sprint Nextel to the package.

Could we see a mobile broadband price war emerge in Portland? Verizon Wireless, for instance, currently offers EV-DO service for $60 with a 5GB cap. Clearwire recently became more aggressive with its pricing in Portland, adding new pricing plans that include an unlimited home plan and a mobile package for $55 a month.

Cathy Avgiris, Comcast's general manager for wireless and voice services, said the company will eventually expand its role as a reseller of Clearwire's network and sell the service in other cities. Comcast will include other wireless devices, like cell phones, as part of its offering. She declined to comment on when this expansion would happen. PC World reported that the cable operator plans to launch in Chicago, Atlanta and Philadelphia by year end. Clearwire recently launched service in Atlanta, but has yet to light up Chicago or Philadelphia.

Avgiris indicated the service is meant to complement Comcast's wired broadband offering and pointed out some of the shortcomings of wireless. "There are issues with indoor penetration, and with coverage you sacrifice speed," she told the Wall Street Journal.

So far this year Clearwire has launched mobile WiMAX in Portland and Atlanta and has soft-launched its service in Las Vegas. Sprint Nextel's WiMAX market in Baltimore is being expanded and will be converted to a Clear market later this year. Other markets that will launch this year include Chicago, Dallas/Ft. Worth and Philadelphia. The company also will convert existing pre-WiMAX markets in Seattle, Honolulu and Charlotte, N.C., to mobile WiMAX.

For more:
- see PC World
- check out the WSJ (sub. req.)

Related articles:
Clearwire getting more aggressive in Portland
Comcast to resell Clearwire WiMAX service in Portland
Clearwire will launch at least eight markets in 2009

Nortel keeping key LTE patents

Lynnette Luna — Mon, 29 Jun 2009 00:20:39 -0400

Light Reading is reporting Nokia Siemens Networks didn't buy all of the Nortel's Long Term Evolution (LTE) assets. Apparently Nortel is holding on to some LTE patents. Nortel holds some key patents relating to OFDMA and MIMO, both key elements of the LTE standard.

NSN last week announced it is buying Nortel's CDMA and LTE businesses for $650 million. The price tag most likely would have been significantly higher if those patents were included.

Light Reading said documents filed with the U.S. Bankruptcy Court for the District of Delaware indicate that the preliminary agreement between Nortel and NSN includes the license of "certain intellectual property necessary for the manufacture of the products and the provision of services."

The question is: What is Nortel, which is selling its parts off, going to do with those patents?

For more:
- take a look at Light Reading

Related articles:
Ericsson licenses LTE technology, claims strongest patent portfolio
Following IPR agreement, Nortel publishes LTE rates