As mentioned, GSM was a slow starter in commercial terms, something the skeptics never failed to point out. Outside Europe, GSM could expect competition from other standards for digital mobile telephony.
The American TDMA standard, which had after all been adopted after ERA’s victory in the US in 1988, also got a challenger. During 1989, a company called Qualcomm began to point out the advantages of CDMA over TDMA. Qualcomm’s most important backers were two gentlemen named Irwin Jacobs and Andrew Viterbi, the latter famous for the algorithm that had contributed to Torleiv Maseng’s victory in Paris in 1987.
Jacobs and Viterbi had studied together at the Massachusetts Institute of Technology and had set up a successful company called OmniTRACS, to create a satellite-based wireless network mainly to enable communication between truckers all over the North American continent.
Industry body, the CTIA initially gave the CDMA proposal a lukewarm reception, but by 1991 Qualcomm had persuaded a dozen or so American telecom companies to undertake large-scale tests of CDMA technology. Once again a serious discussion about standards started in America and in 1993, the CTIA accepted CDMA as an American mobile phone standard.
Motorola, for one, “seized upon this new standard to exclude the Europeans, primarily Ericsson and Nokia”, write Meurling & Jeans. In this way the American market could expect to split into two camps, one based on TDMA and the other on CDMA.
JAPAN AND CHINA
Another major issue was which standards the large markets represented by Japan and China would opt for.
ERA was given its chance in Japan in 1989 through the dinner-table promise mentioned earlier that led to an invitation to take part in specifying the Japanese digital mobile telephony standard.
In 1992 the Japanese telecommunications agency NTT spun off its DoCoMo division for mobile telephony operations; digital mobile telephony was launched in 1993, and in 1994 the Japanese telecom market was deregulated completely.
Lars Ramqvist describes Ericsson’s entry into Japan as a gamble. “We were dealing with an enormous market and the Americans were applying a lot of pressure, mainly to pave the way for Motorola. But the Japanese wanted to stamp their own identity on the system, and we were successful with the modifications and began to win orders. When I presented the case to Ericsson’s board, I said we would have to wait four years before our investment in Japan yielded a profit. But things went much more quickly than that.”
ERA’s first reconnaissance mission in China was made by Arnfinn Röste, “a lone wolf with an exceptional ability to sniff out and analyze new business possibilities” according to Meurling & Jeans. Then Kurt Hellström landed the first Chinese contract, in Guangdong in 1987. This was for an NMT system – which became a TACS system as the Chinese clients had become familiar with one in Ireland. ERA delivered TACS to the customer without rewriting the contract specifying NMT.
BANNED SIGNAL SYSTEM
Another problem arose in a different deal in China involving AMPS – the signal system needed was banned for export to certain countries on the American Strategic Exports list. This contract led to complex negotiations with the American authorities, but ended up happily for ERA.
The main protagonist was Madame Li Mofang, head of technology at China Mobile. Jan Uddenfeldt describes her as “incredibly competent, wise and amusing”. Li could see the advantages of international solutions and soon backed GSM.
In 1994, Ericsson received its first Chinese GSM order. Uddenfeldt recalls: “That was thanks to Li, who maintained that GSM was superior to the American standards. She laid the foundations for an enormous success: China Mobile’s GSM network was eventually to become the largest in the world.”
Ramqvist adds: “We were criticized in some quarters for doing business with a dictatorship like China. We responded that we did not feel we should be negative about the idea of people talking to each other.” He praises Alf Svensson, Sweden’s minister for foreign aid & human rights from 1991 to 1994, for his support. “Some harsh things were said about Alf Svensson in Sweden but he could see further than his critics and meant a great deal for Sweden’s export industries.”
Author: Svenolof Karlsson & Anders Lugn
