Nokia says it expects to make €3 from every 5G smartphone sold

24 Aug 2018

Nokia logo. Image: JPstock/Shutterstock

Nokia has decided on a flat rate for the licensing of its vital 5G patents.

5G is getting closer to implementation all the time and the companies behind the essential technology have been organising to avoid future disagreements over licensing.

The international 5G standard was finalised in June and companies such as Nokia, Qualcomm and Ericsson were crucial to its development. These firms own standard essential patents, which are integral to deploying the new network technology.

5G licensing begins

These companies now get the right to license their contributions to device manufacturers under a set of terms dubbed FRAND (fair, reasonable and non-discriminatory). These terms ensure that the technology is accessible to as many manufacturers as possible.

Nokia has announced a €3 ($3.48) flat-rate licensing fee for each device, according to VentureBeat. Ericsson’s fee slides from $2.50 to $5 per device, depending on the price of the phone itself. Qualcomm plans to license its patents at 2.275pc of a single-mode device’s price, or 3.25pc of a multi-mode 5G handset price, capped at $400. Combined, the total royalties payable to the patent-holding companies comes to approximately $21 per device.

It’s worth bearing in mind that this is set to increase as Samsung and Huawei also need to announce their fees. Usually, larger device makers negotiate much lower-volume discounts, which are often far less than disclosed rates from patent owners.

Nokia committed to open standardisation

“Nokia innovation combined with our commitment to open standardisation has helped build the networks of today and lay the foundations for 5G/NR,” said Ilkka Rahnasto, head of patent business at Nokia.

“This announcement is an important step in helping companies plan for the introduction of 5G/NR-capable mobile phones, with the first commercial launches expected in 2019.”

The capped rates only apply to mobile devices. Licensing rates for PCs, routers and industrial gear will be determined separately. The first 5G smartphones will be on sale in 2019.

Nokia logo. Image: JPstock/Shutterstock

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects