ZTE will bid for Nortel's LTE patents

ZTE confirmed that it will bid in an auction for bankrupt Nortel Networks' LTE patent portfolio, adding another layer to the drama surrounding the one of the last remaining significant chunks of Nortel's once-mighty business.

"Everyone is preparing for it now," Wang Haibo, ZTE's intellectual property director, told Reuters. "There are some patents that we want, although not too many, but we will be looking to bid for some that include LTE," he said. The auction process is still in its early stages and likely will not be concluded before July, ZTE said.

According to a recent Wall Street Journal report, Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Huawei and ZTE are among the potential bidders. Nortel filed for bankruptcy in 2009 and has sold itself off in pieces to pay creditors. Ericsson (NASDAQ:ERIC) purchased many of the pieces, including Nortel's core CDMA and LTE businesses. The patent portfolio includes 4,000 patents, including those related to LTE.

ZTE holds around 7 percent of the world's LTE patents, and Wang said the company wants to increase that to 10 percent. Last year, Ericsson said that it holds 25 percent of all essential LTE patents.

Douglas Gilstrap, Ericsson's head of strategy, told Reuters that the company does need to be invovled in the bidding process but will be following its progress. "We're very strong on patents," he said. "All I can say is that we are watching that closely."

According to the Journal report, which cited unnamed sources familiar with the matter, the "stalking horse" bid for the patent portfolio--the bid that sets a base price for the auction--could be $1 billion. However, the company that wins the stalking horse bid doesn't always wind up winning the auction. Nokia Siemens Networks received the stalking horse bid of $650 million for the CDMA and LTE assets that Ericsson eventually won for $1.13 billion.

For more:
- see this Reuters article

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