Nokia calls off CDMA venture with Sanyo

MUMBAI: At a time when Qualcomm’s royalties regime is under scrutiny by the industry and the Indian government, Nokia has decided to call off its partnership with Sanyo (announced on February 14) to form a new CDMA device company.

In a release issued on Thursday, Nokia cited the “financially prohibitive CDMA ecosystem” and the fact that the “CDMA emerging markets business case looks more challenging” as reasons for calling off the Sanyo CDMA partnership.

Nokia has announced that it will selectively participate in key CDMA markets, with special focus on North America. Nokia said that it plans to ramp down its own CDMA R&D and manufacturing by April ’07. Nokia sources denied that the company was pulling out of CDMA markets.

Nokia’s decision could have an impact on its R&D centre in India, said sources. Nokia had set up an R&D centre near Reliance Communications’ (then called Reliance Infocomm) sprawling campus at Navi Mumbai in ’04. “Nokia is evaluating opportunities to leverage its existing CDMA R&D infrastructure and assets in profitable parts of its business,” said the release.

Nokia’s decision comes close on the heels of the spat with Qualcomm over the issue of patents linked to the CDMA technology. Qualcomm has taken legal action against Nokia three times in the past nine months.

Nokia said it decided not to pursue its plan of forming a CDMA device company as the terms & conditions of the proposed partnership were not satisfactory and in the best interests of Nokia’s long term success.

“In addition to an already financially prohibitive CDMA ecosystem in general, recent developments indicate that the CDMA emerging markets business case is looking more challenging,” it said.