For Ericsson, ‘Massive’ IoT means massive opportunity
In an exclusive interview, Ericsson’s Thomas Choi explains how the company balances joint and bilateral approaches to meet the unique challenges of cellular IoT licensing
By Jacob Schindler
‘Massive IoT’ is the name Ericsson has given its solution for delivering LTE-M and NB-IoT access technologies to mobile carriers. The moniker neatly captures the sprawling nature of the cellular IoT ecosystem, where hundreds of companies in diverse verticals are producing millions of low-power devices designed to blanket a wide area. This creates unique challenges for patent licensing, but also significant opportunity.
Ericsson was a founding participant in the Sisvel Cellular IoT pool, the flagship joint licensing programme for LTE-M and NB-IoT patents. It is also, of course, a significant bilateral licensor in the space.
To hear more about Ericsson’s strategy in this area, Sisvel Insights spoke to San Francisco-based Thomas Choi, a senior licensing director at the Swedish company. In addition to managing complex outbound and inbound SEP licensing matters, Choi oversees Ericsson’s participation in patent pool platforms. These responsibilities span domains including cellular devices and infrastructure, automotive, consumer electronics, IoT, cloud and multimedia services.
In the conversation below, Choi explains why IoT calls for novel licensing strategies, how Ericsson balances joint and bilateral licensing, what the company looks for in a pool administrator and how the commercial market for cellular IoT is shaping up.
Thomas Choi, Senior Director, Licensing, Ericsson
Ericsson provides a lot of the backbone on which cellular IoT networks around the world operate. From that perspective, can you share your overall outlook for what Ericsson calls ‘Massive IoT’?
Service providers that support cellular IoT networks can expect demand for this service to grow significantly over the next five years. According to the most recent Ericsson Mobility Report, the total number of cellular IoT connections reached 3.4 billion at the end of 2023 and is forecast to approach 6.7 billion by 2029. Massive IoT is an example of a cellular IoT network where service providers can use Ericsson radio units to connect to millions of low-cost battery-powered devices (e.g., sensors, trackers, meters) using cellular standard technologies (e.g., NB-IoT and CAT-M).
What sets cellular IoT apart in terms of your approach to licensing?
In the smartphone market, there is a higher concentration of companies producing the majority of smartphones globally and each of these companies have sophisticated IP departments that are experienced in SEP licensing. In contrast, there are hundreds of companies in the cellular IoT market that produce a wide range of cellular enabled IoT devices that enter the market each year. Many of these cellular IoT companies come from industries that are unfamiliar with SEP licensing, such as agriculture, industrial, logistics, utilities and smart buildings. As such, an approach to licensing the cellular IoT market requires educating our counterparts on SEP licensing as well as listening and understanding how companies in each cellular IoT vertical are using the cellular IoT technology. This is important in order to establish a licensing system that ultimately promotes adoption of cellular IoT across these diverse use cases.
Have you identified any particular challenges when licensing the cellular IoT market, and how have you tackled them?
Cellular IoT is a fragmented market where millions of devices are created by hundreds of companies across multiple product verticals. One way to tackle this fragmentation is to focus on a small number of cellular IoT verticals (e.g. smart meter, sensor, tracker) so that the licensing is performed in a coordinated fashion with a goal of entering into timely license agreements with all companies in each of these verticals.
In general, how does Ericsson assess whether to become involved in pools and other joint licensing initiatives? What do you expect from a pool administrator and from a particular program?
Each market requires a fresh perspective on how it can be addressed, whether it’s through bilateral licensing efforts or a patent pool or joint licensing partnership. In a new market where there are hundreds of new implementer companies, it may make sense to consider joining a pool that has experience and a track record of success licensing that market. There are many pool operators to choose from, but they are not equal and it’s important to consider factors such as the administrator’s experience in creating successful pools, its administrator fee, along with the capability and experience of the pool licensing team. It is also important that the pool can offer a licence that covers a majority of SEPs in a licensed standard. In this way, implementers can obtain a significant licence right through one agreement, providing economic efficiency for both patent owners and implementers. As a major licensor, we expect the pool administrator to regularly communicate status updates and issues with us, make substantive progress licensing entire verticals each quarter and generate meaningful licensing revenue.
We are proud to have Ericsson as a founding member of the Sisvel Cellular IoT pool. In your view, what makes this programme a good solution for this market and a good fit within Ericsson’s overall strategy?
We think this programme is a good solution for both the cellular IoT market and Ericsson because it helps in the development of open standards that our R&D investments helped create. We also believe that this pool can help IoT device implementers position their products to succeed in the market and maintain profitability. This pool also addresses the concerns that we heard from the industry about predictability, multiple licensing negotiations, cost, and equal access for all.
Can you tell us about Ericsson’s bilateral licensing efforts in cellular IoT and how these complement your pool participation?
Licensing in the cellular IoT market calls for new approaches and flexibility. With each vertical comprising hundreds of implementer companies, each of which has a different decision-making process, it’s important to create an efficient licensing model where companies can take a licence through the Sisvel pool but also have the option of taking a bilateral licence to the Ericsson portfolio. Overall, we find that the combination of patent pool with bilateral licensing is a good option for fragmented markets such as cellular IoT.
What’s ahead for your team – are there particular verticals or other areas of focus?
Both the IoT and multimedia verticals are growing rapidly. Market analysts are estimating that there will be 800 million cellular connected IoT devices shipped in 2030 alone and are also estimating that the multimedia market is nearing the size of the smartphone market. In addition to Ericsson’s industry-leading cellular SEP portfolio, Ericsson also has a significant patent portfolio directed to multimedia technology. As such, these two verticals will be among the key areas of focus for our licensing team going forward.
Jacob Schindler is Sisvel's Senior Content & Strategic Communications Manager
