In this situation DoCoMo wanted to expand the group pushing for 3G. Both Ericsson and DoCoMo saw Nokia as the perfect partner.

In the autumn of 1996, Nokia and DoCoMo had begun to take the measure of each other in a series of meetings in Finland. The Japanese guests were able to try many of the activities the Nordic country could offer, from saunas to picking berries and mountain biking through boggy marshes. On one occasion, the head of the Japanese delegation, Hironobu Takeuchi, stood up at a dinner party to thank his hosts and surprised everyone by beginning to sing. His spellbound audience realized that the relation¬ship they were forming had now entered a deeper phase.

In practice, the pact between Ericsson, Nokia and DoCoMo was concluded shortly after the beginning of 1997 when Nokia decided to shift from its WTDMA approach to Ericsson’s WCDMA, from time-division to code-division.

Uddenfeldt recalls: “We managed to convince Nokia. Their director of technology, Yrjö Neuvo, and others at Nokia could see the benefits of a global standard in the form of WCDMA. So this led to an interesting situation in which Ericsson and Nokia began to act in concert.”

NOKIA’S ABOUT-TURN

The decision to shift direction was not, however, an easy one for Nokia. There was a dividing line between the “mobile people” and the “network people” in the company: the former had got used to adapting mobiles to various standards, while the latter had virtually no experience of any technical platform other than TDMA.

TDMA was one of the factors behind the success of Nokia as a whole and a source of corporate pride, wrote Anssi Miettinen and Tuomo Pietiläinen in a detailed article about the company in Helsingin Sanomat in 1999. “This mental revolution was accomplished in true Nokia fashion using informal methods. They did not arm themselves with documents and battle it out department against department. The decision evolved through discussions between individuals, chats around water-coolers and in e-mail groups. At the same time, calculations and simulations were being made in the laboratories at a furious rate to produce the technical information to base the decision on.”

In February 1997, in connection with Nokia’s presentation of its results for the previous year – which showed that the company had become the world’s largest manufacturer of mobile phones – Lauri Melamies, who chaired Nokia’s future vision group – presented three 3G scenarios: Europe, Japan and the US could all take different directions; there could be chaos and 3G would never come into being at all; or Nokia would have to work for a “historic compromise” based on WCDMA and GSM.

“Nokia took courage from Ericsson’s previous decision to do the same thing. A shared objective united the bitter competitors,” wrote Miettinen and Pietiläinen.

SECRET FACTOR

There was also a secret factor in the background. Nokia had surreptitiously funded basic research in what was known as the Spread Spectrum and CDMA Techniques at Uleåborg University. This research headed by Matti Latva-aho, later to become a professor, now paid off.

At the GSM conference in Cannes, also in February 1997, Uddenfeldt managed to get hold of the GSMA’s retiring chairwoman, Gretel Hoffman, and her successor, Adriana Nugter. He argued that the GSM operators had to agree on a 3G decision immediately; otherwise there was a risk that CDMA2000 would become too powerful.

“Both represented US-owned operators, which made it a lot easier to be understood. The head of Mannesmann, George Schmitt, was also an important advocate,” says Uddenfeldt. As a result, ETSI’s timetable began to take shape and the objective was to have the main features ready during 1997. Friedhelm “Fred” Hillebrand, who chaired ETSI’s standardization group, did a great job in the preparatory work.

 

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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