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The power of enterprise

In the 19th century, the inventor who discovered a new technology would also tend to become its owner and profit from its success. It was this direct link between innovation and enterprise that gave the telecommunications industry its shape and direction.

Leadership
The history of telecommunications is dominated by four different kinds of people who pushed forward technological progress, and changed the shape of the industry.

Some, like Graham Bell, were pure inventors only interested in technology for its own sake. The inventors set new benchmarks for what technology could deliver.

Others were primarily development engineers who took those possibilities and turned them into realities, using sound engineering and development skills. In doing so, they also created potential businesses.

That brought in the entrepreneurs. They weren't that interested in the technology but knew a business opportunity when they saw one.

Finally, there were the politicians, driven by ideology and conviction to bring about changes in the national or public interest.
Private enterprise
The telegraph began as a series of separate and private initiatives. The first lines were owned by railway companies and other organisations that sponsored them and by the inventors who developed them.

When the telephone arrived in the 1870s, it developed initially in the same way - as a purely private enterprise - driven only by the desire to grow and make a profit.

The force of public opinion

The second basic force operating on the telecommunications industry has always been public opinion. Whether state-owned or in private hands, operators cannot ignore strong and consistent criticism. When they have, their businesses have suffered - or they have found their control significantly reduced by regulation.

The telegraph debate - 1860s
Initial development of the telegraph followed the specific needs of railway, commercial and government users.

The pressures on the operating companies came from the establishment rather than from public opinion at large. So telegraph operators were being pressured from above rather than below.
The telephone dilemma
In Britain the telephone started out much as the telegraph did, in the hands of privately owned free enterprise. But a change of government led to the law being used to hinder the telephone industry growing in an unregulated or unlicensed way.

As a result the industry remained mostly in private hands but worked under a state licensing system, and successive changes of government just added to the confusion.

Even so, the telephone network somehow advanced remarkably effectively into the 20th century.
Bucking the system - 1970s
The system that evolved during the 1920s and 1930s was outdated, bureaucratic and sluggish. At the same time it was surprisingly inventive and far sighted. In short, it was heavy going - but it worked.

By 1939 our telecommunication networks were among the most advanced and efficient in the world. But financial pressures following the Second World War meant the state-owned system found it increasingly difficult to keep up with changing technologies and society.

By the 1970s public opinion, advancing technologies and rapidly changing society combined to make it time for change...

Economic factors

The third force operating on a telecommunications network is always money. Economic factors include the growth of markets, the availability of finance and investment, and the returns available to operators and investors. There are other economic factors at work as well - the place of the telecommunications industry within the manufacturing sector, and the implications that has for prosperity and employment.

A new industry
In Britain, a vast state industry developed around telecommunications. At one stage, the telephone service employed around 1% of the whole of Britain's working population - about 250,000 people.

From 1911 onwards, the introduction of new technology into the network was the prerogative of government. This meant the pace of investment would be driven by national and political priorities.

Political pressures

Telecommunications soon became vital to national prosperity - and to national survival. Therefore the business of wires and airwaves was always going to be high on the political agenda - and subject to political pressure. Over the years, that pressure has been felt in many different forms.

Pressures to centralise
For most of its life, the British telecommunications industry was dominated by government control. The move to centralise direction began with regulation of the telegraph in the 1860s, and then its nationalisation.

The telephone too was quickly brought under regulation and, following a take-over of the national trunk network, the telephone ended up almost entirely in the hands of the state as well in 1912. It would remain under government control until the 1980s. The reasons for that were practical, political - and strategic.

Even now, in the privatised era, the strategically essential nature of telecommunications means that the government still cannot quite keep its hand off the tiller.
Pressures to economise
The problem with a state-owned telecommunications network was that it was hostage to national fortunes. Britain ended the Second World War virtually bankrupt. There was little money in the public coffers to pay for post-war reconstruction - and almost none to spend on growing the telephone network.

Although Treasury spending limits had had a minor impact on growth since the government took over the telegraph in 1870, this serious restriction would visibly hold back the development of British telecommunications for the next 35 years.
Pressures to privatise
As the 1960s gave way to the 1970s, shortcomings state-owned telecommunications became increasingly apparent. The 'one size fits all' approach became increasingly irrelevant to people's domestic and business needs. Something else was needed.

There was also a big change in the political climate, with the election of a government committed to returning state industries to the private sector. Telecommunications was the first to be dealt with, with Cable & Wireless and then British Telecom being 'privatised'

This meant taking the network out of government hands and making it a business - freed from Treasury spending limits - but exposed to free market forces.

The international dimension

Little in telecommunications can happen in complete isolation from the rest of the world. By definition, the way a country runs its telecommunications network depends on its need for overseas connections, and its place in the wider, global telecoms world. Technologically, industrially and commercially, the way telecommunications developed in the UK was shaped by what was happening in the rest of the world.

Britain and empire
It is easy to forget that our telecommunications network was founded over a century ago, when Britain ruled an empire covering more than one quarter of the word's land surface.

The new technology of telecommunications coincided with the absolute high point of imperial power.

The telegraph, telephone and wireless networks became arteries fusing the empire together, with imperial needs defining the shape and control of overseas connections.
Looking Around
Having done much to invent telecommunications, the British rather tended to assume their system was automatically the best. The easy assumptions of technical and commercial leadership were not seriously challenged until the years after the Second World War.

During the 1950s and 1960s, however, it became clear that our telecommunications were not developing as fast and as efficiently as those of other countries. Once international comparisons began to be made, they became a prime force driving change ...
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Can you beat our games? Explode equipment to see what's inside, hear the changing sounds of telecommunications, see how telecommunications designs have changed over time or send an e-postacard.

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