Exactly 30 years ago, in early 1985, the UK heard its first mobile phone call when the son of the chairman of Vodafone called home from central London. Back then, the UK started off with just two licensees (the other being a consortium lead by BT) and with ‘mobile’ phones the size of small pit ponies (one of which would have been handy to carry it around).
The ‘look at my phone, I’m so cool’ aspect of mobile telephony began almost immediately. First, the cost was horrendous so if you had one it probably meant that your company had provided it because you were very important. Second, because of the first, they were most popular as ‘car’ phones, so a swanky car with a phone in it (and the driver openly chatting on it while driving) was just about as ‘look at my phone and car, I’m so important’ as you could get.
I remember at least one lunch and one of the diners arrived with one of the early suitcase sized mobile phones and ostentatiously set it down next to the table in case any important calls came through (I hear he was taken out and shot before he could finish a subsequent lunch).
Phone production was then mostly a shrinkage exercise right up to about the turn of the millenium when some of them became so small you could just about lose them in your small change… a tide which has now turned completely with the arrival the smartphone and the need to actually see what’s happening on the thing in high resolution.
But way back 30 years ago in the UK, mobile phones sort of fitted in with the general mood. They were what Yuppies displayed and Yuppies were the fruit of the 1980s deregulation, privatisation, and general “lets make loads of money” ethos. BT had just been privatised and de-monopolised and the mobile phone companies were set up as trailblazers for a new, competitive, agile, economic model. To that competitive end the two players - Vodafone and Cellnet - were network operators who were obliged to provide ‘airtime’ which was then sold on to retail airtime sellers who provided users with subsidised terminal equipment and tariff plans. That didn’t last (the big networks soon had the rules changed so they could control the whole thing - and make all the profits) but it was appropriate for the time. For one thing it lowered the risk for the network builders. What ‘risk’? I hear you cry. Wasn’t mobile a license to print money?
It was, but we didn’t know that then. This was pretty new territory and the whole thing could have been a money-losing disaster. At least with multiple airtime sellers you had multiple retail strategies, any one of which could have worked.
Would the industry have been better off had the UK regulatory authorities stuck to their guns and insisted upon a wholesale/retail split? I think it would. We may even be heading back to that model as EU competition policy forces consolidating telcos to incubate competitive MVNOs on their own infrastructures. And, in answer to the inevitable objection that straight-jacketing the Mobile Network Operators in a resale model would prevent diverse retail offers. Well, after 30 years in vertically integrated mobile there are NO diverse retail offers anyway. All the pricing and retail deal structures are strangely identical. Perhaps we should we go back to the future?
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