Qualcomm Going to Market on 5G With SEP-Only Licensing Offer, Says CEO

As the market transitions to 5G, “the engineering challenges embedded in the 5G opportunity play directly to Qualcomm's strengths and the focused investment we have made over the last several years,” said CEO Steve Mollenkopf on a Wednesday earnings call. “We are leading the industry to 5G and we are pleased to see the strength of our roadmap helping to enable the upcoming commercial launches of 5G networks and devices, including the 18 network operators and 20 manufacturers that have selected our X50 5G modem for trials and 5G devices.” Qualcomm will go to market on 5G with a standards-essential-patents-only licensing offering at an “effective” royalty rate of 3.25 percent for “multimode” devices compliant with the Release-15 suite of 5G specifications that 3GPP finalized in December, said Mollenkopf. Modeled after the SEP-only licensing program Qualcomm “successfully” launched in China three years ago, using the same approach for licensing 5G “facilitates the effort to conclude agreements and extensions in 2018 and early 2019, providing for a seamless transition for the launch of 5G devices in 2019,” he said. The company will continue offering its “portfolio-wide” licensing package at the higher 5 percent royalty rate, said Qualcomm Technology Licensing President Alex Rogers in Q&A. “We expect on a go-forward basis that there will be a number of licensees who are interested in extensions and renewals who may want to have SEP-only license agreements,” said Rogers. “We expect there will be a number of licensees who want to maintain portfolio-wide agreements worldwide, but there will also be licensees who want to have SEP-only agreements on a worldwide basis. And that is, of course, something that we can accommodate on a case-by-case basis.”