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Startac cellphone

Digital mobiles developed (1991)

The advantages of digital include clearer speech and more consistent data transmission. But in 1980, when the first cellular trials were made in Britain, digital technology was still in its infancy. The original UK networks of Cellnet and Vodafone both began as analogue systems.

The future however was clearly going to be digital and an international consortium of network operators and equipment manufacturers made plans for a universal digital cellular system known as GSM (Global System for Mobile Communication).

In 1991 the vision became a reality, when Vodafone launched its GSM mobile phone service, the first in the UK. Handsets cost in excess of £1,000 and were in short supply. Other operators held off until customer equipment was more widely available and cheaper, with One-2-One coming to market in 1993, Cellnet in 1994 and Orange soon after.

By early 2005, the GSM system was being used by a billion people on more than 200 networks worldwide. Even with today’s 3G and 4G networks GSM (often called 2G) is supported so older handsets can still be used.


The high cost of a mobile phone in the late 1980s.

The falling cost of mobile

Mobile telephones originally had a simple pricing structure - The phone was bought from the chosen network company and a contract was signed for the line rental (airtime) and call charges. There was no option to take the phone to another network nor to buy a phone from another source.

Simple pricing has all but disappeared with the mobile phone companies offering phones at subsidised rates in exchange for signing up for a long-term contract.

Before GSM the information identifying the phone to the network was built into the actual phone’s hardware and so could only be altered by the network provider. This restricted the choice of phones to those on offer by the network and so largely stifled competition. Part of the GSM specification was that this information had to be stored on SIM (Subscriber Information Module) cards. This allowed users to choose their phone from any source and change it at any time. It was still possible for the network provider to lock a phone to their own network but mostly this was only done on phones that were subsidised.

The first analogue cellular handsets cost £2,895 at 1985 prices with a monthly rental of £25. Calls were charged at 25p per minute which would be the equivalent of around £2.50 today.

In 1993 the first GSM handsets cost around £1,000 with airtime falling to £15 per month by 1995.

Today quite sophisticated phones can be bought for as little at £10 though the price of high-end smartphones is often in excess of £500 without a contract. High smartphone prices have not deterred people from buying them, for example, probably the most sought after smartphone is Apple’s iPhone with 137 million of the 4S version selling between its launch in 2011 and it being superseded in mid-2012.


BT Cellnet 'pay as you go publicity', 2000

Phones for all

In 1999 to tap in to the market of the occasional user, who didn’t want to be tied into a contract, mobile phone companies introduced pre-payment options or more commonly known as pay as you go. This particularly appealed to younger users and their parents who could provide their children with go anywhere communications without fear of racking up large bills.

Though, still popular today many people have been tempted to sign-up to contracts as these tend to be more cost effective for heavy users by offering inclusive talk time and text messages. More recently inclusive data has been included, a must for smartphone users wanting to access the internet.


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