Sweden and the rest of the world soon began to get seriously involved in what was later to be called the IT bubble. Many claim it began in the US on August 9, 1995. A small company in Silicon Valley called Netscape had not earned one cent during the two years it had been running, but then it developed a web browser that led to an explosive increase in internet usage. On the first day Netscape stock was traded publicly, the price leapt from $28 to $71.
One description of events comes from the former head of the American Federal Reserve, Alan Greenspan: “The internet gold rush was on. More and more start-ups went public to fantastic valuations. Netscape stock continued to climb; by November the company had a higher market capitalization than Delta Airlines, and Netscape chairman Jim Clark became the first internet billionaire.”
The term broadband began to be used frequently. There is no consensus about what the word means and many experts describe it as a hackneyed marketing term. Generally speaking, however, it has come to refer to high-speed links to computer networks that enable users to stay online all the time. Both the ITU and the EU have defined the minimum speed for a broadband connection as 256 kbps.
The buzz about broadband and the internet was a sign that new forces were beginning to dominate global communications. Although it was unclear how these forces could be harnessed, there was no doubt about their potential.
ERICSSON AND THE INTERNET
Ericsson’s approach to IP (Internet Protocol) and the internet in the mid-1990s is sometimes offered as an example of a company that fails to understand trends.
One 1995 conference at Södertuna, just south of Stockholm, when the trauma around the AXE-N was at its worst, is cited in particular: Ericsson’s management was said to have expressed a highly negative view of the internet, one reason Ericsson got left behind in the field of IP technology.
Uddenfeldt says, however: “The whole idea with 3G, third-generation mobile telephony, involves broadband internet access for mobile users. This insight and this incentive could already be found at ERA around 1992 and that meant we saw 3G as an important next step.
He mentions, for instance, that in 1992 itself, the major frequency allocation conference organized by the WARC (World Administrative Radio Conference) decided on a spectrum for 3G – in the 1900–2100 MHz frequency band – in Europe on the assumption that much of the traffic would have access to the internet.
Ramqvist also emphasizes the internet activities based on radio technology launched by Ericsson that same year. And he points out that the Södertuna conference only came to the conclusion that the standards then in use did not provide acceptable speech quality for a public telephone network.
“We are all used to good voice quality on the phone. At that meeting, it was asserted that normal speech telephony based on the internet was impossible except in defined and well controlled network structures,” he says.
Ramqvist also says that in 1995, Deputy CEO Anders Igel and his management group (in the business division for public telephony) were already advocating that Ericsson should invest in routers for data transfer based on the internet. A division led by Rolf Eriksson was given the task of acquiring interesting internet-based companies.
Jöran Hoff says: “At ERA, we were carrying on a lively discussion about greater adaptation to the internet but it was pointed out, probably quite correctly, that mobile systems would not be playing a leading role when the internet was rolled out globally on a large scale.”
Thorngren says that, when discussing internet issues, people often talk at cross-purposes by referring to different periods.
“If your point of departure is mobile internet access of the kind we are beginning to get now, in 2009, then 3G inevitably involves a compromise. But if you wind the film back to 1992, there is hardly any point in talking about the internet as it is today. At that time the fixed network was also only able to offer text traffic at speeds of about 28.8 kbps,” he says.
Author: Svenolof Karlsson & Anders Lugn