Battle on several fronts

But Ericsson and Nokia found themselves fighting numerous battles during the year. One involved the refusal by DoCoMo’s parent company, NTT, to accept its subsidiary’s introduction of GSM in the Japanese core network. Ericsson and Nokia spent the entire spring of 1997 waiting for the Japanese to make up their minds, but were told different things every day.

For 25 years, Melamies had viewed Ericsson as his worst competitor and now he was sitting at in the same room negotiating a joint strategy. Fortunately Nokia was also represented by Heikki Ahava and Yrjö Neuvo in the negotiations; unlike Melamies, they were both used to talking to competitors.

In May 1997, Ericsson and Nokia summoned NTT DoCoMo to three-way negotiations at Kista. The competitors sat down at the same table as both companies’ largest customer. Melamies could not help smiling to himself when Ericsson’s Torbjörn Nilsson began to talk: his hair stood on end and his cheeks were red, ‘just like someone from Nokia.’

He noticed that the mood had changed since the first meeting between Ericsson and Nokia, when they had both glanced furtively at each other. Now they were speaking frankly, with no beating about the bush. The Japanese were also unusually candid. During the breaks the participants naturally divided into two groups: the Japanese in one and the Swedes and Finns in the other. And they were speaking Swedish! Did sharing technology mean they had a common language?(Miettinen & Pietiläinen)


Gunnar Sandegren, who took part in the Kista meeting, says DoCoMo still did not dare to place complete trust in Nokia’s decision to go for WCDMA.

“Jan [Uddenfeldt] and I sat together in Kista and planned our tactics. Jan warned me that the Japanese would ask questions to check facts. ‘Then you must not answer, Gunnar. You have to let Nokia answer!’ The meeting went as Jan had predicted. The Japanese asked a question where the answer would reveal which technology had been chosen. But the Finns did not want to say anything. Jan had to keep the conversation going for a long time and finally he kicked Yrjö [Neuvo] in the ankle under the table. Then at last confirmation came: Nokia had made the same choice as us.”

Heikki Ahava adds: “At this stage we did not know at Nokia that Ericsson and DoCoMo had such long-standing and intensive cooperation. We realized that they were in contact but not to this extent.

The biggest battle for Ericsson and Nokia was to be against their other industrial competitors. They tried at first to get Siemens to join their alliance, but after negotiations in July 1997 it became clear that Siemens had adopted a hostile stance.

This became apparent for the rest of the world at the meeting of the GSM Association in Cyprus in September when Siemens, with all the other major manufacturers  (Motorola, Alcatel, Nortel, Lucent), launched a competing 3G proposal, TDMA-CDMA, both based on FDD mode (Frequency Division Duplex for paired spectrum) and TDD mode (Time Division Duplex, for unpaired spectrum).

Thomas Beijer recounts: “In the end these acronyms became intolerable. In the standardization contexts, Ericsson’s and Nokia’s proposal began to be referred to as the Alpha proposal and the competing one as the Delta proposal.”

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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