In the dual monarchy of Austria-Hungary, Ericsson, together with local banks, became the owner of two telephone plants, one in Vienna and one in Budapest, in the early 1910s. In both cases, existing operations were taken over. The company that operated the Hungarian plant was named Ericsson Ungarishe Elektrizitäts Aktiegesellschaft.
Like the one in Vienna, the plant in Budapest was completely inadequate for the operations that Ericsson intended. Construction of a new plant was therefore started in 1913. When it was completed the following year, World War I had started, and the Hungarian Ericsson company was forced to turn the plant over to the state for use as a military hospital.
Despite this disruption, the Hungarian company continued to report excellent profits throughout the entire decade, in large part due to an increase in the manufacture of other products than telephone equipment during the war.
When peace was reached and the dual monarchy dissolved, the two Ericsson companies continued operations in their respective countries of Austria and Hungary.
The plant in Budapest continued to report a profit during the 1920s, since the Hungarian PTT placed half of its orders for telephone equipment with Ericsson. The company expected major orders for automatic systems during the 1930s, but the depression dashed these hopes. Instead, Ericsson experienced several lean years in Hungary before the local company was sold in 1937 to the ITT subsidiary Standard Electric.
Slightly more than 30 years later, Ericsson returned to Hungary in what was its first entry into the communist East Block. In January 1968, the company succeeded in securing a large order from Hungary for switching and transmission equipment that included both financing and counter-purchases.
Hungary was also the first former communist country in Eastern Europe in which Ericsson became a part owner in a production company. In 1991, Ericsson Technika KFT was established and soon received orders for AXE stations from telecom operators in the Hungarian market.
Author: Mats Wickman
Report on talks the board held with Deckert & Homolka on the subject of acquiring their plants in Vienna and Budapest.