This was how things worked in America. If Ljunggren and his colleagues wanted to do business with the American operators, they had to do more than sit around and wait. Three deals in particular showed what they had to do.
The first was in Buffalo, the 23rd-largest MSA. Ljunggren describes what happened: “The applications for the section of the spectrum awarded to non-telephone companies varied from two to 12 in each market. It was obvious that if these licenses had to wait until after what were called ‘comparative hearings’, it would take years before all 30 systems could be built. And the telephone companies would have an unassailable market position.
“A comparative hearing was a session that could last several days in which each application was analyzed in detail before a judge from the FCC. The structure of the system and its coverage, marketing plans and tariffs, finance plans and so on had to be taken into account. Witnesses could be called, to describe in detail what coverage the system would offer if built according to the plans. You could never be certain of the outcome, because the regulations about the evaluation were vague.
“The result was that companies began to reach agreements, effectively to withdraw all the applications but one, and transfer this to a telecom-operator company in which all the applicants had shares. The first agreements were reached in Indianapolis and Milwaukee: all the applicants had specified Motorola as the supplier, and Motorola got the contracts.
“The next MSA to reach an agreement was Buffalo, where there were three applications. One of the three had nominated SRA as the supplier, but it was more than likely that Motorola would get the contract because one of the other applicants was Graphic Scanning, which had been involved in the previous
agreements.”
TIGHTENED UP THE TERMS
Then Ljunggren heard a rumor that Motorola had tightened up the terms on which it would deliver. This annoyed the partners and they decided to arrange an official procurement. With the help of ERA and X-division, Ljunggren put together a tender that included more than 100 pages of supplements.
“The tender had to be submitted before 4pm, 30 kilometers from our office. But we had forgotten that it was a public holiday in America, so I got stuck in unexpected traffic on the highway and only managed to get there five minutes before the deadline. Things went so far that the customer rang my boss, Leif Holm, to ask if we were thinking of participating. I never found out what would have happened if I had arrived five minutes later,” Ljunggren recalls.
After numerous all-night negotiations, ERA won the contract, which was worth around USD 4.5 million. Ljunggren praises Leif Holm, who was a very skilful negotiator. And Buffalo happened to be the city in which L.M. Ericsson had set up its first American factory at the beginning of the century.
Author: Svenolof Karlsson & Anders Lugn