Ericsson began sales in Australia in 1890 through its agent C A Fahlstedt in Sydney. Initially, sales consisted exclusively of telephones and spare parts for telephones, not telephone stations. Telephone sales were very successful, however, and during the 1890s, Australia and New Zealand became one of Ericsson's largest markets outside Europe. In fact, in 1900, sales in Australia were greater than in Sweden.
In 1902, Ericsson's senior engineer Hemming Johansson, who would subsequently become president of the company, traveled to Australia and South Africa, which was also a major market. Johansson wanted to demonstrate the company's technical expertise and had brought with him a small switchboard with a central battery system.
Hemming Johansson later wrote about the visit as follows. "Through a stroke of luck, leading engineers from various telephones companies were attending a conference in Sydney during my visit. An offer to arrange a practical demonstration of the latest equipment and discuss technical matters with these gentlemen was readily accepted".
In conjunction with Johansson's trip, Fahlstedt was replaced in Sydney by the Scottish businessman James Paton. Ericsson also recruited agents in other parts of the country, and sales were now also expanded to include switches.
The Australian PTT, the Australian Post Office (APO), soon began replacing the manual switching system with the automatic Strowger system, which meant that other suppliers took over the market, even with respect to telephones.
Ericsson's telephones were renowned for their high quality, however, and sales continued to be sufficiently successful to enable James Paton to establish a sales company in the early 1920s that was named the Ericsson Telephone Manufacturing Company.
Nonetheless, Australia did not emerge as a major market until after James Paton's death in 1949. The new manager for the Australian market was an Australian named Les Rowe, who established a new Ericsson sales company called L M Ericsson Telephone Co. Pty Ltd (ETA) for the sale of switching systems. He faced a tough challenge, however. The APO had already signed an extensive multi-year contract with two British companies, STC and TEI, for delivery of telephone stations.
When expansion of the telephone network began in the years following World War II, however, the Strowger system was considered insufficient and outdated. Les Rowe thus saw his chance.
He presented a small demonstration version of the crossbar switch to the APO?s general director and followed up on his gift by submitting an offer. The general director, however, was not interested.
Rowe stubbornly continued his efforts to influence the APO and took every opportunity to praise the advantages of the crossbar system. When these efforts did not succeed, he donated a 60-line crossbar switch to the APO in 1963 for use in its laboratories.
The APO's engineers were extremely impressed by the crossbar switch and ordered an additional 60 lines to be added to the switch that Rowe had given them. Soon thereafter, two small orders were placed for crossbar switching systems. The APO was now seriously considering abandoning the Strowger system.
After analyzing switching systems all over the world, the APO finally made up its mind.
In the toughest possible competition, which included ITT and Siemens, Ericsson's crossbar system was chosen as the standard system for the Australian telephone network in 1959. Initially, it was manufactured under license by STC and TEI in Australia, but Ericsson believed that there was room for another manufacturer. In 1960, the company purchased Trimax Transformers Pty Ltd, which was renamed L M Ericsson Pty Ltd (EPA) in 1963.
After this acquisition, the company's production was converted to telecom equipment. Soon thereafter, a new production plant was built. When STC's and TEI's licenses expired in 1963, they were not renewed by APO. Instead, manufacturing was to be awarded according to a bidding procedure. This resulted in Ericsson capturing one third of the market for public telephone stations.
The great confidence that the APO placed in Ericsson as a supplier was evident in 1977, when Australia as one of the first countries purchased the AXE system. EPA played an important role in educating the APO about the AXE system's benefits, and the Australian subsidiary was accordingly awarded the contract to manufacture the system.
The next large Australian contract came in the mid-1980s, when a nationwide AMPS mobile telephone system was ordered. This was followed in the early 1990s by an order for a GSM network.
In fixed telephony, Ericsson still has a prominent position. In 1996, Ericsson Australia, as EPA is now called, received the Australian Quality Award. Australian operator Telstra's fixed network, which primarily consists of Ericsson equipment, was considered to be the world's best network, as measured by its stability.
Ericsson Australia not only conducts sales in Australia, but also exports to a large number of countries in the Asia Pacific region, including Sri Lanka, Vietnam, the Philippines, India, Japan, China, New Zealand, Indonesia, Malaysia and Taiwan.
Author: Mats Wickman
