Ericsson's development during the twentieth century cannot be understood without the company's long-standing, intimate cooperative relationship with its major Swedish customer, Televerket, the former Swedish PTT now known as TeliaSonera. Since the beginning of the century, the two organizations have conducted innumerable more or less formalized joint development projects, which lead to the establishment of a "development partnership" with joint "offspring" in the form of several successful products such as the 500-switch system, the Dialog phone and the AXE system. Similar partnerships involving large private-sector companies and their government customers have been significant in the development of Swedish energy, transport and military technology - such as ASEA/Vattenfall, ASEA/SJ and Bofors/FMV.
The development partnership consisted of joint projects of varying size and degree in basically all of Ericsson's product range, but was particularly essential for Ericsson's telephone switches. The relationship was built on cooperative projects of different dimensions and durations - from ordinary informal exchanges of information about common problems to in-depth negotiations about major shared research and development projects. Apart from concrete joint projects in product development, through its interaction with Televerket, Ericsson acquired early experience of system operation and reference installations, which would later prove valuable in the ongoing international commercialization of the Company's products.
The technological cooperation between Ericsson and Televerket was firmly rooted in the social interaction between the parties. The informal contact networks between the two organizations were particularly significant. The relationship was one of equals, with both parties taking the initiative and contributing ideas for new joint projects. Televerket had a large staff of highly skilled engineers and technicians, and was a very competent and demanding customer, placing high demands on Ericsson's designs. In this way, the administration contributed to Ericsson's product development - an example being the development of the 500 switching system. While this was a development project conducted mainly within Ericsson, the original idea and project initiative came from a telephone manager with Televerket, Axel Hultman, who himself played an active role in the realization of the innovation.
The development partnership has its beginnings in sporadic cooperation at the end of the nineteenth century, but acquired real significance in the years between 1910 and 1920 with the joint projects on crossbar and 500 selector switches. In the 1930s and the 1940s, agreements were established on R&D cooperation regarding new telephones and telecommunications research. The relationship was gradually formalized in the 1950s with the establishment of the jointly owned and operated Swedish telecommunications system and the formation of two joint councils to coordinate efforts in telecommunications research in 1953 and electronic switching technology in 1956.
In the 1960s, cooperation was characterized by efforts to intensify joint R&D on electronic and computerized switches, which lead to the institutionalizing of the development partnership in 1970, with the creation of Ellemtel. The main contribution of this joint company was the development of the AXE system in the 1970s. The company also lay behind the Diavox phone and a few smaller telephone switches. The partnership relationship was also key in Ericsson's successful debut in the area of mobile telephony with the NMT system in the 1980s.
Author: Mats Fridlund & Claes-Fredrik Helgesson