Ericsson had already established a presence in China in the early 1890s through the telephone sales of Gustaf Öberg in Shanghai. Orders increased after the turn of the century when Öberg became president of a telephone operating company in the city. In 1913, Ericsson supplied equipment for a telephone station in Guangzhou (Canton). A few years later, the company also hoped to win the telephone concession in the city, but World War I put a stop to these plans. Attempts were made again after the war but without success.
Many years would pass before Ericsson established operations in China. After the birth of the People's Republic of China in 1949 and until the death of Mao Zedong in 1976, the market was closed to Ericsson. In the late 1970s, however, the ruling Communist Party slowly began to open the enormous country to foreign companies.
At this time, Ericsson began sales of AXE stations to China. In 1985, the first representation office was opened in Beijing, and two years later, China signed what was its largest-ever telecom contract at the time for 200,000 lines of AXE.
But it was only in 1994, when Ericsson established its local company, Ericsson China Ltd, that things really took off. Just three years later, China was Ericsson's largest market with respect to order bookings.
Ericsson has several joint venture companies in China, including production companies, since the Chinese government demands local manufacturing. One important company is Nanjing Ericsson Communication Company Ltd., which was established with the electronics manufacturer Nanjing Panda Electronics. Nanjing Ericsson's accomplishments include the launch of an inexpensive mobile phone under the Panda brand that was specially developed for the Chinese market.
Ericsson has also invested heavily in research and training in China, which not only has its own benefits, but also provides a competitive advantage. In Shanghai, the Ericsson Communication Software Research and Development Center was established in 1997. In the same year, the Ericsson China Academy was founded in Beijing. Some 30 students are admitted each year for a two-year part-time program leading to a Master's Degree in business administration with a focus on infocom companies. Ericsson's training center in Beijing also offers shorter courses for Ericsson employees and customers.
Ericsson is assisting China in the transition from the existing digital mobile network to third-generation mobile systems. In 1999, Ericsson and the China Academy of Telecommunications Technology opened a research and development center for WCDMA technology. Together with the Beijing Institute of Technology, Ericsson has opened a research center for mobile communication.
Ericsson is particularly strong in mobile communications in China, with nearly half the market for mobile systems. With respect to fixed networks, the company's market share is about ten percent.
Author: Mats Wickman