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Jul. 22, 2007

Verizon Wireless has found a way to bypass the International Trade Commission's (ITC) ban on handsets that use Qualcomm chips by signing on with Broadcom.

To fully ensure that its supply of the latest handsets will keep coming, Verizon Wireless has agreed to pay Broadcomm as much as $200 million.

Overall, this will allow the carrier to sell handsets that contain a patent found to have been infringed on by Qualcomm.

Under the terms, Verizon Wireless will pay Broadcom $6 per handset, up to $200 million.

This deal comes as a blow to Qualcomm, who rejected a similar deal offered by Broadcom last month.

The two chipmakers have been battling over these technology rights for two years now. In June, the ITC banned the import of any handset using Qualcomm chips with the disputed technology.

As part of the deal, Verizon also agreed to halt its efforts to overturn the ITC's ban.

Shares of Broadcom rose $1.63, to $33.99,while Qualcomm's shares dropped $1.75, to $43.35.

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Source: Wireless Week