New Nordic cooperation?
One of Televerket’s countermoves was to set up a new company in 1987 – Scandinavian Telecom Systems (STS) – for joint Nordic initiatives in fixed telephony in foreign markets. The following year the other Nordic telecommunications agencies became partners, after the necessary decision by the Storting (parliament) where Norway was concerned.
Not much came of it. “One explanation can be found in the differences in the structure of the business world,” Thorngren says. “Sweden had a much higher proportion of multinational companies than the other Nordic countries. Another difference could be seen in the attitude to competition between telecom networks forecast by the EU. Why offer ‘premature’ discounts while you could still hang on to your monopoly prices?” In other words the Nordic countries were out of step.
“I remember a comment from the head of the Finnish telecom agency, Pekka Tarjanne: ‘Now we are obviously going to be future competitors.’ Pekka said this half in jest but for us in Sweden it was deadly serious.”
The other countries could see no justification for funding an increased international presence. “STS passed away peacefully without any fuss,” Thorngren says.
Televerket placed all its hopes instead on the wholly owned Swedish Telecom International AB (STI) and a satellite project called VESATEL. This in turn marked the starting point for cooperation with the Netherlands and Switzerland, two other small countries with a large proportion of multinational companies. The framework for this collaboration was provided by Unisource, a company established by the telecommunications agencies of the three countries in 1991 and which was intended to operate on the international market.
MASSACRE IN OSLO
The next question was how to cooperate on mobile telephony.
Bo Magnusson from Televerket Radio recalls: “The Nordic operators were in great demand as partners. This offered us a golden opportunity to make joint capital from our strength in the mobile area. The key lay in being able to transform technical cooperation into expanding commercial cooperation.”
The telecom agencies in Sweden, Switzerland and the Netherlands established a company for this purpose, Unisource Mobile. The aim was to enable coherent international expansion in mobile telephony.
The cooperation with the Netherlands had brought back an old idea. In the mid-1980s, the Dutch had tried to join the work on NMT, but were rejected by their Nordic neighbors. One reason given was that it would risk the group moving forward at different speeds, another that the working language would have to be changed from “Scandinavian” to English.
The outcome of this grouping, however, was the implosion of Nordic cooperation. This became obvious at the “Oslo Massacre”, a meeting in Oslo, where the operators from Telia’s Nordic neighboring countries were offered, in what they viewed as a humiliating ultimatum, the chance of acquiring a few percent each of Unisource Mobile’s shares.
“After that meeting, there were some unflattering headlines in the press pointing to Televerket as the company that wrecked successful Nordic cooperation in the field of mobile telephony,” says Magnusson, who was briefly the company’s managing director. “I gave up my position because I could see no way for Unisource Mobile to operate profitably. Everybody wanted to form partnerships with the Nordic countries but nobody wanted the combination of Sweden, the Netherlands and Switzerland.”
Part of the problem, Magnusson says, was that many of those in leading positions in Televerket opposed and obstructed internationalization, “even though it was perfectly clear that Televerket was going to lose domestic market share more and more rapidly”. Magnusson frequently had to short-circuit procedures and go straight to Tony Hagström “to get decisions that would ensure important deals”.
Thorngren’s analysis is: “The Netherlands and Switzerland could provide funding but not enough to make up for the expertise and experience that had been developed in the Nordic countries.”
Author: Svenolof Karlsson & Anders Lugn
An internal Telia cartoon showing the big competitors