State competition


In 1890, Erik Storckenfeldt became director-general of the Telegraph Board. It soon became obvious for Storckenfeldt, a hard-working and unsentimental person, that the telephone was taking over the telegraph market.

His expressed aim was to gain total control of Sweden’s telephone network. SAT and Cedergren were his obvious rivals. Johansson writes: “This contest was waged with particular severity and ruthlessness during the period (1890–1902) in which Storckenfeldt was the head of Rikstelefon.” Two dynamic, equally powerful men faced off against each other, using tactics “which on closer scrutiny would perhaps have been seen as less than squeaky clean”. Tariffs were one weapon and Storckenfeldt had the great advantage of Rikstelefon’s growing strength at the national level. As he battled with SAT, he could accept losses in one region, knowing that Rikstelefon was making up for them elsewhere.

According to a study by Rikard Skårfors, during the period in which Storckenfeldt was head of the Telegraph Board, 1890–1902, it acquired more than 400 local networks in Sweden. This means that under his leadership it went from supplying 20 percent of the telephones in Sweden to 65 percent.

The situation became particularly worrying for SAT when Rikstelefon reduced its annual subscription fee to 80 crowns, including unlimited calls. SAT followed this example for new subscribers. But it had the problem of what would happen when existing subscriptions – with customers paying 100 crowns for unlimited calls and which formed the bedrock of its operations – gradually expired. Would SAT have to lower its annual subscription fees as well?

Johansson recounts: “The solution sprang from a brilliant idea from the mind of one woman [Elly Pegelow].” There were no additional benefits that 100-crown subscribers did not already enjoy, but, on the other hand, SAT could allow all subscribers paying lower rates but who had restricted numbers of calls (for instance 100 outgoing calls per quarter) the privilege of calling to 100-crown subscribers without these calls being included in the quota. Most of those paying 100 crowns were stores, traders, offices and the like, and they could be expected to benefit from a satisfied and extended clientele (their customers would, after all, be able to ring them free of charge).

To denote their privileged position, 100-crown subscribers were marked with a star in the telephone directory, a distinction they came to value. “This brilliant idea more than lived up to expectations,” recounts Johansson.

Author: Svenolof Karlsson & Anders Lugn


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