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June 28, 1987


By CBR Staff Writer

L M Ericsson’s Thorn-Ericsson telephone exchange manufacturing business in Scunthorpe was so confident of winning a substantial share of future exchange business with the System Y AXE exchange that vice-president for public telecommunications was quoted by Monday’s Financial Times as saying that the company was planning for orders for 1m lines next year. So it has hit the company with a bit of a jolt to learn that in the latest round of orders – for 720,000 lines – announced late last week, far from getting orders for the 220,000 or so lines implied by the 1m figure, Thorn-Ericsson came away with zilch. All UKP88m of the business this time around has gone to System X, with GEC getting about 60% this time around, and Plessey the balance. British Telecom places about four such orders a year, and there is no suggestion that Thorn will lose out in upcoming rounds of bidding, but the failure to win any business this time is a decided blow to its confidence. The key feature of this round was that it was only the second to be conducted under competitive tendering rules – with Plessey and GEC competing against each other as well as against Thorn-Ericsson, and British Telecom said that swings were bound to occur between the suppliers under a competitive regime. It is believed that Telecom was looking for very keen pricing this time around, and that it was mainly on price that Thorn-Ericsson stumbled. The joint venture is shrugging off the setback and is going ahead with the expansion of its Scunthorpe factory, which will raise annual capacity to 750,000 lines. The extension is due to be opened by Sir George Jefferson and Sir William Barlow on July 9.

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