ERA’s third triumph took place in Canada. These licenses involved the 23 largest cities from Vancouver in the west to Quebec City in the east. After the applications had been submitted, it was decided that two operators, a telephone company and a non-wireline carrier, would each be awarded a nationwide license.

Cantel, part-owned by Rogers Communications, was awarded the non-wireline carrier’s license. The company had not specified ERA, because one condition was that suppliers were supposed to be Canadian. But Cantel appointed a technological director, Nick Kauser, to develop this major system and he did not believe that the specified Canadian supplier Novatel would be able to deal with the largest cities.

Kauser knew AXE well because he had worked as a start-up consultant for a telecommunications system in Venezuela; he persuaded the company board that it needed a switch with AXE’s capacity. Walter Steel, the CEO, visited Stockholm to meet the new head of ERA’s mobile telephony division, Ulf J. Johansson. The two reached an agreement in principle over dinner; then the detailed negotiations began. 

Ljunggren says: “After three months of tough negotiations, with Ulf traveling to Toronto every fortnight to negotiate and me working with the customer in the meanwhile, we were able to sign a contract in the autumn of 1984. Canada was to be a fantastic reference for us. We could demonstrate a network that worked well, where we had introduced the same roaming solution as in the UK and it worked all over the country.”

Johansson adds: “This was my first major deal and I learnt an enormous amount from it. It involved both three-way and four-way negotiations, with Canadian politicians taking part. We had to structure the deal so that Novatel was included but without them doing anything. Another condition was that we were to set up a development center in Toronto.”

The center was a success. In 2009, Ericsson had 700 development engineers there.

COMPLETE SOLUTIONS

Lundqvist commented in 1986: “Everyone had reckoned that AT&T and Motorola would get everything. When we turned up, they laughed at us. It turned out, however, that a third of the evaluations opted for Ericsson after only a few months. How we were able to manage that is still a mystery.”

One explanation can be found, however, in ERA’s unified approach. It was selling complete solutions. There was also pent-up animosity in the US to Motorola, an enormous company that was considered arrogant.

In addition, the Swedes’ attitude won respect in the US. They did not go in for the usual sales talk and were more likely to understate things than to exaggerate. Above all, they kept their promises. A handshake was enough and agreements with hundreds of pages were unnecessary. In the lawyer-intensive American business world, this was enormously appreciated. At McCaw Cellular, they began to refer to Ericsson’s staff as ‘yasures’ – because, as Wayne Perry, president of McCaw during the 1980s, put it: “Whenever we asked for something, they always answered, ‘Ya, sure, Wayne, we’ll do that’”.

The official premiere for mobile telephones based on AMPS took place in Chicago on October 13, 1983.

Without Åke Lundqvist, developments would have taken a completely different direction, says Jan Uddenfeldt. “If Åke had not gone in for the systems market in the US, Ericsson’s mobile telephone operation would never have gained the market share it attained later. Åke’s decision must be seen as a milestone in the history of Ericsson, especially in view of the fact that group management advised him against it.”

 

 

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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