Thanks to its major breakthrough in the British telephone market at the end of the 19th century, Ericsson did not have much trouble in getting its foot in the door in South Africa, which was partly ruled by Britain. The first telephone exchange was delivered to Capetown in 1896, and was followed by several orders by other cities. In all, Ericsson installed four telephone exchanges in South Africa between 1896 and 1900, making it Ericsson's largest market for exchanges outside Europe.
In addition, Ericsson sold portable field handsets or cavalry telephones to the British during the Boer War, which lasted from 1899-1902. These transportable telephones were originally developed for the Swedish armed forces.
The British side won the war, opening up favorable opportunities for Ericsson in South Africa. During the final stages of the hostilities, Hemming Johansson, Ericsson's chief engineer and later president of the company, visited South Africa and Australia.
Johansson noted that "Ericsson had a special position in South Africa, since its products were undoubtedly a step ahead of the competition. Personal contact with the leading technical people proved to a valuable factor, since this led to very close cooperation over the years."
During the first two decades of the 20th century, Australia was Ericsson's largest market outside Europe, followed by South Africa. But during the 1920s, Ericsson lost ground in South Africa, and this also applied to other parts of the continent. Instead, Ericsson forged ahead in Latin America where it had several concession companies, making it the major non-European market.
The increasing emphasis on foreign sales when Sven Ture Åberg was president of Ericsson led to the formation of a sales company in South Africa in 1958 to replace the previous sales agency system.
Following growing criticism of the apartheid policy in South Africa, however, Ericsson closed its sales office in the mid-1960s, but continued to sell its products via agents. After a few years, Ericsson terminated its agency arrangements and phased out all its operations in South Africa.
Almost one hundred years after its first South African contract, Ericsson made a fresh start in late 1993, when sanctions on investment in South Africa were lifted. The apartheid policy was at an end, and South Africa was planning its first free elections. An extensive reconstruction program was under way, including improvement of the national telecom structure.
Both the two mobile operators in South Africa were granted GSM licenses in the autumn of 1993. One operator Mobile Telephone Networks (MTN) selected Ericsson as its partner for the supply of mobile system networks, thus establishing Ericsson's position in South Africa.
As a result of its contract with MTN, the Ericsson South Africa subsidiary was formed in 1995 to handle all the company's business operations and, in the same year, Ericsson acquired Automatic System Manufacturing (ASM), which manufactures telephony power supply equipment.
In the late 1990s, Ericsson also started to supply digital radio links to Telkom, the fixed-line network operator and, in addition, sales of mobile phones expanded in South Africa.
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