Ericsson Israel will begin operations at the beginning of 1997. General Manager-designate Bo Andrsson is to arrive in Israel December 15 for a three year stay. Ten days ago, Ericsson and Epsilon Communications signed a representation agreement, under which Epsilon will handle sales, installation and partial service. Ericsson will provide all support and instruction and keep a staff of 40-60 employees in Israel. An earlier agreement between the two companies covered the microwave systems, business, home switching systems and telephones. The current agreement covers the public telephony system, international switching and cellular equipment for a GSM network.
Ericsson has also decided to carry out reciprocal purchasing in Israel through acquisition of software for assimilation in business switching systems planned for marketing in Israel. Epsilon’s general manager stated he estimates acquisitions will reach $1 million in 1997 and $10 million in the next three years.
Ericsson Israel is currently negotiating with three local firms. One, Soft-Talk, of Herzlia’s DCL group, is offering Ericsson software providing CTI applications (Computer-Telephony Integration). The second, Silverbyte Systems of the Mer group, offers communications management software for hotels, while the third, Mind Mikna’am, offers call entry software. Epsilon is currently seeking other Israeli high tech firms whose technology can be assimilated into Ericsson systems.
Ericsson is currently competing in two Bezeq switching tenders, one, for a mobile public switchboard, which should be decided soon, and another, for two public switchboards based on ATM technology, in which bids were submitted November 21. Ericsson is also in advanced negotiations with both Golden Lines and the Barak group, the successful bidders in the international telephone calls tender, to supply two switchboards to each of them.
Ericsson markets microwave and home switching systems. 250 such switching systems were sold in Israel in 1996, and, Epsilon plans to launch a $400,000 ad campaign, primarily in the print media in December.
The company has already begun selling microwave systems to the IDF and Communico, and is negotiating additional sales. Epsilon expects 100 microwave systems at a financial volume of $7 million to be sold in Israel by the end of 1997.
Ericsson is also beginning to sell access equipment that doubles the capacity of the copper wires in telephony systems, competing with Tadiran Telecommunications’ multigain systems, and Tadiran Telecommunications and ECI Telecom’s HDSL systems. Epsilon claims the products will be about 35% less expensive than local manufacture.
Ericsson, one of the world’s largest communications companies, had no business contacts with Israel for many years due to the Arab boycott, but it appears the company is now entering the Israeli market with fanfare and trumpets blowing. In January 1997, the company will have a large booth at the Telecom ’97 exhibition in Tel Aviv and will exhibit cellular communications systems.
Ericsson is offering the Ministry of Communications, about to publish a tender for the third cellular network operator, an integrated GSM, DCS 1800, and DECT system.