Ericsson

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"LM Ericsson" redirects here. For the founder of the company, see Lars Magnus Ericsson.
For other uses, see Ericsson (disambiguation).
Telefonaktiebolaget L. M. Ericsson
Type Publicly traded Aktiebolag
Traded as OMXERIC-A
OMXERIC-B
NASDAQERIC
Industry Telecommunications equipment
Founded Stockholm, Sweden (1876)
Founder(s) Lars Magnus Ericsson
Headquarters Kista, Stockholm, Sweden
Area served Worldwide
Key people Leif Johansson
(Chairman)
Hans Vestberg
(President and CEO)
Products Mobile and fixed broadband networks, consultancy and managed services, multimedia technology
Revenue SEK 227.8 billion (2012)[1]
Operating income SEK 10.45 billion (2012)[1]
Profit SEK 5.9 billion (2012)[1]
Total assets SEK 274.9 billion (2012)[1]
Total equity SEK 136.8 billion (2012)[1]
Employees 113,989 (September 2013)[2]
Parent Investor AB (5.0%)
Subsidiaries ST-Ericsson (100%)
Ericsson-LG (75%)
Website Ericsson.com

Ericsson (Telefonaktiebolaget L. M. Ericsson) is a Swedish multinational provider of communications technology and services. The offering comprises services, software and infrastructure within Information and Communications Technology (ICT) for telecom operators and other industries, including telecommunications and IP networking equipment, mobile and fixed broadband, operations and business support solutions, cable TV, IPTV, video systems, and an extensive services operation. Ericsson is the world leader in the 2G/3G/4G mobile network infrastructure market (35% in 2012).[3]

Ericsson is one of the strongest holder of essential patents in the wireless industry and have approximately 35,000 granted patents in 2012.[4] Ericsson complies with terms that are fair, reasonable and non-discriminatory (FRAND) for its patent licensing programs and is a net receiver of licensing royalties.

Founded in 1876 by Lars Magnus Ericsson,[5] the company is today headquartered in Stockholm, Sweden. The company employs more than 110,000 people and work with customers in more than 180 countries, including the US, China, India, Brazil, Japan, South Africa, Australia, Germany, Italy, the UK, and Sweden.

History[edit]

Foundation[edit]

Lars Magnus Ericsson

Lars Magnus Ericsson began his association with telephones in his youth as an instrument maker. He worked for a firm which made telegraph equipment for the Swedish government agency Telegrafverket. In 1876, at the age of 30, he started a telegraph repair shop with help from his friend Carl Johan Andersson. The shop was in central Stockholm (No. 15 on Drottninggatan, the principal shopping street) and repaired foreign-made telephones. In 1878 Ericsson began making and selling his own telephone equipment. His phones were not technically innovative, as most of the inventions had already been made in the United States. In 1878 he made an agreement to supply telephones and switchboards to Sweden's first telecom operating company, Stockholms Allmänna Telefonaktiebolag.

Also in 1878, local telephone importer Numa Peterson hired Ericsson to adjust some telephones from the Bell Telephone Company. This inspired him to buy a number of Siemens telephones and analyze the technology further. (Ericsson had a scholarship at Siemens a few years earlier.) Through his firm's repair work for Telegrafverket and Swedish Railways, he was familiar with Bell and Siemens Halske telephones. He improved these designs to produce a higher-quality instrument. These were used by new telephone companies, such as Rikstelefon, to provide cheaper service than the Bell Group. He had no patent or royalty problems, as Bell had not patented their inventions in Scandinavia. His training as an instrument maker was reflected in the standard of finish and the ornate design of Ericsson phones of this period. At the end of the year he started to manufacture telephones of his own, much in the image of the Siemens telephones, and the first product was finished in 1879.

Ericsson became a major supplier of telephone equipment to Scandinavia. Because its factory could not keep up with demand, work such as joinery and metal-plating was contracted out. Much of its raw materials were imported, so in the following decades Ericsson bought into a number of firms to ensure supplies of essentials like brass, wire, ebonite, and magnet steel. Much of the walnut used for cabinets was imported from the United States.

As Stockholm's telephone network expanded that year, the company reformed into a telephone manufacturing company. But when Bell bought the biggest telephone network in Stockholm, it only allowed its own telephones to be used with it. So Ericsson's equipment sold mainly to free telephone associations in the Swedish countryside and in the other Nordic countries.

The prices of Bell equipment and services led Henrik Tore Cedergren to form an independent telephone company in 1883 called Stockholms Allmänna Telefonaktiebolag. As Bell would not deliver equipment to competitors, he formed a pact with Ericsson, which was to supply the equipment for his new telephone network. In 1918 the companies were merged into Allmänna Telefonaktiebolaget LM Ericsson.

In 1884, a multiple-switchboard manual telephone exchange was more or less copied from a design by C. E. Scribner at Western Electric. This was legal, as the device was not patented in Sweden, although in the United States it had held patent 529421 since 1879. A single switchboard could handle up to 10,000 lines. The following year, LM Ericsson and Cedergren toured the United States, visiting several telephone exchange stations to gather "inspiration". They found that U.S. engineers were well ahead in switchboard design but Ericsson telephones were as good as any available.

In 1884, a technician named Anton Avén at Stockholms Allmänna Telefonaktiebolag had combined the earpiece and the mouthpiece of a (by then) standard telephone into a handset. It was used by operators in the exchanges that needed to have one hand free when talking to their customers. Ericsson picked up this invention and incorporated it into Ericsson products, beginning with a telephone named The Dachshund.

International expansion[edit]

As production grew in the late 1890s, and the Swedish market seemed to be reaching saturation, Ericsson was able to expand into foreign markets through a number of agents. Britain and Russia were early markets. This eventually led to the establishment of factories in these countries. This was partly to improve chances of gaining local contracts, and partly because the Swedish factory could not keep up supply. In Britain, the National Telephone Company had been supplied with Ericsson equipment for some time and was a major customer. By 1897, Britain was accounting for 28% of Ericsson's sales. Other Nordic countries had become Ericsson customers as well, spurred by the growth of telephone services in Sweden.

Other countries and colonies were exposed to Ericsson products through the influence of their parent countries. These included Australia and New Zealand, which by the late 1890s were Ericsson's largest non-European market. With mass production techniques now firmly established, the phones were losing some of their ornate finish and decoration.

Despite their successes elsewhere, Ericsson did not make significant sales into the United States. The Bell Group and local companies like Kellogg and Automatic Electric had this market tied up. Ericsson eventually sold its U.S. assets. Sales in Mexico led to further development into South American countries. South Africa and China were also generating significant sales. With his company now multinational, Lars Ericsson stepped down from the company in 1901.

Automatic equipment[edit]

LM Ericsson's former headquarters at Telefonplan in Stockholm, see LM Ericsson building.

Ericsson ignored the growth of automatic telephony in the United States. Instead it concentrated on squeezing the most sales out of manual exchange designs. Their first dial phone was produced in 1921, although sales of the early automatic switching systems were slow until the equipment had proved itself on the world's markets. Phones of this period were characterized by a simpler design and finish, and many of the early automatic desk phones in Ericsson's catalogues were simply the proven magneto styles with a dial stuck on the front and appropriate changes to the electronics. A concession to style was in the elaborate decals (transfers) that decorated the cases.

World War I, the subsequent Great Depression, and the loss of its Russian assets after the Revolution slowed the company's development and restricted its sales to countries such as Australia.

Shareholding changes[edit]

The purchase of other related companies put pressure on Ericsson's finances, and in 1925, Karl Fredric Wincrantz took control of the company by acquiring the majority of the shares. Wincrantz was partly funded by Ivar Kreuger, an international financier. The company was renamed Telefon AB LM Ericsson. At this time, Kreuger started showing interest in the company, being a major owner of Wincrantz holding companies.

In 1928, Ericsson began issuing "A" and "B" shares, where an "A" share has 1000 votes against a "B" share. Wincrantz controlled the company by having only a few "A" shares, not a majority of the shares. By issuing a lot of "B" shares, much more money was fed to the company, while maintaining the status quo of power distribution.

In 1930, a second issue of "B"-shares took place, and Kreuger gained majority control of the company with a mixture of "A" and "B" shares. He bought these shares with money lent by LM Ericsson, with security given in German state bonds. He then took a loan for his own company Kreuger & Toll from ITT Corporation (administered by Sosthenes Behn), giving parts of LM Ericsson as security, and used its assets and name in a series of international financial dealings that had little to do with telephony.

Ericsson was now being seen as a take over target by ITT, its main international competitor. In 1931 ITT acquired from Kreuger enough shares to have a majority interest in Ericsson. This news was not made public for some time. There was a government imposed limit on foreign shareholdings in Swedish companies, so for the time being the shares were still listed in Kreuger's name. Kreuger in return was to gain shares in ITT. He stood to make a profit of $11 million on the deal. When ITT's Behn wanted to cancel this deal in 1932, he discovered that there was no money left in the company, just a large claim on the same Kreuger & Toll that Kreuger had himself lent money to. Kreuger had effectively bought LM Ericsson with its own money.

Kreuger had been using the company as security for loans, and despite his profits, was unable to repay these loans. Ericsson found that they had invested in some very doubtful share deals, whose losses were deemed significant. ITT examined the deal and found that it had been seriously misled about Ericsson's value. ITT asked Kreuger to come to New York City for a conference, but Kreuger did not attend. As word of Kreuger's financial position spread, pressure was put on him by the banking institutions to provide security for his loans. ITT canceled the deal to buy Ericsson shares. Kreuger could not repay the $11 million, and committed suicide in Paris in 1932. ITT owned one third of Ericsson, but was forbidden to exercise this ownership because of a paragraph in the company's articles of association stating that no foreign investor was allowed to control more than 20% of the votes.

Wallenberg era begins[edit]

Ericsson was saved from bankruptcy and closure with the help of banks and some government backing. Marcus Wallenberg Jr negotiated a deal with several Swedish banks to rebuild Ericsson financially. Some of those were Stockholms Enskilda Bank (which later became the current Skandinaviska Enskilda Banken) and other Swedish investment banks controlled by the Wallenberg family. The banks gradually increased their possession of LM Ericsson "A" shares, with ITT still being the single largest shareholder. In 1960, the Wallenberg family struck a deal with ITT to buy its shares in Ericsson, and has since controlled the company.

Market development[edit]

The Ericsson DBH15 telephone. Introduced in 1931 as model DBH 1001 and redesigned in 1947. The original design is attributed to Jean Heiberg, redesigned by Gerard Kiljan

In the 1920s and 1930s, the world telephone markets were being organized and stabilized by many governments. The fragmented town-by-town systems which had grown up over the years, serviced by many small private companies, were integrated and offered for lease to a single company. Ericsson managed to obtain some leases, which represented further sales of equipment to the growing networks. The other large telephone companies, of course, had exactly the same goal.

Ericsson DBH 1001 1939
Ericsson DBH 1001 1939

Ericsson managed to get almost one third of its sales under the control of its telephone operating companies.

Negotiations between the major telephone companies aimed at dividing up the world between them, but the size of ITT made it hard to compete with. Ericsson reduced its involvement in telephone operating companies and went back to manufacturing telephones and switchgear. The Beeston factory in Britain had been a joint venture between Ericsson and the National Telephone Company. The factory built automatic switching equipment for the BPO under license from Strowger, and exported products to former colonies like South Africa and Australia. The British government divided its equipment contracts between competing manufacturers, but Ericsson's presence and manufacturing facilities in Britain allowed it to get most of the contracts.

Sales drives resumed after the Great Depression, but the company never achieved the market penetration that it had at the turn of the century. Although it still produced a range of phones, switching equipment was becoming a more important part of its range. The distinctive Ericsson styles soon became subdued by the increasing use of Bakelite telephones starting in the 1930.

Following the advent of football shirt sponsorship during the 1980s, Ericsson sponsored two English football clubs during the 1990s – Brentford and Queen's Park Rangers.

Further development[edit]

Ericsson introduced the world's first fully automatic mobile telephone system, MTA in 1956.[6] It released one of the world's first handsfree speaker phones in the 1960s. In 1954, it released the Ericofon. Ericsson crossbar switching equipment was used in telephone administrations in many countries, and its influence is still felt in such areas as mobile phones.

1995-2003 Emergence of the internet[edit]

The emergence of the internet in the 1990s heralded a new world for telecommunications. Ericsson was seen by some as being slow to realize the potential of the internet and falling behind in the area of IP technology.[7] But the company had established a project starting in 1995 to chart its path into the internet age, and formed its Infocom Systems business unit to pursue opportunities at the junction of fixed-line telecom and IT. CEO Lars Ramqvist wrote in the 1996 annual report that in all three of its business areas – Mobile Telephones and Terminals, Mobile Systems, and Infocom Systems – “we will expand our operations as they relate to customer service and Internet Protocol (IP) access (internet and intranet access).”[8]

The continuing growth of GSM, which was becoming a de facto world standard, combined with Ericsson’s strength in other mobile standards, such as D-AMPS and PDC, meant that by the start of 1997, Ericsson had an estimated 40 percent share of the world’s mobile market, with around 54 million subscribers. On top of that, there were around 188 million AXE lines in place or on order in 117 countries.[8]

Telecom and chip companies worked frantically in the 1990s to provide internet access over mobile telephones. Early versions such as WAP (Wireless Application Protocol) used packet data over the existing GSM network, in a form known as GPRS (General Packet Radio Service), but these services, known as 2.5G, were fairly rudimentary and did not achieve much mass-market success.

The International Telecommunication Union (ITU) had prepared the specifications for a 3G mobile service that included several different technologies. Ericsson pushed hard for the WCDMA (wideband CDMA) form, based on the GSM standard, and began testing the technology in 1996. Japanese operator NTT DOCOMO signed deals to partner with Ericsson and Nokia, who joined forces in 1997 to support WCDMA over rival standards. DOCOMO would eventually become the first operator with a live 3G network, using its own version of WCDMA, called FOMA. But while Ericsson championed the development of the WCDMA version of GSM, rival American chip developer Qualcomm pursued and promoted alternatives known as cdma2000, building on the popularity of CDMA in the US market. A vicious patent battle was eventually resolved in March 1999[9] when the two bitter rivals agreed to pay each other royalties for use of their respective technologies, and Ericsson purchased Qualcomm’s wireless infrastructure business and some R&D resources.[10]

Once the Qualcomm conflict was settled, Ericsson continued to ride the wave of interest in mobile internet. It announced a partnership with Microsoft to combine the software giant’s web browser and server software with Ericsson’s mobile internet technologies,[11] but the subsequent joint venture was dissolved in 2001 in the fallout from the internet and telecom crashes.

Ericsson, like all other companies in the field, got caught up in the frenzy of the IT/telecoms bubble in the late 1990s. The company’s market value increased by an order of magnitude, with the share price peaking at SEK 825 in March 2000, up from a low of SEK 20 at the start of the 1990s.[12]

Lars Ramqvist stepped down as CEO in January 1998, going on to become chairperson of the board. Sven-Christer Nilsson took over as CEO in early 1998, and led the company in a much clearer IP direction, with acquisitions including a significant share in US router company Juniper.[13]

As well as networks, Ericsson had become a leading player in the production of mobile phones, sharing top place with Nokia and Motorola during 1997.[14]

Services were also becoming increasingly important. Ericsson had offered network rollout services for many years, and had even operated networks, but at the end of the 1990s, the services operations were amalgamated for the first time into a services unit.

In June 1999, Kurt Hellström, the head of Ericsson’s mobile division, replaced Nilsson as CEO. Worldwide hype around the potential of the internet – and for Ericsson in particular, the mobile internet – had inflated industry expectations. Operators in many major countries, such as the US, the UK and Germany, used much of their capital bidding for 3G licenses, and could not afford the new networks required to use the spectrum they had spent so much money acquiring. The order intake that Ericsson and other telecom vendors had expected, and invested in preparing for, was devastatingly disappointing, causing wave after wave of job losses and consolidations across the industry.

Ericsson issued a profit warning in March 2001. Over the coming year, sales to operators would fall by around half.[15]

Mobile phones, once seen as a promising business area, became a burden, with the phones unit making a loss of SEK 24 million in 2000. A fire in a Philips chip factory in New Mexico in March 2000 caused severe disruption to Ericsson’s phone production,[16] dealing a coup de grâce to Ericsson’s mobile phone hopes. Mobile phones would be spun off into a joint venture with Sony, Sony Ericsson Mobile Communications, in October 2001.[17]

Ericsson launched several rounds of restructuring and refinancing. Job losses were enormous: during 2001, staff numbers fell from 107,000 to 85,000.[18] A further 20,000 went the next year,[19] and 11,000 more in 2003.[20] A new rights issue raised SEK 30 billion to keep the company afloat.

The company had come back from the brink, just as mobile internet really started picking up speed. And with record profits, it was in better shape than many of its competitors.[21]

2003-2010 Rebuilding and growing[edit]

The emergence of the truly mobile internet in the wake of the IT and telecoms crashes kicked off an extraordinary period of growth for the global telecom industry and Ericsson in particular. After the launch of 3G services during 2003,[22][23] people were starting to access the internet using their phones, and liking it.

Ericsson’s position as a supplier of GSM equipment to many major operators, and its role as a pioneer in the emerging 3G standards and associated technology, placed it at the forefront of many of the changes to come. And the cutbacks that followed 10 consecutive quarters of losses meant that a slimmed-down Ericsson could return to profit in Q3 2003, and begin to grow again. After announcing in 2003 that it had turned the corner, new CEO Carl-Henric Svanberg said the company was to concentrate on operational excellence, a wide-ranging push for efficiency and better return on investment that was to dominate Ericsson’s corporate culture for several years.

Among the cutbacks, Ericsson had pared down its CDMA organization. This standard, used largely in North America, Japan and mainland Asia, was a rival to GSM, and Ericsson had a global market share of 25%, but the overall volumes were too low, so Ericsson wound down its CDMA commitment, ending it completely by 2006.

With a healthier balance sheet, Ericsson was able to start a series of acquisitions to strengthen its position in key technologies and market segments. The first of these was Marconi, a company which dated back to the dawn of radio, which brought assets including a strong portfolio in transmission, fiber optic and fixed network solutions. Further acquisitions included Redback Networks (carrier edge-routers), Entrisphere (fiber) and LHS (customer care solutions) in 2007, and Tandberg Television in 2008. It sold its enterprise PBX division to Aastra Technologies that same year. Ericsson reentered the CDMA market after acquiring North American vendor Nortel’s CDMA operations and assets in 2009.

The acquisitions followed Ericsson’s general strategy of expanding into next-generation network technologies and multimedia, a combined offering that would become even more important as video became the dominant form of data traffic on mobile broadband networks. Ericsson created a division to develop its multimedia business in early 2007.

Even as operators were buying and rolling out WCDMA, the first generation of 3G access, Ericsson was working on ways to improve it. New advances included IMS (IP Multimedia Subsystem) and the next evolution of WCDMA, called High-Speed Packet Access (HSPA). Initially deployed in the download version called HSDPA, the technology spread dramatically from the first test calls in the US in late 2005[24] to 59 commercial networks in September 2006.[25] HSPA would provide the world’s first real taste of mobile broadband.

Acquisitions, expansion, consolidation and cooperation[edit]

Around the start of the 21st century, companies and governments began to push for standards for the emerging mobile internet. In May 2000, the European Commission created the Wireless Strategic Initiative,[26] a consortium of four telecommunications suppliers in Europe – Ericsson, Nokia, Alcatel (France), and Siemens AG (Germany) – to develop and test new prototypes for advanced wireless communications systems. Later that year, the consortium partners invited other companies to join them in a Wireless World Research Forum in 2001.

In 2000, the bursting of the information technology bubble with marked economic implications for Sweden. Ericsson, the world's largest producer of mobile telecommunications equipment, shed thousands of jobs, as did the country's once fast-expanding Internet consulting firms and dot-com start-ups. In the same year, Intel, the world's largest semiconductor chip manufacturer, signed a $1.5 billion deal to supply flash memory to Ericsson over the next three years.[27]

In December 1999 Microsoft and Ericsson announced[28] a strategic partnership to combine the former's web browser and server software with the latter's mobile-internet technologies. A short-lived joint venture called Ericsson Microsoft Mobile Venture AB, owned 70/30 percent by Ericsson and Microsoft, respectively, ended in October 2001 when Ericsson announced[29] that it would absorb the former joint venture and adopt a licensing agreement with Microsoft instead.

That same month, Ericsson announced the launch of Sony Ericsson, a joint venture mobile-phone business, together with Sony Corporation.[30] Sony Ericsson remained in operation until February 2012, when Sony bought out Ericsson's share, Ericsson stating that it wanted to focus on the global wireless market as a whole.[31][32]

Lower stock prices and job losses affected many telecommunications companies in 2001. The major equipment manufacturers – Motorola (U.S.), Lucent Technologies (U.S.), Cisco Systems (U.S.), Marconi (UK), Siemens AG (Germany), Nokia (Finland), as well as Ericsson – all announced job cuts both in their home countries and in subsidiaries around the world. The number of jobs at Ericsson worldwide fell during 2001 from 107,000 to 85,000.[33]

In September 2001 Ericsson purchased the remaining shares in EHPT from Hewlett Packard. Founded in 1993 Ericsson Hewlett Packard Telecom EHPT was a Joint Venture made up of 60% Ericsson interests and 40% Hewlett-Packard interests.

The pain continued into 2002. Investor losses topped $2 trillion and share prices fell by 95% until August that year. More than half a million people lost their jobs in the global telecom industry over the two years.[34] The collapse of U.S. carrier WorldCom, with more than $107 billion in assets, was the biggest in U.S. history.[35] The sector's problems brought bankruptcies and job losses, and led to changes in the leadership of a number of major companies. Ericsson made 20,000 more staff redundant and raise about $3 billion from its shareholders.[36]

In June 2002, Infineon Technologies AG (then the sixth-largest semiconductor supplier and a subsidiary of Siemens AG) bought Ericsson’s microelectronics unit for $400 million.[37]

Co-operation with Hewlett-Packard did not end with EHPT and in 2003 Ericsson outsourced its IT to HP, which included Managed Services, Help Desk Support, Data Center Operations, and HP Utility Data Center. The contract was extended in 2008.[38] There have also been a number of joint Ericsson/HP Telecoms outsourcing deals with telecoms operators including H3G and Vodafone.

In October 2005, Ericsson acquired the bulk[39] of the troubled British telecommunications manufacturer, the Marconi Company, including its brand name, which dates back to the creation of the original Marconi Company by the "father of radio" Guglielmo Marconi. In September 2006, Ericsson sold the greater part of its defense business Ericsson Microwave Systems, which mainly produced sensor and radar systems, to Saab AB, which renamed the company to Saab Microwave Systems.[40] The sale meant that Saab Ericsson Space, previously a joint venture, was now fully owned by Saab. Not included in the sale to Saab was the National Security & Public Safety division, which was transferred to Ericsson with the sale.

In 2007, Ericsson acquired carrier edge-router maker[41] Redback Networks, and then Entrisphere, a US-based company providing fiber-access technology. In September 2007, Ericsson acquired an 84% interest in German customer-care and billing software firm LHS, a stake later raised to 100%.[42]

In 2008, Ericsson sold its enterprise PBX division[43] to Aastra Technologies, and acquired Tandberg Television, the television technology division[44] of Norwegian company Tandberg.

In 2009, Ericsson bought the CDMA2000 and LTE business[45] of Nortel’s carrier networks division for USD 1.18 billion; Bizitek, a Turkish business support systems integrator; the Estonian manufacturing operations of electronic manufacturing company Elcoteq; and completed its acquisition of LHS.[46]

Acquisitions in 2010 included assets from the Strategy and Technology Group of inCode,[47] a North American business and consulting-services company; Nortel’s majority shareholding (50% plus one share) in LG-Nortel, a joint venture between LG Electronics and Nortel Networks providing sales, R&D and industrial capacity in South Korea, now known as Ericsson-LG; further Nortel carrier-division assets, relating from Nortel’s GSM business in the United States and Canada; Optimi Corporation, a U.S.–Spanish telecommunications vendor specializing in network optimization and management;[48] and Pride, a consulting and systems-integration company operating in Italy.

In 2011, Ericsson acquired manufacturing and research facilities and staff from the Guangdong Nortel Telecommunication Equipment Company (GDNT)[49] as well as Nortel’s Multiservice Switch business.[50]

It also formed a strategic alliance with Akamai Technologies to develop and market mobile cloud acceleration services.

Ericsson acquired U.S. company Telcordia Technologies in January 2012,[51] operations and business support systems (OSS/BSS) company.[52] In March, Ericsson announced that it was buying the broadcast-services division of Technicolor, a media broadcast technology company.

On May 3, 2013, Ericsson announced it would divest its power cable operations to Danish company NKT.[53]

On July 1, 2013, Ericsson announced it would acquire the media management company Red Bee Media, subject to regulatory approval.[54] The acquisition was completed on May 9, 2014.[55]

In September 2013, Ericsson completed its acquisition of Microsoft's Mediaroom business and televisions solution, originally announced in April the same year. The acquisition makes Ericsson the largest provider of IPTV and multi-screen solution in the world, by market share. Ericsson Mediaroom.[56]

Corporate governance[edit]

Current members of the board of directors of LM Ericsson are: Leif Johansson, Jacob Wallenberg, Sverker Martin-Löf, Roxanne S. Austin, Sir Peter L. Bonfield, Börje Ekholm, Ulf J. Johansson, Anders Nyrén, Hans Vestberg, Nora Denzel, Kristin Skogen Lund, Alexander Izosimov, Pehr Claesson, Kristina Davidsson, Karin Åberg, Karin Lennartsson, Rickard Fredriksson, and Roger Svensson.[57]

Research and development[edit]

Ericsson has structured its R&D in three different levels depending on when products or technologies will be introduced to customers and users.[58]

Ericsson’s research and development organization is part of Group Function Technology and focuses on nine research areas: wireless access networks; radio access technologies; broadband technologies; packet technologies; multimedia technologies; services and software; EMF safety and sustainability; security and global services.[59] These areas cover different parts of the entire network architecture.

Group Function Technology holds research co-operations with several major universities and research institutes all over the world including: Lund University in Sweden, EötvösLoránd University in Hungary and Beijing Institute of Technology in China.[60] Ericsson also holds research co-operations within several European research programs such as GigaWam and OASE.[61] Ericsson holds in total 33,000 granted patents, and is the number 1 holder of GSM/GPRS/EDGE, WCDMA/HSPA, and LTE essential patents.[62]

Products and services[edit]

Ericsson’s business extends from technology research,[63] network[64] and software[65] development, all the way through to running and evolving operations.[66] Ericsson offers end-to-end solutions for all major mobile communication standards,[67] and has four main business units:[68]

  • Business Unit Networks (BNET) develops network infrastructure for any communication need over mobile and fixed connections.[68] As of July 1, 2014, BNET has been divided into two new units: Business Unit Radio and Business Unit Cloud & IP.[69]
  • Business Unit Global Services (BUGS) provides telecoms-related managed services, including, for example, taking responsibility for running an operator’s network and the related business support systems.
  • Business Unit Support Solutions (BUSS) develops and delivers software-based solutions for operations support systems/business support systems (OSS/BSS), real-time, multi-screen and on demand TV and media as well as solutions and services for the emerging mobile commerce (m-commerce) eco-system.[70]
  • Business Unit Modems focuses on the design, development, supply and sales of LTE multimode thin modem solutions, as well as 2G, 3G and 4G Long Term Evolution (LTE) interoperability.[71]

Operations at a local level are coordinated through a structure of ten regions , with some global and multi-country accounts for large customers .

[72]

Business Unit Networks[edit]

Business Unit Networks focuses on developing mobile and fixed network infrastructure.

Network infrastructure provides the basic tools people need to communicate.[73] Ericsson predicts that some 50 Billion devices will be connected by 2020.[74]

Ericsson’s product portfolio and expertise helps operators meet their mobile and fixed network evolution needs.[75]

Increasingly, mobile data traffic and internet usage create demand for high-performing and cost-efficient networks.[76] Around half of the world’s operators choose Ericsson to supply commercial mobile broadband networks,[77] making BNET one of the world’s biggest suppliers.

Its systems offerings include radio base stations and radio network controllers, mobile switching centers and service application nodes. Operators use Ericsson solutions to migrate from 2G to 3G and, most recently, to 4G networks.[78] The company’s network division is a driver in the development of 2G, 3G, 4G/LTE technology, future 5G and the evolution towards all-IP.[79] While Ericsson continues to develop and deploy advanced LTE systems[80] it also continues to develop solutions for GSM,[81] which still provide voice and data services for billions of people.[82] These solutions include WCDMA, which brought mass mobile broadband to the world, and CDMA which provides cost-effective mobile-data connections.[83] In addition to mobile networks, the company’s networks portfolio also includes core networks, microwave transport, Internet Protocol (IP) networks and fixed-access solutions for copper and fiber. The unit also develops mobile broadband modules which are used to connect a growing range of devices, systems and vehicles to the internet.

Business Unit Networks has been headed by Johan Wibergh since 2008.

Ericsson provides mobile telecommunications systems that incorporate the following technology standards:

  • 2G – Global System for Mobile Communications (GSM), time division multiple access (TDMA), code division multiple access (CDMA)
  • 2.5G – the common name for General Packet Radio Service (GPRS)
  • 3G – Enhanced Data Rates for GSM Evolution (EDGE), wideband code division multiple access (WCDMA), High-Speed Downlink Packet Access (HSDPA), Evolved HSPA (HSPA+, Internet-HSPA or I-HSPA), Evcode division multiple access (third generation cellular/radio technology) (CDMA2000), time division synchronous code division multiple access (TD-SCDMA)
  • 4G – (LTE) Ericsson is actively involved in the development of standards for this next generation of standards.

Through network operators, Ericsson offers services to more than two billion customers worldwide.[84]

Fixed broadband access[edit]

Ericsson’s fixed broadband offering consists of broadband multi-service communications equipment and services.[85] Its solution for multi-service networks utilizes a layered soft-switch service and control architecture, combined with broadband access and core network routing and transmission elements.[86]

Radio access networks[edit]

Ericsson offers radio base stations ranging from small pico cells to high-capacity macro cells. Radio base stations provide access and interconnection between devices and the mobile network.

Other elements of the radio access networks are the controllers for radio base stations and radio access network, which manage the traffic between the radio base stations and core networks.[87] In 2G, base station controllers – in conjunction with mobile switching centers – effect call handovers between radio base stations as subscribers move between cell sites.[87] Similarly, in 3G networks, a radio network controller manages call handover in conjunction with mobility server nodes within the service layer.

The core network nodes interconnect radio access networks with other parts of the network. Many of the core network switching systems, controllers for base stations and radio networks are built on common platforms.

IP core network (switching, routing, control and transport)[edit]

Ericsson's core network solutions include the mobile softswitch, IP infrastructure, IMS, media gateways, Mobile Packet Backbone Network (MPBN) and microwave and optical transport solutions for handling voice and data traffic.

Ericsson Power Modules[edit]

Ericsson Power Modules is a supplier of direct current (DC)/DC converters and DC/DC regulators, mainly to the communications industry, for advanced applications, such as multiplexors, switches, routers and radio base stations.[88] Manufacturing is in China.

Business Unit Support Solutions[edit]

Initially established in 2007 as Business Unit Multimedia, Ericsson announced a new strategy for its multimedia business in February 2012.[89]

Per Borgklint has headed Business Unit Support Solutions since 2011.[72] Business Unit Support Solutions develops and delivers software-based solutions for operations and business support systems (OSS and BSS), real-time, multi-screen and on demand TV and Media solutions as well as solutions and services for the emerging m-commerce eco-system. Ericsson claims a leading position in charging and billing, serving 1.6 billion people with its solutions.[90]

  • OSS and BSS has expanded following the integration of Telcordia[91] and focuses on Customer experience management (CEM), including fulfillment, assurance, network optimization and real-time charging.
  • TV and media offers products that enable operators and content owners to monetize video content through multi-screen TV services.[92]
  • M-Commerce sells mobile e-commerce products,[93] for mobile operators and financial institutions offer mobile wallet services to consumers.[94] Ericsson has announced m-commerce deals with Western Union[95] and African wireless carrier MTN.[96]

Business Unit Global Services[edit]

Ericsson’s service organization is active in 180 countries.[97] The unit’s product portfolio includes managed services, systems integration, consulting, network rollout, design and optimization, broadcast services, learning services and support.

Most of Ericsson’s customers are telecom operators, but the company also works with other industries such as TV and media, public safety and utilities. Ericsson manages networks that serve more than 1 billion subscribers worldwide and supports customer networks that serve more than 2.5 billion subscribers. Since 2010 Magnus Mandersson has been Head of Business Unit Global Services.[72]

Managed services[edit]

Ericsson provides managed services for designing, building, operating and managing day-to-day operations of a customer's network, including end-user services and business-support systems, hosting service applications and content, and providing network coverage and capacity on demand.[98] In all current managed services contracts, excluding hosting, Ericsson manages networks that together serve more than 1 billion subscribers.[99]

As of 2010 Ericsson has offered to assume ownership of customer's networks in addition to managing them.[100]

Ericsson also provides both preventative and corrective support services.[101]

Systems integration[edit]

Ericsson's systems integration offering currently consists of seven service offerings:[102]

  • Operations Support Systems
  • Business Support Systems
  • IP Networks and Architecture
  • TV, Applications and Service Delivery Platforms
  • Solution and Life-Cycle Management
  • Data Migration
  • Multi-Vendor Verification

Education and consulting[edit]

Learning Services and Ericsson[103] provide training programs and managed learning services. Ericsson also offers strategy-, technology-, network-, operations- and competence consulting.

Network roll-out[edit]

Ericsson’s network rollout services employ a mix of in-house capabilities, subcontractors and central resources to perform the task of making changes to live networks.[104]

The service offering includes access, core and transport networks, as well as in-building solutions, irrespective of vendor.

Ericsson’s customized service offerings include:[105]

  • Civil Works
  • Data Migration
  • Integration
  • Integration Design
  • Multi-Vendor Verification
  • Network Design
  • Site Acquisition

Network design and optimization[edit]

Ericsson offer services such as technology deployment, network transformation, and network optimization to help ensure an optimal end user experience and operator profitability.[97] Ericsson’s Network Design and Optimization (ND&O) includes a range of network-related services to ensure operator networks are able to handle the high levels of mobile data traffic such as: planning, design, tuning, optimization, auditing and benchmarking.[97]

Broadcast services[edit]

Ericsson Broadcast Services combines the company’s global services expertise and Emmy awarding-winning TV technology with its position in managed services to enhance the efficiency of the business operations of regional and global broadcasters.[106]

The Ericsson Managed Services portfolio enables broadcasters to make operational and capital expenditure savings by assuming responsibility for technical platforms, while reducing time-to-market and minimizing business continuity risks.[107]

Ericsson’s Broadcast Services has responsibility for technical platforms and operational services related to Content Management, Playout and Service Provisioning of a broadcaster's business. Ericsson’s services cover live and pre-recorded, commercial and public service television.[108]

With today’s growth in global media consumption, broadcasters and media organizations are processing higher quantities of media in a variety of formats. Ericsson’s media management services offering is a one-stop solution for the unified preparation and delivery of content.[109] The function helps broadcasters and media organizations to deliver a quality viewing experience to their customers.[110]

Ericsson’s media management services comprise two solutions — Managed Media Preparation and Managed Media Internet Delivery.[111]

Learning services[edit]

Ericsson’s Learning Services identifies key challenges that impact operators and tests their ability to manage people performance.[112]

Support[edit]

Ericsson Support combines technology leadership with a unique mix of global and local expertise to enable operators to meet their business objectives. The foundation of Ericsson’s support offering is the Secure Support service.[113] This package can be complemented with value-added Ericsson services such as Assure, Proactive Support, Software Update Management, Special Event support and Extend in order to respond to different operator needs.

Business Unit Modems[edit]

The company’s modems portfolio includes the design, development, supply and sales of the LTE multimode thin modem solutions, including 2G, 3G and 4G interoperability. This activity was transferred to Ericsson from ST-Ericsson on August 2, when the new Modems organization was put in place.[114]

The unit is responsible for developing a portfolio of technologies including the Ericsson M7000 series multimode modems which supports major access technologies such as; LTE (FDD /TDD ), HSPA+, HSPA, TD-SCDMA and EDGE.

Mats Norin assumed his role as Vice President and Head of Business Unit Modems on August 2, 2013.[115]

Divested Businesses[edit]

Sony Ericsson Mobile Communications AB (Sony Ericsson) was a joint venture with Sony which merged the previous mobile phone operations from both companies. As well as mobile phones, it also produced accessories and personal computer (PC) cards. Sony Ericsson was responsible for product design and development, as well as marketing, sales, distribution and customer services. On February 16, 2012, Sony announced it had completed the full acquisition of Sony Ericsson.

Further information: List of Sony Ericsson products

Mobile (cell) phones[edit]

As a joint venture with Sony, Ericsson’s mobile phone production was moved into the company Sony Ericsson in 2001. The following is a list of mobile phones marketed under the brand name Ericsson.

GF 768


Telephones[edit]

Ericsson Mobile Platforms[edit]

Ericsson Mobile Platforms was a supplier of technology platforms for GSM/EDGE and WCDMA/HSPA platforms used in devices, such as mobile handsets and PC cards.[117] Through Ericsson Mobile Platforms, Ericsson licensed open-standard, end-to-end interoperability-tested GSM/EDGE and WCDMA technology platforms.

The product offering included reference designs, platform software, application-specific integrated circuit (ASIC) designs and development boards, development and test tools, training, support and documentation. Ericsson Mobile Platforms had operations at nine global locations, with main operations in Sweden.

The company existed for 8 years, but February 12, 2009 Ericsson announced that Ericsson Mobile Platforms would be merged with the mobile platform company of STMicroelectronics, ST-NXP Wireless, to create a 50/50 joint venture owned by Ericsson and STMicroelectronics.[118]

This joint venture was divested in 2013 and remaining activities can be found in Ericsson Modems and STMicroelectronics. Ericsson Mobile Platform ceased being a legal entity early 2009.

Ericsson Enterprise[edit]

Ericsson Enterprise provided communications systems and services for businesses, public entities and educational institutions. It produced products for voice over Internet protocol (VoIP)-based private branch exchanges (PBX), wireless local area networks (WLAN), and mobile intranet solutions. Ericsson Enterprise operated mainly from Sweden but also operated through regional units and other partners/distributors. In 2008, the Ericsson Enterprise business was sold to Aastra.[119][120]

.mobi and mobile internet[edit]

Ericsson was an official backer in the launch of the .mobi top level domain created specifically for the mobile internet.[121] Since the launch of .mobi in September 2006, Ericsson has launched Ericsson.mobi, its mobile portal, and SonyEricsson.mobi, the mobile portal of Sony Ericsson. Additionally, Ericsson hosts a developer program called Ericsson Developer Connection, designed to encourage development of applications and services.[122] Ericsson also has an open innovation initiative for beta applications and beta API's & tools called Ericsson Labs. The company hosts several internal innovation competitions among its employees.

See also[edit]

References[edit]

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Further reading[edit]

  • John Meurling & Richard Jeans (1994) A switch in time: AXE — creating a foundation for the information age. London: Communications Week International. ISBN 0-9524031-1-0.
  • John Meurling & Richard Jeans (1997). The ugly duckling. Stockholm: Ericsson Mobile Communications. ISBN 91-630-5452-3.
  • John Meurling & Richard Jeans (2000). The Ericsson Chronicle: 125 years in telecommunications. Stockholm: Informationsförlaget. ISBN 91-7736-464-3.
  • The Mobile Phone Book: The Invention of the Mobile Telephone Industry. ISBN 0-9524031-0-2
  • Mobile media and applications – from concept to cash: successful service creation and launch. ISBN 0-470-01747-3
  • Anders Pehrsson (1996). International Strategies in Telecommunications. London: Routledge Research. ISBN 0-415-14829-4

External links[edit]

Recent patent filings[edit]