The campaign starts

The alliance between Ericsson and Nokia was now put to the test in increasingly warlike circumstances. In the autumn of 1997, they undertook a long, joint campaign against the European operators. As Miettinen and Pietiläinen write: “The Nordic mobile manufacturers were now firm friends. They even used the same presentation material. At a large meeting in Amsterdam in November attended by almost all the European operators, they handed out pens with Nokia’s logo on one side and Ericsson’s on the other. The competitors coined the term ‘Scandi mafia’. Even the sales departments were working together.”

This situation caused the European Commission concern. Its clear message was that Europe must on no account become divided and lose the initiative to the US. Jacques Santer, president of the commission, who backed Ericsson and Nokia, summoned the contending parties to a mediation meeting in Brussels on October 31, but without success. Martin Bangemann, now commissioner for telecommunications, made another attempt a few weeks later.

It is obvious that Finland’s President, Martti Ahtisaari, threw his weight behind the cause. During a visit to the UK before its impending presidency of the EU, Ahtisaari explained Finland’s stance on the 3G issue to the British prime minister, Tony Blair. He had with him a briefing document written by Heikki Ahava. The result, says Ahava, was that Blair announced personally that the British would support WCDMA in ETSI.

Lars Ramqvist says of the situation: “A major problem in the maneuvering around the 3G standard was that Ericsson had done so well out of GSM. The attitude of the British government was to be a deciding factor. On January 14, 1998, I met the British minister for trade and industry, Barbara Roche, at the British embassy in Stockholm. She had been sent by Tony Blair and her message was that Britain regarded Ericsson as a British company. Shortly afterward Blair got the British government to decide to support our 3G alternative.”

The view of Ericsson as British dated back to an event when Margaret Thatcher had been prime minister. After all, Thatcher was an active proponent of deregulation and privatization in the telecom industry. In March 1985, Ericsson was competing for an SPC (computer-regulated telephone systems) contract for British Telecom and was told by Thatcher that it would get the order if the company built a factory in the UK. It did.

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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