Ericsson established operations in Italy in the mid-1920s following the announcement by the Italian government under Benito Mussolini that substantial investments would be made in expanding Italy's telephone network.
In 1925, Ericsson began operating a telephone network in Southern Italy together with several other parties through the company Societá Esercizi Telefonici (SET). The same year, Ericsson also became a part owner in the manufacturing company Fabbrica Apparechi Telefonici e Materiale Elettrico (FATME), whereupon the company began to manufacture Ericsson products.
At about the same time, Ericsson converted its existing sales office in Genoa to a contracting and sales company, Societá Sistema Ericsson (SIELTE). An installation company was also established under the name Compagnia Installazioni Reti Telefoncche (CIRT).
There were so many companies that they were grouped in a holding company formed in 1930 and called Societá Elettro Telefonica Meridionale (SETEMER). Ericsson did not have a majority of the voting rights in this company and owned only 40 percent of the shares, the largest holding permitted for a foreign owner. In practice, however, it was Ericsson that controlled the holding company.
The most important company economically in the holding company was FATME, which sold telephone equipment to SET, but also had both the Italian government and private persons as its customers.
During the first years of World War II, FATME converted production to war materials and continued to run at full speed. From the summer of 1943, however, southern Italy became a war zone, which disrupted production. The following year, the Germans took away a large portion of the machinery in FATME's plant in Rome. A large portion of SET's telephone network and telephone stations were also destroyed during these years.
Directly after the end of the war, ITT prepared plans to merge all telephone networks in the country, naturally under American leadership. This would enable financial aid from the US for the reconstruction of the telephone network, according to the Americans? reasoning.
Luckily for Ericsson, nothing came of ITT's plans. Instead, SET rebuilt its network and resumed operations a few years after the war.
At the same time, however, the Italian government had begun to purchase telephone operators with the aim of placing telephone operations under government supervision. In 1954, negotiations began on the sale of SET. Ericsson, which was winding down its network operating business, agreed to sell. FATME was also now so well established that losing SET from the Ericsson family was not particularly important. Ericsson was also beginning a successful introduction of its crossbar switching technology in Italy, which resulted in major orders for FATME.
FATME's production plant was expanded continuously during the 1950s and 1960s and the number of workers increased. By the 1960s, it had become one of Ericsson's very largest plants.
In the late 1970s, FATME delivered several telephone stations based on the AKE 13 system. Production of AXE systems was also soon started.
During the 1980s, FATME succeeded in convincing the Italian PTT to introduce a modern analog mobile system, TACS, while waiting for the GSM standard to be completed. FATME produced the switches and operations system, while production of base stations was sub-contracted under license. The network was taken into operation in 1990.
In the early 1990s, Italy's first GSM system was taken into operation using switches supplied by FATME.
By the turn of the century, Italy was one of Ericsson's largest European markets, thanks in large part to excellent sales figures for mobile telephones. These successful sales were due in large part to the successful marketing efforts conducted by Ericsson in Italy.
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