Ericsson - 150 years of telephony

One of the three companies that can build a national mobile network end to end began as a repair shop in a former kitchen of thirteen square metres on a Stockholm street. Its first customer was the city fire brigade, which on 6 April 1876 paid two kronor to have some instruments mended.

It was not founded to exploit an invention. By the company's own account the objective was its founder's wish to work for himself, and the staff besides Lars Magnus were a colleague and a twelve-year-old errand boy. In the same year, unknown to any of them, Alexander Graham Bell filed his telephone patent in the United States.

The origin turns entirely on that patent, and specifically on where it was not filed. Bell protected the telephone almost everywhere in the world and did not protect it in Sweden. So when customers brought Bell instruments in for repair, Lars Magnus was free to study them, improve them and build his own - which he did, analysing Siemens telephones alongside them. His own were not technically innovative. They were better made and cheaper, and by 1878 he was selling them.

There is an irony worth stating without labouring it: a company that exists because of an unfiled patent was founded by a man who was, by the record, somewhat opposed to patents. He also disliked publicity and did not wish to be idolised, retired at fifty-four, and had sold every share by 1905.

What broke the market open was not the product but a customer. Bell's subsidiaries held Swedish telephone service until 1883, when Henrik Tore Cedergren founded a rival operator and bought its equipment from Ericsson. A manufacturer with no route to market found one by supplying the competitor to the incumbent, which is the oldest move in this industry and still the most reliable.

The wall telephone that followed sold abroad as the Swedish pattern, and the export business that grew from it is the through-line to everything after: the AXE switch, the GSM work, the Bluetooth project, and a present in which three vendors worldwide can supply a mobile network. A hundred and fifty years on, the company still sells to operators rather than to the public - the same position, at a different scale.

Selling to operators means the equipment sits where a country's calls are switched, and one episode shows what that position carries. Between June 2004 and March 2005, around a hundred mobile phones on Vodafone Greece were intercepted - the prime minister and his wife, ministers, military and police officials, journalists. The taps ran on Ericsson AXE exchanges, through the lawful interception facility that exists in such equipment because governments require it.

The detail that should be taught from this is about how the feature was sold. The AXE handles lawful interception with two parts: a subsystem that performs the tap, and a management system that adds taps and keeps the log. Where both are running, every intercepted number is recorded and an administrator can audit for taps nobody authorised. Vodafone had not bought the lawful intercept option, so the management system was absent - but an earlier software upgrade had already delivered the tapping subsystem. The capability to listen was present and the capability to notice was not.

The way in was also a feature working correctly. AXE exchanges allow code to be patched without a reboot, because a national network cannot be stopped for maintenance. That is the same shape as the photocopier repairman in Washington and the plant controller that cannot be taken offline: the arrangement that keeps a system serviceable is the arrangement that lets somebody in.

The ending is unsatisfying and must be reported that way. The software was removed on the chief executive's order, which also removed the evidence. A day later a 38-year-old Vodafone engineer, due to be married in three months, was found hanged; no connection to the case has ever been established, and none should be implied. The investigation closed in 2008 with no suspects, and charges were filed against whoever might be found responsible, naming nobody. Two decades on, the lawful interception mechanism that a legislature required has been used once, at national scale, by parties still unknown - which is the argument about mandated access being made by events rather than by anybody's opinion.