This was 20 years ago – can you believe it ?
On the 26th May 1992 the first GSM Mobile Handset worldwide was given Interim Type Approval (ITA) to connect to GSM networks. This was an ORBITEL 901 device from a manufacturer then co owned by Vodafone and Ericsson.
The Type Approval was challenged by Motorola which had received ITA for its product range on June 3rd 1992. Motorola at the time expressed surprise and argued that the Orbitel ITA did not complete all the tests defined by GSM operators or against a procedure ratified by the European Commission.
In this race to be first Mike Pinches, the MD of ORBITEL accepted that “there is an element of doubt” . This was all at a time when some GSM networks had been built but, beyond test devices, no GSM customer equipment was available to customers that could compete with the patchwork quilt of incompatible analogue mobile networks at the time .
It was also a period of instability. Some of the test equipment did not work consistently, the testing procedures were not fully accepted across Europe and roaming had not even started. This article marks those 20 years with a quick look back at the market 2 decades ago and illustrates how far we have come.
The Mobile Market
According to the Financial Times the Western European market embraced 5 million mobile subscribers on the 1st May 1992. Today it is 400 million. It was all analogue as the digital GSM devices were not approved or available to connect to networks.
In the UK some investment continued in analogue networks such as TACS as demand continued to rise . The FT estimated the UK market to be 1.2 Million subscribers, or 2.23% penetration of the population ( in contrast to around 85 Million or 130 % today). The UK market was at the time still the 2nd largest in the world, behind the USA and just ahead of Japan which was about to liberalise their devices market from being vertically integrated with the network operators.
The UK growth success was put down to many factors but certainly competition played a part, both at the networks level and at the services/distribution level. It also had benefits of an analogue system called TACS that was closely aligned with the US Analogue technology of AMPS.
There were 2 operators: Racal Vodafone and Cellnet ( now O2 UK ) but most European countries had limited choice as mobile was often run by the incumbent monopoly PTT`S . Notable exceptions to this rule were the Nordic countries where some network competition did exist but they did have long standing public radio service experience to serve deeply rural communities. This is where highest levels of customer adoption ( or “penetration”) in the world were to be found e.g. Sweden 7.19 % and Finland 6.17%.
Most devices had no screens and data had not really started at any meaningful scale for messaging or email, and certainly there was no Internet access or camera phones/ music players and the rest.
UK prices for mobile telephones in May 1992 (source: FT newsletter – 21/05/1992) were:
Several aspects stand out here – firstly the huge differences between dealer prices (after subsidy) and RRP; the names of the manufacturer market leaders then which have largely changed since in favour of new Korean, Taiwanese and America leaders; and the carphone oriented world in contrast to hand portables today. This largely changed with GSM and the consumerisation of the mobile markets across Europe in the late 1990`s .
However, even then the average weight of hand portable devices had some way to go towards wider portability from the 300 to 400 grams average back in 1992.
It is also easy to forget that the early 1990`s saw a proliferation of technologies which came with market liberalisation and the progress of technology.
The mobility choices included some private and public systems, but not all with the same coverage, device choice or pricing profile.
The main mobile options could be plotted against costs (low to high) and geographic mobility parameters :
Paging *; Cordless* (mainly CT2 and DECT); Private Mobile radio ; Cellular (analogue and Digital GSM + PCN) ; Satellite * (those marked * were public and private systems) .
The mobility choice was further extended though fixed line options. Solutions such as payphones, charge cards and hotel phones were largely considered as indirect competition .
However, alongside devices, the issue of geographic coverage was often seen as the key driver of demand i.e. where it was easy to make and receive a call .
The real advantage GSM was soon to have was based on international economies of scale applied to R+D reducing unit costs that in turn led to ever widening investment, coverage and handset choice.
By May 1992 some 30 European operators and countries such as Australia/NZ/Gulf states/Iran/India/HK/Singapore/S Africa /Cameroons were seen as early adopters of the technology by the GSM Association.
First year European Costs (US $) (Source BISMAC Q1 1992 ) – pre Digital
We often forget how far prices have dropped with GSM Digital technology and the consumerisation of mobile .
20 years ago the market was largely a business market based on business rather than consumer channels. It was completely analogue.
Taking the larger countries at the time we can see how the charges differed .
These first year costs (in US $) are based respectively on handset ( unsubsidised) ; access (1st Connection and 12 months monthly fees); and lastly airtime ( 90 minutes peak usage per month x 12).
Overall total Analogue first year costs : –
- France $2634/1304/1380 – total : $5320
- Germany $2619/566/1112 – total : $4297
- Spain $1787 /1004/540 – total : $3331
- Italy $1120 /641 /572 – total : $2333
- UK Cellnet business tariff $573 /684 / 641 – total :$1898
These comparisons are all analogue tariffs, and they exclude special consumer tariff options such as Cellnet Lifetime or early adopter GSM tariffs. Prepay tariffing did not exist until some 3 to 4 years later. The full impact of analogue/digital competition came much later .
We have come a long way in mobile in the 20 years since the first mobile device received Type Approval. The rise of mobile globally to over 6.3 Billion is quite remarkable, but could not have happened without those early experiences and experiments with competition and distribution. Much of the change can be put down to technological innovation and the economies of scale associated with GSM adoption globally.
The evolution from GSM into new frequencies and 3G/4G (or LTE) and dual mode Wifi continues to add more capacity and capability. 20 years ago it was a voice world. Internet and data services were essentially non existent. The language of texting and child internet safety had not been invented .
This revolution in communications still has a long way to go but back then in the UK choice was already evident, innovation and competition were its hallmarks.Mike Short President
The Institution of Engineering and Technology Vice President, Telefonica Europe