One of the most important figures in Stockholm telecommunications in the 1880s was Henrik Thore Cedergren, mentioned earlier as the owner of a jeweler’s store. Stockholm-born Cedergren was six years younger than Lars Magnus Ericsson and came from a totally different world. As a young man, Cedergren had taken over his father’s jewelry business and also set up in the then-booming building industry. Cedergren’s businesses included a brickworks on Södermalm.
Cedergren, who had also graduated as an engineer from the Technology Institute, had come into contact with the pioneering telephone experts during several study trips to the US. It was said of Cedergren that if he saw a sign saying “No entry”, his comment would be “Let’s go in. There’s something interesting here!” To cap it all, Cedergren had vision and a nose for business, as well as “outstanding organizational and administrative talents”, according to Ericsson historian Jan Kuuse.
As a Bell subscriber, Cedergren worked out both that the company was overcharging and that it would be more successful if it charged less and gained more subscribers. He got in touch with Bell management but they had no interest in altering their business approach. Cedergren then began investigating the possibility of competing in the telephone business.
L.M. Ericsson & Co.’s errand boy, Gabriel Bildsten, may have played a role. One day in the spring of 1881 he was sent to Cedergren’s jewelry store to buy silver for electric contacts. Inside the shop he caught sight of a telephone and cheerfully said, “Well, my boss makes much better ones!” Cedergren quickly donned his coat and followed the boy back to the workshop, where he met Lars Magnus Ericsson for the first time. And indeed, Lars Magnus could make better telephones.
The upshot of Cedergren’s calculations was that a telephone in Stockholm need not cost more than 100 crowns for a year’s subscription. One requirement was an assurance that the quality of the telephones and exchanges was at least as good as Bell’s – and he saw that L.M. Ericsson & Co. could provide this. In comparison, Lars Magnus was at first more cautious and non-committal. It is also widely known that he was skeptical of “engineers on paper” – which is what Cedergren was, after all.
But irrespective of what their discussions were like, the two ended up signing a partnership agreement. In February 1883, Cedergren issued a prospectus for the establishment of a new, independent Swedish telephone company, Stockholms Allmänna Telefonaktiebolag (SAT), which would offer “public telephone connections at a lower price and the use of Swedish equipment”. It aimed to provide “telephone lines in every building and for all the tenants in them”. L.M. Ericsson & Co. had to undertake on its part not to supply telephones or any other equipment to any other telephone company in Stockholm.
Cedergren successfully lobbied the Stockholm Property Owners’ Association – telephone lines had to be drawn across rooftops and this often led to major practical problems. The association adopted the view, however, that the company should be “encouraged in every way” and permission to cross the rooftops was often granted free of charge.
Stockholms Allmänna Telefonaktiebolag [Stockholm Public Telephone Company] was founded in April 1883 and began operations on May 15; by the end of June more than 600 shares had been taken up. On October 31, 1883, it opened its central telephone exchange at Oxtorgsgatan 6, Norr-malm, in north-central Stockholm; on December 1, another at Urväders-gränd 9, Södermalm; and on March 1, 1884, one at Svartmangatan 6 in Gamla Stan.
A 1,200-line gantry was erected on the roof of the central exchange, which was built to cope with 3,000 subscribers.
The partnership with SAT was to be the making of L.M. Ericsson & Co. In 1883, Lars Magnus and Cedergren jointly exhibited telephones, “automatic changeover switches” and Ericsson switchboards at the major International Electrical Exhibition in Vienna. And SAT was ordering more from Ericsson than ever before: in 1883, for example, it ordered 1,000 telephones. This meant that Ericsson could celebrate the production that same year of its 5,000th telephone.
This eliminated any doubts Lars Magnus may have had about his company expanding, and it soon acquired proper premises of its own. Work started in late 1883 on a new factory on Tulegatan, with production shifting there in the autumn of the following year. From then on the factory was continually being extended up until the end of the century.
Author: Svenolof Karlsson & Anders Lugn