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Kate Gerwig, Editorial Director
patents that it could use to generate royalties and/or create and develop new 4G applications. Though the company is selling its wireless division to Ericsson and has plans in the works to sell off its enterprise business units, Nortel's LTE patents are its most valuable asset.
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Why is LTE important?
For consumers and vendors seeking broadband speeds via mobile handsets, LTE combined with 4G phones make for genuinely high-speed, dependable and innovative mobile communications.
By manipulating the wireless spectrum more efficiently, long-term evolution technology will surpass current 3G network speeds and will do so at a lower cost.
LTE is a radio-communications-based standard that uses radio waves or radio frequency (RF) energy to place and receive voice and data calls. By leveraging novel radio technology with simplified network components, data rates and performance can be enhanced. Add IP (Internet Protocol) to the mix -- and the wide range of features and services that IP enables -- and businesses and end users have much to gain.
How does LTE work?
LTE's combination of IP with radio technology is unique but simple and can provide download speeds of around 100 megabits per second (Mbps). With 100 Mbps, end users could access unified communications applications, stream video, and even download music and documents onto their wireless devices as quickly as they do now with their desktops over the fastest landline connections.
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Long-term evolution technology promises to be a viable alternative to cable, DSL, satellite and dial-up Internet. LTE will ease the load of road warriors looking to connect to a Wi-Fi hotspot. With an LTE modem, end users can connect anywhere within their service provider's coverage area. Consumer electronic devices -- cameras, notebook computers, video cameras -- that use broadband communications can also tap into the speed of LTE, spreading the value of this technology to a wide and eager audience.
How valuable are Nortel's LTE patents?
Just how valuable Nortel's LTE patents are is difficult to establish. In this regard, JP Morgan analysts considered the true and potential value of Nortel's LTE wireless patents in terms of recurring royalty payments and placed that value at $2.9 billion.
The commitment to LTE research and development and to securing LTE patents could breathe new life into Nortel, shaping a strong research and development company while generating revenues through the licensing of its IPR.