BRITISH ERICSSON

At the start of the 20th century, the National Telephone Company in Britain was a major customer of Ericssons. They imported large quantities of phones and equipment from Sweden. Although National was a major user of equipment, they were an operating company rather than a telephone manufacturer. As such, they had to bear heavy political pressures from the British Post Office which was lobbying to take over the telephone market for itself. The Post Office could not meet the demand for phones, so private companies had been able to develop services in many areas.

National was quite successful in building its own networks and buying out others, and had standardised on Ericsson phones and Western Electric switching equipment. By the turn of the century they were taking half the output from LME’s Swedish factory, so when they proposed a joint venture factory with Ericssons to manufacture phones in England, both companies saw the opportunities. Ericsson’s motives were twofold. Their Swedish factory was unable to keep up the level of supply for all its customers, and a new factory was needed desperately. Further, a manufacturing presence in the U.K. would give them a political advantage for U.K. contracts and the growing British colonial markets. The joint venture with their biggest British customer would give the firm a local flavour that the Americans would not be able to match.

National already had a factory at Beeston in Nottingham in 1901, where it was doing research, repairs and refurbishment rather than building phones. The factory employed 130 people, compared with under 100 at Ericssons' Swedish factory. In 1903 the Beeston factory was taken over by the new company , the British L M Ericsson Manufacturing Co. Ltd. It was owned equally by National and Ericsson.

With unfortunate timing the British Government decided in 1905 that National’s license to operate would terminate in 1912. The firm’s customers and assets would then be bought out by the Post Office.

The Beeston factory, however, was a commercial success. It had to be expanded in 1906-07 to cater for the demand. This expansion would have been largely funded by Ericssons, as National had now reverted to a holding operation until its license expired. It would not invest money in an operation which would not return an immediate profit. In 1911 Ericssons finally bought out National’s share of the factory. Although no longer selling to National, it was producing large amounts of equipment for the now enlarged British Post Office.

Beeston continued to grow, and in 1925 the capital was increased by sales of shares from two hundred thousand pounds to half a million pounds. The money was used to upgrade the factory for the manufacture of automatic telephone exchanges as part of the British Post Office’s automation plans. The name of the company was also changed to Ericsson Telephones Ltd in March 1926. The local presence paid off, as Ericssons got the largest share of the BPO contracts. The exchanges were a Strowger design, and many were still in operation until late in the twentieth century.

This manufacture of another company’s design was not unusual. Beeston had been building equipment under contract for many years. In 1929 it even began the manufacture of totalisator betting equipment for Britain’s racecourses. It was designing its own phones to suit its wide markets. The company was allowed a fair degree of independence from its parent, although there were two Swedish representatives on the board of directors. During the 1930s Ericsson Telephones Ltd was producing as much income as the parent factory in Stockholm.

In 1939, the Second World War broke out. ETL looked like it would be seized by the Government under the Trading With The Enemy Act, if Sweden was invaded by Germany. To avoid this, the parent company reduced its shareholding in ETL to below 50 percent, and removed the two Swedish directors. During the war Beeston produced radios for the R.A.F. and carried out repairs to exchanges and equipment damaged in the bombing. By the end of the war the factory employed 5,500 people. It also sold equipment to many countries previously serviced by the Swedish factory. It had become an independent entity, and was under very little influence at all from its parent company.

In 1950 and 1951 the remaining Swedish shares were sold on the British market, and all involvement in the firm by Ericssons ceased.

For a comprehensive catalog of British Ericsson phones, see Bob Freshwater'sTelephone File website

Sources: The National Telephone Company of Great Britain – Graham Marshall ,ATCS Newsletter
L M Ericsson 100 Years Aatman Kuuse & Olsson
National Telephone Journal 1906 – information provided by Linley Wilson
British Telephones Web Site and CD “The Telephone File” - Bob Freshwater

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