The World Reaches 4 Billion Mobile Phone Subscribers
The digital mobile phone is one of the greatest success stories in the history of technology. According to the International Telecommunications Union (ITU), there are now more than 4 billion mobile phone subscribers. (China recently surpassed the 600 million subscriber mark.) Digital technology has driven down the cost of feature-rich handsets and driven up the capacity of mobile phone networks. It’s generally believed that, globally, more people access the Internet from mobile phones than from PCs.
The dominant standard, GSM, was developed by committee in Europe and proved a boon to companies such as Nokia and Ericsson. It’s often said that a good standard is a prerequisite to market growth. That may be true, but there was another key factor that contributed to GSM’s success. GSM licenses were awarded to multiple operators in each country, putting the final nail in the coffin of the state-owned telephone monopoly. GSM also inaugurated continent-wide roaming, and the switch to digital enabled higher network capacity and rapid handset cost reduction.
Ironically, the U.S. was slower to develop and implement a digital standard because it had a coast-to-coast analog standard with plenty of subscribers. There was reluctance to fix something that didn’t appear broken. However, that was an illusion: back then subscribers were so desperate for mobile phone service that they put up with noise, dropped calls, and high prices.
Then a fight broke out over digital standards. The U.S. ended up with two standards. One was based on a technology (time division multiple access, or TDMA) similar to, but not compatible with, GSM. The other was an unproven technology, using spread spectrum radio, developed by San Diego-based Qualcomm. It is called code division multiple access (CDMA). Critics said CDMA wouldn’t work, and some even accused Qualcomm of fraud.
Today, there are over 500 million CDMA users worldwide. That would normally be a very impressive number, but it’s small when compared to the number of GSM users. However, even Europe chose CDMA as its next generation (third generation, or 3G) standard. So unless operators leapfrog to 4G standards, CDMA should enjoy significant growth over the next several years.
During the mid-1980s there was a big push by landline telephone companies to digitize the so-called “last mile.” Integrated services digital network (ISDN) would have enabled a host of end-to-end digital services. It never took off in the landline phone business, but it is very much in evidence in the mobile phone business. Today, many features that are extras for landline users are standard features on mobile phones, such as caller ID, three-way conferencing, and call waiting. Plus, mobile phones can do text messaging, take and upload pictures, and run applications such as games and turn-by-turn driving directions.
Digital wireless has also enabled wireless LANs, wireless personal area networks (WPANs), and the Global Positioning System (GPS). Each of these technologies had to endure a long gestation; now they are near-ubiquitous.
The Internet gave us speed-of-light markets and citizen journalists. Digital wireless is enabling us to take the Internet with us everywhere and at all times.