Over the last half-century, the mobile phone industry has been a model and a mirror for the world. The model was the future, a crisp idea of how things might be if inventors, governments, corporations and individuals could imagine and reach for it. The mirror was the present, the world as it is, a messy product of technology, power, business and culture that never stood still.
When the first mobile calls were made in the 1970s, there were staggering differences in the level of access to (landline) telephone services and how they were delivered. The United States had thirty-three telephones per hundred people at the beginning of that decade. In Africa, the figure was “trivially low,” and still just 1.5 nearly twenty-five years later.
Some telecommunications equipment like network switches and handsets was traded internationally, but a good deal was produced domestically, with global patents embedded in distinctive local designs. Although a United Nations agency coordinated international regulation of the business, services in most countries were offered to customers through unique, national enterprises, controlled and financed by governments. Customers could place calls across borders but most of the traffic was local and interstate.
The model for the future was open borders and less state involvement. More equipment would be traded across national boundaries, sourced from fewer, larger factories where global manufacturers would centralise production. Globally endorsed principles would smooth away the idiosyncrasies of national regulation and policy. Privatised state-owned enterprises, stripped of their monopolies, would allow telecoms corporations to expand into other national markets. These incumbents and new entrants would be able to target global customer bases. As people and businesses crossed borders more easily and frequently, the telephone would host more global conversations.
In sum, technologies, policies, institutions and practices would coalesce. The devices and the rules, the companies and the customers, would all look and act more like each other.
The mobile phone helped to make much of this happen. It did it in numbered waves — 1G, 2G, 3G, 4G, now 5G, and soon enough 6G — each one a generational transformation in technology that provided a decisive opportunity to disrupt policies, organisations and practices. Daniel D. Garcia-Swartz and Martin Campbell-Kelly chart the first four of these generations in Cellular: An Economic and Business History of the International Mobile-Phone Industry.
The early mobile licences in the 1980s gave governments a felicitous opportunity to introduce competition for their mainly state-owned incumbents. The second (digital) generation, in the 1990s, helped to reduce the cost of what had been a premium service, making mobile a consumer proposition even in developing countries, where billions of people were finally able to make phone calls for the first time. “2G” also added text messages to the functionality of mobile “phones.”
Hotter demand for radiofrequency spectrum encouraged governments to change the way they allocated and charged for it. Mobile operators bid fabulous sums in the early 2000s to acquire the spectrum they wanted for the next generation of technology that promised the-internet-on-your-mobile. 3G did not quite deliver this but the “smartphones” created to capitalise on it accelerated demand for a technology that would. That was 4G, adopted commercially in Scandinavian countries in 2009 and by Vodafone and others in Australia a few years later.
If there was a time when the idealised model of mobile telephony came close to matching the reality revealed in the mirror, this moment in the early 2010s might have been it. The distribution of mobile services around the world now looked more like the distribution of people. China and India dominated both. In 1990, the United States had led the world with five million mobile services. By 2010, China had 859 million and India 752 million. US numbers had grown too but were now well behind, with 285 million. Most of the other places in the top ten were taken by countries like Russia, Indonesia, Brazil, Vietnam and Pakistan, rather than the Europeans and North Americans that led in 1990.
Mobile operators around the world were adopting a single technical standard for 4G (essentially), Long Term Evolution, or LTE, not multiple ones as they had done with previous generations. Mobile market structures looked similar in many places that had introduced services at quite different times. Competition existed almost everywhere, though there was not as much as regulators would have liked. Oligopoly had become the global fashion: early adopters like the United States and Britain, where multiple competitors had started up, were experiencing consolidation; late adopters that began with single operators now had sustainable rivalry.
Multinational corporations with mobile operations spanning many territories (like Singtel, owner of Optus, and Vodafone) were now the norm; those mainly focused on a single national market (like Telstra) were the exception. Mobile telephones had become everything devices for everyone, everywhere. No longer just tools for conversation and texting, they were cameras, diaries, contact books, money machines, street directories and maps, tour guides, health monitors, entertainment screens and much else.
The moment was not perfect and in any case it didn’t last. As some forces were stimulating the convergence of technologies, policies, institutions and practices, others were pulling them apart. Perhaps most striking has been the fall and rise of the corporations delivering different elements of the equipment and services that make up the mobile business.
In the mid 1990s, Ericsson, Nokia, Siemens and Alcatel, all based in Europe, and Motorola, headquartered in the United States, together supplied between 80 and 90 per cent of the world markets for 2G (GSM) base stations, switching systems and handsets.
Ericsson is still Ericsson, a telecoms equipment giant, supplying 5G and other equipment to Telstra and many operators around the world. It is already “well underway” with research on 6G, which it hopes will deliver “truly omnipresent wireless intelligence” early in the 2030s. But Nokia, Siemens, Alcatel and Lucent progressively merged into what is now Nokia Networks. And Motorola split into two: “Motorola Solutions,” still based in Chicago, concentrating on “public safety and enterprise security”; the mobile device business sold to Google and then — minus many of its patents — to Lenovo.
Lenovo is one of several Chinese companies, all of them established in what Garcia-Swartz and Campbell-Kelly call the “first wave” of Chinese entrepreneurship in the 1980s, that became global communications equipment behemoths. Two others, Huawei and ZTE, both founded in Shenzen, used their success in the local market as a platform for international expansion. By the mid 2010s, they were “diversified telecommunications conglomerates that had transformed the world telecommunications-equipment market.” In 2018, Huawei was the global cellular infrastructure market leader, with 31 per cent market share, ahead of Ericsson (27 per cent), Nokia (22 per cent) and ZTE (11 per cent). They are now “among the world leaders in 5G-related intellectual property.”
The market for mobile handsets has also been upended. Each generation of mobile technology spawned winners and losers. Success, even dominance, in one era didn’t guarantee so much as survival in the next. The most disruptive changes came with smartphones, first deployed over 3G and then on 4G networks. These brought new names to the mobile industry and big changes to the inner workings of phones. Smartphone operating systems and the more sophisticated “baseband” processors needed to drive increasingly complex phones became discrete fields of competition. Some of the biggest winners were companies outside the traditional telecommunications industry which levered their assets, skills and capital into these new fields.
When Apple released its first iPhone in 2007, mobile phones using the Symbian operating system (co-owned by Psion, Nokia, Ericsson and Motorola) had nearly two-thirds of the market. Six years later, Symbian had virtually disappeared. The iPhone had changed the world but it had not overrun it. Around 15 per cent of global handsets sold in 2013 ran Apple’s iOS operating system; nearly 80 per cent were running Google’s Android, released the year after the iPhone.
Manufacturers paid no licence fee to incorporate Google’s open source operating system into their handsets. One of them, Korea’s Samsung, increased its share of global handset sales from about 3 per cent in 2009 to around 30 per cent three years later, according to Statista, as sales by the early smartphone leaders, Nokia and Blackberry, collapsed. A decade on, Samsung sold around 22 per cent of the smartphones shipped across the world in the first quarter of 2023, and Apple 20 per cent, while three relatively young Chinese brands, Xiaomi, Oppo and Vivo, accounted for a total of around 29 per cent.
The story doesn’t end in China, nor even in Asia. The “new frontier for cellular carriers and equipment manufacturers,” say Garcia-Swartz and Campbell-Kelly, is Africa. Here, the mobile phone network operators provide a remarkable illustration of that continuing confluence of technology, power, business and culture.
A “first wave” of private mobile operations came from three “emerging-market multinationals” created and headquartered in Africa — Telcel (Zaire), the enterprise that eventually became Celtel (Uganda) and MTN (South Africa). A few European operators had a “modest presence” in the 1990s, including Vodafone in partnership with incumbents in South Africa (Vodacom); the British Cable and Wireless in MTN; France Telecom in former French colonies like Ivory Coast and Senegal. Then mobile operators from the Arabian Peninsula, including UAE-based Etisalat, expanded into Africa in the 2000s by buying stakes in existing operators and launching services in other territories. In the 2010s, Indian operator Bharti Airtel acquired the operator that had taken over and expanded Celtel.
By 2015, the Big 5 mobile constellations in Africa were MTN, Bharti Airtel, Vodacom, Orange (France Telecom’s rebrand) and Etisalat, an eclectic mix of homegrown enterprise, colonial continuity and neighbourhood expansion.
The rise of China and its corporations also, eventually, provoked a political and strategic backlash that is unpicking physical and commercial networks, especially in telecommunications. Australia effectively banned Chinese telecoms equipment makers Huawei and ZTE from supplying equipment for the National Broadband Network in 2012 and local 5G networks in 2018.
New, celebratory buzzwords like “reshoring” and “friend-shoring” have been coined for the partial dismantling of the globally dispersed manufacturing supply chains once trumpeted as the apogee of a global age. The annual reports of the “communications access coordinator” established under Australia’s 2018 Telecommunications Sector Security Reforms identify “complex multi-vendor/subcontractor, multi-jurisdiction supply chains” not as economic marvels but as misunderstood security risks.
Mobile data traffic and 5G subscriptions are swelling around the world, but Ericsson forecasts overall mobile subscriptions to grow only modestly over the next few years. Global smartphone shipments in the first quarter of 2023 were 13 per cent below the figure in 2022 and “red cap” (reduced capacity) devices have been announced. Mobile operators are struggling to generate adequate returns on the needed investment: a recent report from Venture Insights (commissioned by Optus) warned of a “digital investment gap” between the capital required to upgrade networks to support surging usage and the revenues earned from customers hooked on falling prices or increasing value from their mobile plans.
In the late 1990s, a black-clad IT consultant told me what was needed to bring my small legal centre’s computer network up to the cusp of the twenty-first century. He was right about almost everything: desktop iMacs and email for all staff; ethernet to connect us. It seems embarrassingly obvious in retrospect.
It was so obvious to the consultant that he took almost no notes. The few he needed were composed with an electric pen, magically applied to the screen of a small device he held in his other hand, an Apple Newton. Crestfallen, I realised we couldn’t afford The Future after all.
Apple’s Newton was eventually buried in the deepest grave the 1990s offered for devices and practices that missed their moment: parodied in an episode of The Simpsons. Steve Jobs killed it off when he returned to Apple for his “second act.” The idea of interacting with a handheld screen without using a keyboard was great; this iteration was expensive and unreliable. Newton came to be seen as an interesting but ultimately comical wrong turn on the road to the touchscreen smartphones that took over the mobile communications world in the 2010s.
The regular, generational rhythms of mobile personal communications from 1G to 6G paint a misleading predictability across the surface of this capricious industry. Messages are exchanged seamlessly within and across borders and cultures, while power and profit draw technologies and institutions into fickle, fragile forms. •
Cellular: An Economic and Business History of the International Mobile-Phone Industry
By Daniel D. Garcia-Swartz and Martin Campbell-Kelly | MIT Press | US$45 | 387 pages
