The break-up of the monopolies paved the way for competition but also for alliances and collaboration. In Germany, as mentioned, Siemens and Ericsson were making approaches to each other.

An opportunity arose in France after the French telecommunications agency invited tenders for 16 percent of the French market for fixed-network exchange systems; Alcatel had previously enjoyed a monopoly in this market. AT&T, Siemens and Ericsson threw their hats into the French ring. One requirement was that they had to work together with a French partner.

After long and complicated negotiations under the watchful eyes of French politicians, Ericsson and French company Matra formed a joint venture called Matra Ericsson Telecommunications (MET). Matra – represented by its research company LCT – had been one of the contenders in the GSM tests in Paris and, like the Nordic candidates, had presented a narrowband TDMA system.

One of the French demands in the AXE partnership was that Matra was to be in charge of all development of GSM radio base stations for the two companies. In other words, ERA would have to close down its own development program in Kista. “We accepted this condition unwillingly but we could soon see that Matra based its work on radio technology that was hopelessly obsolete. A lot of customers demanded the right to use our base stations and after a great deal of hassle we were able to renegotiate this section of the agreement with Matra,” Johansson says.

But another clause was even more dramatic. Matra demanded that Ericsson share all future GSM deals so that Matra would get one-third and Ericsson two-thirds. “Within Ericsson, we were very splintered,” Johansson says. “Åke Lundqvist and I absolutely didn’t want to accept this, but Björn [Svedberg] pushed it through. He felt it was worth it to get to sell AXE in France.”

LUNDQVIST DISMISSED

At Midsummer in 1988, the issue led to a clash between Svedberg and Lundqvist. The setting was a customer trip to Kiruna in the far north of Sweden, to allow some American guests to experience the midnight sun. Johansson recalls: “We had planned a 48-hour program that offered some really great entertainment. Many of the clients we had invited brought their wives or husbands along, and there was always someone from the Ericsson executive team there.”

On the plane up to Kiruna, there was a lively discussion between Svedberg and Lundqvist about the Matra question. Lundqvist spoke his mind. On the Monday, he was summoned to Telefonplan by Svedberg and told that he was dismissed.

Johansson learnt about this a month later, when it was announced after the summer vacation that Svedberg had appointed Lars Ramqvist to take over Lundqvist’s post as CEO, and that Lundqvist was from then on to work in the group’s central management.

This naturally gave rise to a lot of corridor gossip. Uddenfeldt puts it like this: “Everyone at Ericsson knew that Åke and Björn did not get on with each other. But because Åke stood up for his staff, the conflict was not really negative for ERA. On the contrary, the psychological effect was that at ERA, we had to look after ourselves and do business on our own merits.”

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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