Foundation Lars Magnus Ericsson began his association with telephones in his youth as an instrument maker. He worked for a firm that 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 in central Stockholm and repaired foreign-made telephones. In 1878, Ericsson began making and selling his own telephone equipment. His telephones were not technically innovative. In 1878, he agreed to supply telephones and switchboards to Sweden's first telecommunications operating company, Stockholms Allmänna Telefonaktiebolag. Despite its successes elsewhere, Ericsson did not make significant sales in the United States.
AT&T's
Western Electric Company (via the
Bell System),
Kellogg and
Automatic Electric dominated the market. Ericsson eventually sold its U.S. assets. Sales in Mexico led to inroads 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 in Stockholm Ericsson ignored the growth of
automatic telephony in the United States and concentrated on manual exchange designs. Their first dial telephone was produced in 1921, although sales of the early automatic switching systems were slow until the equipment had proven itself on the world's markets. Telephones of this period had a simpler design and finish, and many of the early automatic desk telephones in Ericsson's catalogues were magneto styles with a dial on the front and appropriate changes to the electronics. Elaborate decals decorated the cases.
Shareholding changes The acquisition of other telecommunications companies put pressure on Ericsson's finances; in 1925,
Karl Fredric Wincrantz took control of the company by acquiring most of the shares. Wincrantz was partly funded by
Ivar Kreuger, an international financier. The company was renamed
Telefonaktiebolaget L M Ericsson. Kreuger started showing interest in the company, being a major owner of Wincrantz holding companies. It released one of the world's first hands-free speaker telephones in the 1960s. In 1954, it released the
Ericofon. Ericsson
crossbar switching equipment was used in telephone administrations in many countries. In 1983 the company introduced the
ERIPAX suite of network products and services.
Emergence of the Internet (1995–2003) In the 1990s, during the emergence of the Internet, Ericsson was regarded as slow to realize its potential and falling behind in the area of IP technology. But the company had established an Internet project in 1995 called Infocom Systems to exploit opportunities leading from 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)". (1995) and
Ericsson T28 (1999) mobile phones The growth of
GSM, which became a
de facto world standard, combined with Ericsson's other mobile standards, such as
D-AMPS and
PDC, meant that by the start of 1997, Ericsson had an estimated 40% share of the world's mobile market, with around 54 million subscribers. There were also around 188 million
AXE lines in place or on order in 117 countries. when the two companies agreed to pay each other royalties for the use of their respective technologies and Ericsson purchased Qualcomm's wireless infrastructure business and some R&D resources. Ericsson issued a profit warning in March 2001. Over the coming year, sales to operators halved. Mobile telephones became a burden; the company's telephones unit made a loss of SEK 24 billion in 2000. A fire in a Philips chip factory in New Mexico in March 2000 caused severe disruption to Ericsson's phone production, 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. Ericsson launched several rounds of restructuring, refinancing and job-cutting; during 2001, staff numbers fell from 107,000 to 85,000. A further 20,000 went the next year, and 11,000 more in 2003. A new rights issue raised SEK 30 billion to keep the company afloat. The company had survived as mobile Internet started growing. With record profits, it was in better shape than many of its competitors.
Rebuilding and growing (2003–2018) The emergence of full mobile Internet began a period of growth for the global telecom industry, including Ericsson. After the launch of 3G services in 2003, people started to access the Internet using their telephones. Ericsson was working on ways to improve
WCDMA as operators were buying and rolling it out; it was the first generation of 3G access. New advances included IMS (IP Multimedia Subsystem) and the next evolution of WCDMA, called
High-Speed Packet Access (HSPA). It was initially deployed in the download version called
HSDPA; the technology spread from the first test calls in the US in late 2005 to 59 commercial networks in September 2006. HSPA would provide the world's first mobile broadband. In July 2016,
Hans Vestberg stepped down as Ericsson's CEO after heading the company for six years. Jan Frykhammar, who had been working for the company since 1991 stepped in as interim CEO while Ericsson searched for a full-time replacement. On 16 January 2017, following Ericsson's announcement on 26 October 2016, new CEO
Börje Ekholm started and interim CEO Jan Frykhammar stepped down the following day. In June 2018, Ericsson, Inc. and Ericsson AB have agreed to pay $145,893 to settle potential civil liability for an apparent violation of the
International Emergency Economic Powers Act (IEEPA) and the Sudanese Sanctions Regulations, 31 C.F.R. part 538 (SSR).1
Acquisitions and cooperation Around 2000, companies and governments began to push for standards for mobile Internet. In May 2000, the
European Commission created the
Wireless Strategic Initiative, a consortium of four telecommunications suppliers in Europe – Ericsson,
Nokia,
Alcatel (France) and
Siemens (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 December 1999,
Microsoft and Ericsson announced a
strategic partnership to combine the former's web browser and server software with the latter's mobile-internet technologies. In 2000, the Dot-com bubble burst 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 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. The short-lived partnership, called Ericsson Microsoft Mobile Venture, owned 70/30 percent by Ericsson and Microsoft respectively, ended in October 2001 when Ericsson announced it would absorb the former joint venture and adopt a licensing agreement with Microsoft instead. The same month, Ericsson and
Sony announced the creation of the mobile phone manufacturing joint venture:
Sony Ericsson Mobile Communications. Ten years later, in February 2012, Ericsson sold its stake in the joint venture; Ericsson said it wanted to focus on the global wireless market as a whole. 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 (Germany), Nokia (Finland), as well as Ericsson – all announced job cuts in their home countries and subsidiaries around the world. Ericsson's workforce worldwide fell during 2001 from 107,000 to 85,000. 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. In 2002, ICT 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. The collapse of U.S. carrier
WorldCom, with more than $107 billion in assets, was the biggest in U.S. history. The sector's problems caused bankruptcies and job losses, and led to changes in the leadership of several major companies. Ericsson made 20,000 more staff redundant and raised about $3 billion from its shareholders. In June 2002,
Infineon Technologies (then the sixth-largest semiconductor supplier and a subsidiary of
Siemens) bought Ericsson's
microelectronics unit for $400 million. Ericsson was an official backer in the 2005 launch of the
.mobi top-level domain created specifically for the
mobile internet. Co-operation with Hewlett-Packard did not end with
EHPT; 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. In October 2005, Ericsson acquired the bulk of the troubled UK telecommunications manufacturer
Marconi Company, including its brand name that 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. In 2007, Ericsson acquired carrier edge-router maker
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%. In 2008, Ericsson sold its enterprise PBX division to
Aastra Technologies, and acquired
Tandberg Television, the television technology division of Norwegian company
Tandberg. In 2009, Ericsson bought the
CDMA2000 and
LTE business of
Nortel's carrier networks division for US$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. Acquisitions in 2010 included assets from the Strategy and Technology Group of inCode, 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;< 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) as well as Nortel's Multiservice Switch business. Ericsson acquired U.S. company
Telcordia Technologies in January 2012, an operations and business support systems (OSS/BSS) company. In March, Ericsson announced it was buying the broadcast-services division of
Technicolor, a media broadcast technology company. In April 2012 Ericsson completed the acquisition of BelAir Networks a strong Wi-Fi network technology company. On 3 May 2013, Ericsson announced it would divest its power cable operations to Danish company
NKT Holding. On 1 July 2013, Ericsson announced it would acquire the media management company
Red Bee Media, subject to regulatory approval. The acquisition was completed on 9 May 2014. In September 2013, Ericsson completed its acquisition of Microsoft's Mediaroom business and televisions services, originally announced in April the same year. The acquisition makes Ericsson the largest provider of IPTV and multi-screen services in the world, by market share; it was renamed
Ericsson Mediaroom. In September 2014, Ericsson acquired majority stake in
Apcera for cloud policy compliance. In October 2015, Ericsson completed the acquisition of
Envivio, a software encoding company. In April 2016, Ericsson acquired Polish and Ukrainian operations of software development company
Ericpol, a long-time supplier to Ericsson. Approximately 2,300 Ericpol employees joined Ericsson, bringing software development competence in radio, cloud, and IP. On 20 June 2017, Bloomberg disclosed that Ericsson hired Morgan Stanley to explore the sale of its media businesses. The Red Bee Media business was kept in-house as an independent subsidiary company, as no suitable buyer was found, but a 51% stake of the remainder of the Media Solution division was sold to private equity firm One Equity Partners, the new company being named MediaKind. The transaction was completed on 31 January 2019. In February 2018, Ericsson acquired the location-based mobile
data management platform Placecast. Ericsson has since integrated Placecast's platform and capabilities with its programmatic mobile ad subsidiary,
Emodo. In May 2018, SoftBank partnered with Ericsson to trial new radio technology. In September 2020, Ericsson acquired US-based carrier equipment manufacturer Cradlepoint for $1.1 billion. In November 2021, Ericsson announced it had reached an agreement to acquire
Vonage for $6.2 billion. The acquisition completed in July 2022. In January 2024, Ericson and
MTN Group announced expansion of their partnership to boost their mobile financial services on Africa market, as the company appointed Michael Wallis-Brown as vice president responsible for global mobile financial services. In January 2026, Ericsson announced a plan to return 15 billion Swedish crowns ($1.7 billion) to investors through its first share buyback programme. == Corporate governance ==