"Why not set your sights on the US?"
With the launch of NMT, Ericsson’s modern success story began to take shape, driven by Åke Lundqvist. One of his crucial decisions came in January 1982 when, immediately after the decision in the US that the first round of mobile telephony licenses were to be issued, he decided that SRA (renamed ERA from the beginning of 1983) was to head into America and pitch to candidates in the impending struggle for mobile concessions.
Lundqvist’s decision was based on a new commercial idea: to sell entire mobile systems. But a spontaneous comment from Chandos Rypinski, one of the American cell-planning consultants Lundqvist had employed in the Netherlands, also played a role: “Mobile telephony is what you do well, after all. Why not set your sights on the US?”
The other American cell-planning expert used in the Netherlands, Jan Jubon, supported the argument. Jubon had at one time worked for Motorola but quit in disappointment at the company’s insignificant investment in exchanges. Through his contacts with SRA, he now got to know about the AXE and became enthusiastic. In 1981, Jubon celebrated Christmas in Stockholm, which gave him an opportunity to get to know Åke Lundqvist better. Mats Ljunggren recalls: “Jubon was really knowledgeable about exchanges and he explained to us that we had every chance in the world in the US.”
Åke Lundqvist told a newspaper in 1986 that he was doubtful: “At first we didn’t believe it was possible. After all, we would then be competing with AT&T, one of pioneers in this field. And another American company was Motorola, which had invested USD 500 million in cellular radio systems”.
To rise to this challenge, Ericsson needed to start by learning about the American system of “markets.” The whole of the US had been divided into 734 markets by the US Census Bureau. Just under half of these markets were classified as urban areas, or MSAs (Metropolitan Statistical Areas). For this classification, an MSA had to contain one city with a population of at least 50,000, or include urban areas with populations totaling at least 100,000.
The FCC principles for mobile licenses seemed very simple: two would be granted in each “market”, one for one of the fixed-network operators in the MSA and one for a new contender.
That, however, is where the simplicity of the process came to an end. The process soon became chaotic. How does anyone manage the allocation of 1,500 licenses, and what criteria should apply?
RACE AGAINST THE CLOCK
It could be taken for granted that the Bell companies, including AT&T, would carry off most of the American mobile concessions. AT&T was the world’s leading telephone company – or at least the largest one, with the most resources. In 1982 the Bell companies had more than 1 million employees. Few fixed-network operators would seriously consider any supplier other than a company from the Bell sphere.
SRA had to aim for the licenses that would end up with Bell’s competitors, often a local radio company (an RCC, or Radio Common Carrier), cable-TV company or a TV station. But for these operators, Motorola or possibly Northern Telecom (later Nortel) from Canada were the logical alternative suppliers.
Even so, SRA staff made encouraging contacts in the US. Lundqvist says: “It was great to meet people who were competent. Our staff could talk to them and get answers straight away. We had the know-how, and we got confirmation of the value of having a complete system and not just the components for one.”
One of SRA’s weaknesses was lack of time. The FCC decided to deal with the licenses in groups of 30 markets, beginning with the 30 largest – with New York, Los Angeles, Chicago, Philadelphia and Detroit as the top five. Applications – specifying, among other things, the supplier of the equipment – had to be submitted in June 1982.
In other words, SRA had very few months in which to present its solutions and its equipment as alternatives to the candidates that intended to apply for licenses in these 30 markets. And SRA’s specifications had to be adapted to the American AMPS system in the predetermined frequency ranges.
Author: Svenolof Karlsson & Anders Lugn