You are a Swedish company, which has recently started working with a Japanese electronics manufacturer.What would be your assessment of the Russian Federation's communications infrastructure and its development over the last ten years?

I represent Ericsson in Russia and have been here for 4 years, responsible for sales,
and a year back I became President for Ericsson in Russia, which is a part of the Eastern Europe and Central Asia Market Unit. Ericsson's connection with Russia has deep historical roots. Ericsson's first delivery to Russia dates back to 1881, when we got the first order for telephones from St.-Petersburg. So we are here for more than 120.

Ericsson as international company also understands the important role of Russia in the development of telecommunications and information technologies, not only inside the country but in other markets Eastern European and Central Asian countries which Russia historically has a close relationships with. Russian operators have entered the other CIS countries - MTS launched its network in Belarus, MegaFon in Tajikistan. We also see that the concept of the Russian federal program called "Electronic Russia", (which leads the development of information and telecoms infrastructure to give equal rights for all the citizens in access to information resources) becoming more and more popular in the other countries of this region.

In 1994, Ericsson established a local company called Ericsson Corporatia AO. With this company, we have 8 years' experience in the Russian telecoms market. Since 1994, we have had a few years when the markets were booming until the 1998 crisis. Then, for a few years, it was very slow when it came to sales. Then it started to pick up again, the trust came back to the industry. Since 2000, the times have been good both for sales and investments. Even if the growth has started from a fairly low level, it has still been very positive looking at the trends: in the current year, the number of new fixed lines was two times higher than in 2001, the number of mobile subscribers has doubled each year and will reach over seventeen million subscribers by the end of 2002, the number of internet users has increased by seventy five per cent in 2002 compared to 2001.

Cellular penetration has also been growing fast for the last two years, mainly in GSM which is the clear leader among the other mobile standards. Ninety per cent of subscribers are connected nowadays to GSM networks all over Russia.

The growth in mobile communications will certainly continue for another few years as the penetration is still fairly low in comparison with western countries, for example. We see that there is certainly a need to continue investments in industry development. In the cellular industry, we also see interest from international players such as Deutsche Telecom, Telia, Sonera and Telenor. Tele2, a Swedish player, is also here.

I have experience both with the downturn of 1998 and the rapid telecoms development as we see it now. I came here in August 1998 with high hopes to continue following the boom and the first years of my assignment were to downscale, which we did. Then we started to get better again but through all those years we were committed to the development of the market and, sure, Ericsson came here seriously and for a long time. So, here we are now and it looks good, I would say. We do not see any signs of the downturn like we notice in many western markets. On the contrary, the Russian market is growing, having a need for basic as well as advanced telecoms services; from my perspective, it is a high potential market but still not yet a mature one.

Ericsson Russia has signed a $40m contract to build a telecommunications infrastructure for Moscow city and the Moscow region. How do you propose to achieve your goal of having the project up and running by the end of 2002?

This particular project is with a company called Telecom-Invest XXI, which is a Moscow and Moscow region based fixed operator. Telecom-Invest-XXI, together with NEFTEGAZBANK and Ericsson, have signed a contract for the supply of a multiservice network for the Moscow region and Moscow. When it comes to putting services into operations we would like to refer to our customer.

Ericsson is a large, international company, with offices in more than 140 countries around the world but the Russian Federation is the largest country in the world. There are very many climatic and cultural differences within one country. How has Ericsson developed its operations and partnership programs to deal with this?

At the moment, we are 300 people in Russia. We have our main office in Moscow, one more office in Moscow connected to the Technical University of Telecommunications - MTUCI, where we have a training centre and also some technical staff. Ericsson Training Center is the joint venture established together with Moscow Technical University of Telecommunications. Around 10.000 people have got general and specialised training there since it was opened in 1996. We also have some partners dedicated to software R&D. For example, Ericsson supports Trustlink in the development of SoftWare, which can be rooted in by the operator for his enterprise customers.

Ericsson Mobility World - is a global Ericsson project with a local point of presence in Russia, aimed to provide the independent developers of applications with all the necessary tools and network emulators in order to let them develop the applications for Mobile Internet. By sharing our technology and expertise with developers, we help turn their great ideas into real-world applications. Applications that telecom operator can sell today.

Generally speaking: This market is not really a country, it is a continent with 11 time zones!
We certainly have partners and customers from Kaliningrad in the west to Vladivostok in the Far East. We have customers throughout this vast territory. It is certainly not an easy market to handle from this point of view. We do not have local offices in all of these places. Except for Moscow we currently have office in St-Petersburg and field support center in Krasnoyarsk to support the Far Eastern and Siberian regions.

We started to do business in Russia in 1881 when we sold the first telephone sets in St Petersburg. The company's first telephone exchange in Russia was installed as early as 1893. In 1897 the telephone factory was opened in St.-Petersburg, in 1917 it had more than 3000 workers (twice as many as the parent factory in Stockholm). At the beginning of the last century which was nationalised in 1917 and renamed into "Krasnaya Zarya" - "The Red Dawn", it still exists under this name. By the end of the nineteenth and beginning of the twentieth centuries, Russia was one of the major Ericsson markets.

Since then we continued to sell our products through some other channels, the former Yugoslavia mainly. Ericsson Nikola Tesla, which is a joint venture between Croatian company and Ericsson, had been doing business in Russia for many years and we had to use them to localize Ericsson switches and some other products, to develop the special
software needed for the Russian market. More and more, Russia is aiming towards more open standards but still we have to localise some of our products and certify them. Except for that, there are no other special products for this market but we can be proud of the fact, that Transit network for Russia's NMT and GSM operators (Multiregional Transit Telecom's - MTT) is based on Ericsson's unique Combined Gateway solution specially developed for the customer.

You are a Swedish company, which has recently started working with a Japanese electronics manufacturer Do you think that the new Sony-Ericsson handsets will be a success in Russia?

As you mentioned "Japanese electronics manufacturer", you are probably very well aware that last year the Sony-Ericsson joint venture was established. The company is also active in Russia as an independent one but they are located in the same building as we are. Actually I do not represent Sony Ericsson; it is an independent company, however I believe, that they will be successful when offer high quality terminals at a reasonable price.