Swedish mobile phone giant Ericsson and U.S. wireless phone maker Qualcomm settled their intellectual property disputes and worked out a technology sharing and cross-licensing deal that could pave the way for a worldwide standard for third-generation wireless equipment.
"With the Ericsson and Qualcomm dispute settled, we could be back on track for a single third-generation standard," said Nicky Scott, a senior consultant at research firm Ovum.
The adoption of a worldwide standard would eliminate the compatibility problems that currently exist between the U.S. and much of the rest of the world -- the curse of globe-trotters who find their phones are rendered useless or are forced them to invest in expensive kit.
Worldwide compatibility is seen as crucial for next-generation equipment, which is expected to be much more efficient in carrying data and providing Internet access.
The inability of the International Telecommunications Union (ITU) to settle on a single standard at a meeting earlier this month contributed to the likelihood that wireless technology for third-generation devices would again be divided along geographical lines.
Ericsson, which is the biggest wireless handset provider in Europe, backs a technology called Wideband Code Division Multiple Access (WCDMA) for its third-generation devices. Qualcomm backs a different flavor of CDMA technology, know as CDMA2000.
Today's announcement, however, brings new hope for a single standard. As part of their agreement, Ericsson and Qualcomm settled intellectual property disputes over their respective technologies and agreed to an extensive cross licensing deal. In addition, Ericsson agreed to purchase Qualcomm's infrastructure business for an undisclosed amount.
Both companies said they would support approval by the ITU and other standards bodies of a single CDMA standard with three modes of operations. The three modes are designed to offer carriers a compatibility link to existing second-generation technology.
But the move toward a single standard for broadband wireless technology, Scott said, could deliver a blow to backers of a third technology, Time Division Multiple Access (TDMA), that is offered by several carriers in the U.S., including AT&T.
However, a spokesman for the Universal Wireless Communications Consortium (UWCC), which is made up of TDMA supporters, said that last week's agreement between Ericsson and Qualcomm was positive for consumers and equipment makers, because it will reduce compatibility issues and speed the development of next-generation equipment.