Let us begin by identifying some milestones for the company founded by Lars Magnus Ericsson in 1876.

1. Lars Magnus constructed his telephone model, with a spiral microphone, at the end of 1880. Its rapid success in Gävle, Bergen and other cities convinced him that he could stop being a generalist and concentrate instead on the telephone industry.

2. Lars Magnus decided to concentrate on the overseas market. He had to start thinking in these terms when Telegrafverket started producing its own telephone equipment in 1891. The issue became urgent when Stockholms Allmänna Telefon, headed by former partner Henrik Thore Cedergren, made the same decision in 1896. Suddenly the Swedish market was closed off to Lars Magnus. Faced with this situation, he prepared to move to St. Petersburg, bought a site and built a large factory there. He sent off sales agents on adventurous journeys all over the world.

3. Lars Magnus then reclaimed Sweden as the company’s domestic market. This stemmed from Cedergren winning concessions to operate telephone services in Moscow and Warsaw in November 1900; he quickly realized that his own factory would be unable to cope with the volumes required. Lars Magnus made an offer for Cedergren’s factory and regained a Swedish base from which to work. At almost the same time, Lars Magnus left his company, almost overnight, to begin a new life as a farmer and inventor at his manor house at Alby, south of Stockholm.

NO STATE SUBSIDIES

4. During the whole of the 20th century, the relationship between L.M. Ericsson and Televerket, the Swedish telecom agency, resembled that of two rival brothers. Although they had close contacts, Ericsson could manage on its own merits with no state subsidies. One decisive event came in September 1969 when Marcus Wallenberg, representing one of the main owners, intervened to urge collaboration on a digital switch through the Ellemtel joint venture. The search for a solution that could meet a range of needs led to the highly successful AXE.

5. Between 1969 and 1981, the Nordic telecom agencies developed the NMT mobile telephone system. Its system architecture was far better than anything else in the sector, the technology was extremely intelligent, and it offered the only roaming function in the world. NMT laid the foundation for today’s mobile telephony – but L.M. Ericsson almost missed the boat. The company agreed to develop the AXE for the NMT system only after it had been forced to the altar with a shotgun.

6. Then came the Lundqvist era. Åke Lundqvist’s initial idea was that SRA and LME were jointly to sell complete mobile systems rather than components. One decisive moment came in 1981 when Lundqvist hammered his fist on the table during talks with the Dutch telecom agency. Subsequent events revealed that Ericsson, unlike its competitors, had included antennas in its tender, even though they had not been specified. Without them, the system would not work.

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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