page_title: Ericsson
section_title: 1995–2003: emergence of the Internet
hierarchical_section_title: Ericsson / History / 1995–2003: emergence of the Internet
caption_attribution_description: Ericssons erstes und eines der letzten selbst entwickelten GSM Mobiltelefon
context_page_description: Telefonaktiebolaget LM Ericsson, commonly known as Ericsson, is a Swedish multinational networking and telecommunications company headquartered in Stockholm. The company offers services, software and infrastructure in information and communications technology for telecommunications operators, traditional telecommunications and Internet Protocol networking equipment, mobile and fixed broadband, operations and business support services, cable television, IPTV, video systems, and an extensive services operation.
  Ericsson had a 27% market share in the 2G/3G/4G mobile network infrastructure market in 2018, thus being the largest such non-Chinese company.
  The company was founded in 1876 by Lars Magnus Ericsson and was taken over by the Wallenberg family in 1960; today, the family, through its holding company Investor AB, owns a controlling 22.53% voting power. As of 2016 it is headquartered in Stockholm, Sweden. The company employs around 95,000 people and operates in around 180 countries. Ericsson holds over 49,000 granted patents as of September 2019, including many in wireless communications. Ericsson is the inventor of Bluetooth technology.
context_section_description: 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)".
  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. Telecom and chip companies worked in the 1990s to provide Internet access over mobile telephones. Early versions such as Wireless Application Protocol (WAP) 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 technologies. Ericsson pushed hard for the WCDMA (wideband CDMA) form based on the GSM standard, and began testing it in 1996. Japanese operator NTT DoCoMo signed deals to partner with Ericsson and Nokia, who came together in 1997 to support WCDMA over rival standards. DoCoMo was the first operator with a live 3G network, using its own version of WCDMA called FOMA. Ericsson was a significant developer of the WCDMA version of GSM, while US-based chip developer Qualcomm promoted the alternative system CDMA2000, building on the popularity of CDMA in the US market. This resulted in a patent infringement lawsuit that was resolved in March 1999 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 million 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.
caption: An Ericsson GH337 (1995) and Ericsson T28 (1999) mobile phones