Network Operators
– US Operators
– Great Britains Operators
Infrastructure Provider
– AT&T
– Ericsson
– Motorola
– Nokia
– Alcatel
– Siemens
Terminal Device Manufacturer

Analog Cellular Network Industry

Network Operators

With the first cellular network a new business came up: the mobile network operator. Until now, telephone network operators have viewed mobile communications systems as a natural extension of their fixed network. The new cellular network however became a network of its own. The basestations had to communicate with each other and with a central unit, building an own network. Nevertheless, in most countries this new network continued to be operated by the usual telephone network operators which where normally the PTTs. This was the case in all European and Asian countries. There were two exceptions: the USA and Great Britain.

US Operators

When the FCC released spectrum for AMPS, it was determined that there should be two carriers or network operators. One should be operated by the local telephone provider, one of the seven Baby Bells. Instead of a monopoly like for the telephone network, there should be a duopoly. Why not more than 2? The limitation came from the spectrum. There was not sufficient bands available to allow for more than two parallel operators.

So, another private provider (beside a local bell company) could apply for the other license. Licenses were issued for metropolitan regions called Metropolitan Statistical Areas (MSAs). 306 of them were spread across the USA. A “beauty contest” was conducted, i.e. the companies applying had to submit an offer and business plan and FCC would decide. This created a huge interest. Thousands of companies applied and the FCC was forced to abandon its “beauty contest” and decided to simply raffle off the licenses. Countless licenses were awarded between 1984 and 1986. All rural regions were also added later. This created a patchwork of local operators in the USA and there was competition between two operators at a time.

With AMPS, a duopoly for mobile communications was established in the USA. It was the birth of the first private mobile phone operators.

Great Britains Operator

In Great Britain, the privatization of the PTT was strongly promoted by Margaret Thatcher’s policies in the 1980s. Post and telecommunications were separated and put on the stock exchange. The telecommunications company operated under the new name BT (British Telecom). Before a cellular standard was even established, the British government already determined that there should be two competing operators, like in the USA. One of them should be operated by BT. BT joined forces with a security company Securicor and founded Telecom Securicor Cellular Radio, which was later simply called Cellnet. Several British companies applied for the second license. Ultimately, a consortium led by Racal, along with Millicom and Hambros Advanced Technology, won. Racal was a manufacturer of radio equipment such as radar, mostly for military applications. Racal-Millicom later called itself Racal Vodafone (Voice Data Telephones) and finally just Vodafone.

When the licenses where granted it was not even known, what kind of cellular system should be used. Finally the decision was made that AMPS should be the technology on which the system would be built. As mentioned, the frequency bands had to be adjusted and the system was called TACS.

Vodafone was the first European private network operator.

The advantage of TACS was that there were providers for infrastructure and devices. Cellnet commissioned Motorola to build the network, Vodafone commissioned Ericsson.

The competitive situation in Great Britain meant that the cost of a mobile phone and a subscription fell very quickly and the number of users rose sharply. In 1991, shortly before the introduction of GSM, Great Britain had three times as many users as Germany or France (2% instead of 0.7%).

Infrastructure Provider

The new cellular system required equipment for the network. Those were the Basestation with the corresponding processing units, network (switching) technology and the central processing units, the mobile switching units. Basically two skills where required: Switching technology similar to the fixed telephone network technology and complex radio technology for the basestations.

Almost 80% of the worldwide mobile network infrastructure market of 1990 was owned by three companies:

• Ericsson 33%
• Motorola 23%
• AT&T 18%

The rest was shared by the Nokia which was a rising star on the international market and the national PTT providers like Alcatel and Siemens.

AT&T

AT&T was no longer an operator for cellular systems. However, through Western Electric it was a key provider of Infrastructure. It had the digital switching technology and was also able to create cellular base stations. AT&T focussed only on AMPS and only on the US market. For that reason it had a smaller share of the world wide cellular infrastructure market.

Ericsson

Ericsson had the best conditions for entering the mobile phone business. As mentioned, Ericsson had a leading position in digital telephone switching systems, which were also needed for mobile networks. They also had the necessary radio technology with their involvement in SRA (Svenska Radioaktiebolaget). However, Ericsson did not only focus on NMT, but was also involved in AMPS and thus also in TACS from the beginning. Ericsson built the TACS network for Vodafone in the mid-1980s.

In 1983, Ericsson took over SRA completely, thereby establishing the Ericsson Radio Systems unit (ERS). In 1986, ERS was divided into radio equipment for infrastructure (systems) and end devices (terminals).

Motorola

Ericsson came from telephone infrastructure and expanded its competence into radio and terminal devices. With Motorola it was the other way around. They came from terminal devices and also built radios and televisions for the consumer market. In the early days of mobile communications, they also developed mobile technology and were active alongside AT&T in defining and introducing AMPS. They were weak however when it came to digital switching systems, which they had to purchase elswere. Nevertheless, Motorola had a strong domestic market in the USA and was building AMPS networks there. In Great Britain the build the TACS Network for Cellnet.

Nokia

Nokia was quite late in the telecommunication market. After the war, Nokia was a company with three divisions: wood, rubber and cable. The cable business grew into an electronics business that also dealt with computers and televisions.

In the 1960s, the Finnish PTT founded a company called Televa Oy. This was supposed to focus on the development of digital switching systems, which was becoming increasingly important at the time and Finland wanted to become independent of suppliers such as Siemens, Ericsson and Alcatel. Televa Oy worked closely with Nokia Electronics. In the mid-seventies, Televa Oy ran into financial difficulties because funding was running out for political reasons. Nokia came to the rescue and took over 50% of Oy. Now the company was called Telefenno Oy. In 1987 Nokia took over Telefenno Oy completely. Thus, Nokia had switching technology.

In the mid-1970s, Nokia also entered into another collaboration with a leading electronics manufacturer in Finland: Sonora. Nokia agreed with Sonora that Nokia would build base stations while Sonora would build the corresponding terminals (car phones). In 1979, the Mobira company was created from Sonora.

Alcatel

Alcatel has its roots in the French technology group Compagnie Générale d’Electricité (CGE). CGE, founded in 1898, was the French counterweight to Siemens, AEG and General Electric. Similar to Siemens, CGE had various business areas. For example, one famous area led to the construction of the TGV high-speed train in the 1970s. CGE’s telecommunications division began building digital switching systems in the 1970s and thereby gained a certain market position.

In 1986, ITT decided to exit the European telecommunications market. It sold its business to CGE. CGE was now called Alcatel-Alsthom. Alcatel was originally a small telecommunications company that CGE had bought some time ago. The name cam from „Société Alsacienne de Constructions Atomiques, de Télécommunications et d’Electronique (Alcatel). Alsthom was the manufacturer of the TGV. The areas were later separated and Alcatel became an independent infrastructure manufacturer but also built terminal devices.

Siemens

In the mobile communications sector, Siemens was primarily focused on the German C-Netz. They originally designed the C-Netz. But they also manufactured the infrastructure equipment and terminal devices. However, the C-Netz market was small. Only South Africa and Portugal used this system. Siemens was unable to establish itself in the other standards, NMT, AMPS and TACS, which weakened its position in the future mobile communications market.

Terminal Device Manufacturer

The first devices that were built for the cellular system were car telephones and “portables”, i.e. car telephones that could be combined with a battery and take out of the car. Initially, Japanese manufacturers were involved in the market. But the market was dominated by Motorola and Nokia.

Hand-held devices appeared relatively early in the AMPS market. Motorola first came onto the scene in 1984 with the DynaTAC. This was basically the phone that was used by Martin Cooper in 1973. But this time it was a true cellular phone that could be mass produced.

Beside Motorola a newcomer from Great Britain called „Technophone“ established itself. By using advanced PCB (Printed Circuit Board) technology Technophone was able to create very small devices. The PC105T came out back in 1985. Soon Technophone became the leader in the handheld device market in Europe. In 1991, Nokia bought Technophone, becoming the largest manufacturer of handheld devices in the world, ahead of Motorola.

Other handheld device manufacturers included Mitsubishi, Sony, NEC and finally Ericsson. Shortly before digital mobile communications began, all of these manufacturers already had experience in the field of compact mobile handsets.