Ericsson Radio Systems

Ericsson Radio Systems AB was a Swedish Ericsson subsidiary that became one of the group’s principal vehicles for developing and commercializing mobile communications during the 1980s and 1990s. It was established on 1 January 1983 when Ericsson acquired the remaining outside ownership of Svenska Radioaktiebolaget, commonly associated with the SRA name. The new entity operated as a wholly owned Ericsson company and combined several wireless businesses, including mobile telephony systems, mobile radio, pagers, microwave communications, and mobile terminals. At its formation, the company employed approximately 3,998 people and described its mission as the development of advanced wireless communications for civilian use. Mobile telephony quickly became its largest and most strategically important activity. The company supplied infrastructure for NMT, ETACS, and AMPS networks and later participated actively in the technical development and standardization environment surrounding GSM. Its systems business combined radio base stations with Ericsson’s AXE switching technology, helping the Ericsson group establish a strong position in international mobile-network infrastructure. Ericsson Radio Systems also developed and sold mobile telephones under the Hotline brand. Early products were large vehicle-oriented terminals, often weighing several kilograms and powered through a car’s electrical system. In 1986, roughly 10,000 such terminals were manufactured. The company’s handset and infrastructure activities were reorganized into separate business areas, with systems managed from Stockholm and terminal development concentrated in Lund. This specialization reflected the different engineering, manufacturing, and commercial requirements of network equipment and mobile phones. Research and development was reorganized in 1983 when Ericsson established the Ericsson Mobile Telephone Laboratory at Ideon Science Park in Lund. The move was intended to strengthen collaboration with Lund University’s Faculty of Engineering and consolidated mobile-phone research in Lund, while manufacturing continued at facilities in Gävle and Kumla. Ericsson also acquired Magnetic, a Swedish manufacturer of mobile-telephone base stations, during 1983. The company expanded internationally through a 1989 joint venture with General Electric, Ericsson GE Mobile Communications. Ericsson held 60 percent initially, while General Electric contributed American mobile-communications assets, including a factory in Lynchburg, Virginia. The venture also operated Ericsson’s handset manufacturing in Kumla and research activities in Lund. Cooperation problems and difficulty penetrating the United States mobile-phone market weakened the partnership. Ericsson increased its ownership to 80 percent in 1992, General Electric left the venture’s board in 1993, and the operation was renamed Ericsson Mobile Communications in 1994. Ericsson became the sole owner in 1998 after General Electric exercised a contractual sale right. By 1994, mobile telephony represented approximately 85 percent of the radio-systems business area’s activity and had become a core Ericsson business. Defence communications were transferred to another Ericsson entity, Ericsson Microwave Systems, as the group concentrated more heavily on commercial mobile communications. In 2002, Ericsson Radio Systems AB changed its name to Ericsson AB and absorbed 19 other Ericsson legal entities as part of a cost-reduction and simplification program. Although the legal entity retained its Swedish company registration number, the Ericsson Radio Systems name ceased to be the company’s operating name. Its principal activity thereafter was mobile-telecommunications infrastructure within Ericsson.

Ericsson Radio Systems AB was created on 1 January 1983 when Ericsson acquired all remaining outside interests in Svenska Radioaktiebolaget. The company became a wholly owned subsidiary within the Ericsson group and initially employed about 3,998 people. Its remit covered civilian wireless communications, including mobile telephony, professional mobile radio, paging, microwave communications, and mobile terminals. Mobile telephony became the company’s dominant activity. Its infrastructure business connected Ericsson’s AXE switching technology with radio base stations for NMT, ETACS, and AMPS networks. The company also worked on the emerging GSM standardization process. In parallel, it sold mobile phones under the Hotline name. Early terminals were primarily vehicle-mounted products, reflecting the size, weight, power requirements, and cost of mobile equipment in the 1980s. Ericsson reorganized mobile-phone research in 1983 by establishing the Ericsson Mobile Telephone Laboratory at Ideon Science Park in Lund. The move was designed to improve links with Lund University’s engineering faculty. Research formerly conducted in Gävle was consolidated in Lund, while factories in Gävle and Kumla continued manufacturing activities. During the same year, Ericsson acquired Magnetic, a Swedish maker of mobile-telephone base stations. In 1986, Nils Rydbeck became manager of mobile-telephone research and development in Lund and proposed a long-term product-development plan. The following restructuring divided the mobile-telephone business into systems and terminals. Systems, including base stations, were managed from Stockholm under Håkan Jansson and became the larger strategic operation. Terminals were managed from Lund under Flemming Örneholm. At the time, Ericsson reported manufacturing approximately 10,000 mobile terminals during 1986, with Motorola and Nokia’s Mobira business among the principal competitors. Ericsson Radio Systems changed leadership in 1988 when Lars Ramqvist replaced Åke Lundkvist as chief executive. Ericsson’s defence-communications business was also folded into the company during this period. On 1 July 1989, Ericsson and General Electric established Ericsson GE Mobile Communications, combining mobile-phone activities in Sweden and the United States. Ericsson held 60 percent and General Electric 40 percent. General Electric contributed a Lynchburg, Virginia, factory with approximately 1,600 employees, while the venture controlled Ericsson’s Kumla handset manufacturing and Lund research operations. The partnership faced substantial coordination problems and struggled to establish a strong position in the United States mobile-phone market. Ericsson acquired another 20 percent in 1992, General Electric withdrew from the venture’s board in 1993, and the business was renamed Ericsson Mobile Communications in 1994. General Electric eventually sold its remaining stake in 1998, making Ericsson the sole owner. During the 1990s, Ericsson increasingly treated mobile telephony as a core business. In 1994, mobile telephony represented roughly 85 percent of the radio-systems business area’s activity. Defence communications were transferred to Ericsson Microwave Systems, leaving mobile infrastructure and related communications products at the center of the business. In 2002, Ericsson Radio Systems AB changed its name to Ericsson AB and absorbed 19 other Ericsson legal entities. The consolidation was intended to reduce operating costs and simplify the group’s corporate structure. Although the Swedish legal entity retained its original company registration number, the Ericsson Radio Systems name no longer functioned as the company’s principal corporate name.

• 2002

  Legal entity renamed Ericsson AB

  [1]Ericsson Radio Systemsen.wikipedia.org

  The company absorbed 19 Ericsson entities and adopted the Ericsson AB name as part of a cost-reduction restructuring.

• 1998

  Ericsson takes full ownership of the former GE venture

  [1]Ericsson Radio Systemsen.wikipedia.org

  General Electric sold its remaining interest in the mobile-communications venture to Ericsson.

• 1994

  Mobile telephony becomes the dominant activity

  [1]Ericsson Radio Systemsen.wikipedia.org

  Mobile telephony accounted for approximately 85 percent of the radio-systems business area, while defence communications moved to Ericsson Microwave Systems.

• 1989

  Ericsson GE Mobile Communications established

  [1]Ericsson Radio Systemsen.wikipedia.org

  Ericsson and General Electric combined their Swedish and American mobile-phone activities in a majority-Ericsson joint venture.

• 1987

  Systems and terminals split into separate business areas

  [1]Ericsson Radio Systemsen.wikipedia.org

  Ericsson separated network systems from mobile terminals, with systems directed from Stockholm and terminal development centered in Lund.

• 1986

  Mobile-telephone research leadership reorganized

  [1]Ericsson Radio Systemsen.wikipedia.org

  Nils Rydbeck took responsibility for mobile-telephone research and development in Lund and developed a long-term handset plan.

• 1983

  Ericsson Radio Systems AB formed

  [1]Ericsson Radio Systemsen.wikipedia.org

  Ericsson completed the acquisition of the former outside owners of Svenska Radioaktiebolaget, creating Ericsson Radio Systems as a wholly owned subsidiary.

• 1983

  Mobile Telephone Laboratory opened in Lund

  [1]Ericsson Radio Systemsen.wikipedia.org

  Mobile-phone research and development was consolidated at a new laboratory at Ideon Science Park in Lund.

• 1983

  Magnetic acquired

  [1]Ericsson Radio Systemsen.wikipedia.org

  Ericsson acquired Magnetic, a Swedish manufacturer of mobile-telephone base stations.

A Swedish engineering and telecommunications business positioned around advanced wireless communications, with particular strength in mobile-network infrastructure and an emerging handset business. During the late 1980s and 1990s, its strategic importance increasingly came from carrier systems rather than consumer mobile phones.

• Telecommunications infrastructure · 1983

  Mobile network systems

  The company’s principal business comprised mobile-network systems combining radio base stations and switching technology. Ericsson adapted its AXE platform for NMT, ETACS, and AMPS networks and participated in the development environment for GSM. These systems formed the foundation of Ericsson’s international carrier-equipment position and ultimately became more important than the company’s handset business.

• Mobile phones

  Hotline mobile telephones

  Hotline was the brand used for Ericsson’s mobile-phone range during the company’s development from vehicle-mounted radiotelephones toward broader cellular handsets. Early products were large terminals installed in cars and powered from the vehicle. The terminal business was centered in Lund for research and in Kumla for manufacturing, and competed with offerings from Motorola and Mobira.

• Two-way radio · 1983

  Professional mobile-radio systems

  Ericsson Radio Systems supplied specialized radio systems for professional and public-service users, including police communications and radiotelephones used by taxi operators. This business represented a substantial part of activity in 1983 but became stagnant by the middle of the decade as mobile telephony expanded.

• Wireless communications · 1983

  Pagers and mobile data systems

  The company operated a paging business, including cooperation with Ericsson’s Dutch subsidiary NIRA, and also maintained a smaller mobile-data activity. Paging remained a measurable business area in the late 1980s, while mobile data represented a much smaller share of activity.

• Transmission equipment · 1983

  Microwave and radiotransmission systems

  Ericsson Radio Systems initially handled microwave communications, including work connected with the government-backed Tele-X project. The activity was renamed Radiotransmission in 1984 and transferred to Ericsson’s defence-products business unit at the end of 1985.

• 2002

  Simplify the Ericsson legal structureStrategy

  Background

  Ericsson aimed to reduce operating costs and consolidate multiple legal entities within its corporate structure.

  Action taken

  Ericsson Radio Systems AB changed its name to Ericsson AB and absorbed 19 other Ericsson entities while retaining its Swedish company registration number.

  Aftermath

  The Ericsson Radio Systems name ceased to be the company’s operating name, although the underlying legal entity continued as Ericsson AB with mobile infrastructure as its main activity.

  Source

• 1989

  Form Ericsson GE Mobile CommunicationsM&A

  Background

  Ericsson and General Electric sought to combine mobile-phone activities in Sweden and the United States and improve their international reach.

  Action taken

  The companies created a joint venture in which Ericsson held 60 percent and General Electric held 40 percent.

  Aftermath

  The venture encountered cooperation problems and struggled to establish a strong position in the United States. Ericsson progressively increased its ownership and ultimately became sole owner in 1998.

  Source

• 1987

  Separate mobile systems from terminalsStrategy

  Background

  Network infrastructure and handset development required different engineering, manufacturing, and commercial approaches.

  Action taken

  Ericsson reorganized the mobile-telephone business into separate systems and terminal areas, managed principally from Stockholm and Lund respectively.

  Aftermath

  The structure emphasized network infrastructure as the larger business while maintaining a dedicated handset-development organization.

  Source

• 1983

  Consolidate mobile-phone research in LundStrategy

  Background

  Ericsson sought closer cooperation between mobile-telephone research and Lund University’s engineering faculty and wanted a more concentrated development organization.

  Action taken

  It established the Ericsson Mobile Telephone Laboratory at Ideon Science Park and transferred mobile-phone research and development from Gävle to Lund.

  Aftermath

  The move made Lund the principal research center for Ericsson mobile phones, while manufacturing remained in Gävle and Kumla.

  Source

1. 1Ericsson Radio Systemsen.wikipedia.org