Telephone lines to every home
A civil engineer and Stockholm businessman named Henrik Thore Cedergren was one of the first persons to buy a subscription in the telephone network established by Stockholms Bell Telefonaktiebolag. He owned jewelry stores and managed a brick production plant on Götgatan, in southern Stockholm. Shortly after Cedergren acquired his subscription in the Bell Telephone Company's network, he noticed how much time could be saved using the telephone. He calculated the costs to establish a competing network and came to the conclusion that telephone service in Stockholm should not cost more than SEK 100 per year for subscribers. He took the initiative, accordingly, to establish a new telephone company that offered telephone services at lower prices than Bell.
Telephones and switchboard equipment were needed to start a new telephone company, and H T Cedergren initiated a partnership with Lars Magnus Ericsson, who had recently started to manufacture high-quality telephone materials. In February 1883, Cedergren established a new, independent Swedish telephone company, Stockholms Allmänna Telefonaktiebolag, which, "utilizing Swedish materials and offering lower prices, would provide the general public with telephone connections." The goal of Cedergren's company was "telephone lines to every home and every tenant in every apartment building."
Cedergren recruited support for his plans from the Stockholm House Property Owners' Association - the telephone lines would had to be drawn over the roofs of the association's buildings. The association, in turn, declared that establishment of the telephone company should "be promoted in every possible way." Stockholms Allmänna Telefonaktiebolaget (SAT) was formed in April 1883 with share capital amounting to a minimum of SEK 90,000 and maximum of SEK 210,000. Operations started on May 15 and, by Midsummer a month later, 600 shares had already been sold. On October 31, 1883, the main switching station was opened in Norrmalm, followed by a station on Urvädersgränd 9 in Södermalm on December 1 and a third station on Svartmanngatan 6, in Gamla Stan (the Old Town), on March 1, 1884.
The company's main exchange was installed in the building at Oxtorgsgatan 6, and a "telephone hanger" was erected on the roof to accommodate 1,200 lines. The station was built for 3,000 subscribers, supported by exchanges designed to serve 50 subscribers each. The connecting lines consisted of cords with plugs and jacks and, between each exchange, connections were run to switch subscribers from one exchange to another.
Above the station on Svartmanngatan, an 18-meter tower was erected to carry 1,100 connections to any building in Gamla Stan, the Old Town section of Stockholm. The connections were strung above all other lines in the area.
There were now two competing telephone companies in Stockholm, a situation that soon generated benefits for subscribers. Cedergren, however, was forced to abandon his plans to establish an annual telephone subscription fee of SEK 100 for unlimited calling privileges. Instead, subscribers were charged an annual fee of SEK 125. Effective October 1, 1884, the Bell telephone company was forced to reduce its charges to the same amount.
When Cedergren reached an agreement with Lars Magnus Ericsson for supplies of required telephones and switching equipment, Ericsson agreed not to deliver telephones or any other telephony equipment to any other telephone company in Stockholm. The agreement was naturally aimed at Stockholm's Bell Telefonaktiebolag, which was forced to import telephones and switching equipment.
As a result of the competition between SAT and Bell, with low telephone charges and high technical standards, Stockholm became the world leader in telephones as early as 1885, both in terms of telephones per capita and absolute values. Stockholm had 4,832 installed telephones in 1885, corresponding to 22.5 telephones per 1,000 inhabitants, compared with 3.3 telephones per 1,000 inhabitants in Berlin, for example, 0.9 in London, 1.4 in Paris and 4.9 telephones per 1,000 inhabitants in Copenhagen.
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