HELSINKI (Reuters) –

Nokia (NOK1V.HE), the world’s top

cellphone maker, has ended three years of legal battles with

wireless chip developer Qualcomm (QCOM.O) and signed a patent

agreement that boosted both companies’ shares.

Under the 15-year agreement, Finland’s Nokia will make an

upfront payment to U.S. firm Qualcomm and pay subsequent

royalties, but it said payments per phone would fall.

Nokia’s net royalty rates for access to Qualcomm’s patents

will drop under the agreement, Nokia’s Chief Financial Officer

Rick Simonson told Reuters on Thursday.

On average, Qualcomm charges phone makers close to 5

percent of the price of a handset, though there are small

variations between deals.

Shares in Nokia were 2.1 percent higher in Helsinki at

17.31 euros by 1115 GMT, outperforming a flat DJ Stoxx European

technology index (.SX8P), while Qualcomm shares were indicated

to open up more than 20 percent at $54.19 later in the U.S.

“Nokia negotiated a very good deal, and the others will

demand that too,” said analyst Helena Nordman-Knutson, from

Ohman Fondkommission in Stockholm.

“If there is an agreement where royalty per unit goes down,

the others won’t agree to stay on their old levels. Potentially

it’s good for everyone with these kinds of big deals,” she

said.

Ericsson (ERICb.ST), Broadcom (BRCM.O), NEC (6723.T),

Panasonic (6752.T) and Texas Instruments (TXN.N) have all filed

complaints with the European Union alleging anti-competitive

conduct by Qualcomm, including excessive royalty rates.

The deal with Nokia, which ends all legal cases between the

two firms, covers the world’s most widely used mobile phone

technologies and some key emerging ones.

The companies did not reveal specific financial details.

UNCERTAINTIES REMOVED

“I think it is good for Nokia. There have been a lot of

uncertainties around this issue, and all these are now

removed,” said Martti Larjo, an analyst with Nordea.

“It has wide-ranging implications for both companies, but

we expect Nokia will be hoping to capitalize on it in the key

North American market, where it has struggled to make headway

with leading CDMA carriers,” said Ben Wood, research director

at CCS Insight.

Nokia’s CFO Simonson said Nokia had made ample provisions

for settling the row, but declined to name the amount.

“They were more than enough,” he said in an interview, but

did not want to quantify the impact the settlement could have

on Nokia’s third-quarter earnings.

“This gives me incremental benefit and this is over 15

years. People should not be looking at the third quarter impact

on a 15 year agreement,” he said.

(Additional reporting by Agnieszka Flak in Helsinki and

Sven Nordenstam in Stockholm, editing by Will Waterman)