GSM Technology and Telecoms in Sweden: The Story of Innovation and Industrial Transformation

Abstract: The main research interest of this study is to explain how GSM technology transformed telecommunications industry in Sweden in terms of: a. prices, b. products and services, and c. new industry directions. The background assumption about transformative effect of GSM is inspired by Schön’s observations on the impact of the Second Industrial Revolution on electrification of the Swedish industry. This study transforms the theory of development blocks to include pervasive technology, or technology of widespread use. GSM here is regarded as the centre of the pervasive development block, an evolutionary outcome of the cellular technology, which in its turn is the outcome of the Third Industrial Revolution. The analysis found that GSM is truly a technology of pervasive nature with transformative impact on the Swedish telecoms industry on three major fronts: firstly, in interplay with cellular technology, GSM affected production at a lower cost and presumably accelerated the decrease in average prices of the telecoms equipment. Secondly, it introduced a decisively new portfolio of network services integrated both in Ericsson and Sony Ericsson products making the mobile phone widely popular in use whilst defining new directions in context of positive growth of the industry. Finally, it made possible the remarkable integration of Internet and mobile telephone changing the quality of the telecoms industry over the long-term.