Inside the Mobile Revolution
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Inside the Mobile Revolution A POLITICAL HISTORY of GSM Europe's most successful industrial policy intervention – propelling mobile phones into the hands of over 4 billion people STEPHEN TEMPLE CBE 1 2nd Edition Copyright © Stephen Temple 2010 May be used free of charge but may not be changed in any way or used in part or in whole in another published works in whatever medium without the author's permission 2 Foreword Over the period 1984-87 the political and strategic direction of GSM was being shaped by France, Germany, Italy and the UK. It was the genesis of the mobile revolution. This is the UK record of what happened, how it happened, why it happened and captures the political dynamics within which it all took place. The GSM 1800 MHz (PCN) element was added a few years later when the UK's DTI was at the leading edge of telecommunications liberalisation and I propelled it to be the first credible entity to set out the vision of the personal mobile phone as a consumer product (‘Phones on the Move’) and put forward the conditions to make it happen. My election as Chairman of the Technical Assembly of the European Telecommunications standards Institute in 1988 then provided an excellent vantage point as GSM went through its transition from a policy to a new born infant digital mobile industry. All this left me sitting on a unique (although in parts partial) account of how GSM came to be the mobile radio equivalent of the cosmic “big bang” and one of Europe's most successful high technology projects. The GSM element of this account was written within 12 months of the signing of the GSM MoU in Copenhagen in 1987. I had no motive to spin the story in any particular direction or make any particular claims for the success of GSM, which was still a few years away from even getting off the ground. It was simply a means of unwinding on holiday in the French Alps from a tumultuous 18 months by recording to paper what I had just seen and been through. It went straight into a drawer. Shortly after the launch of GSM (in 1991) would have been an ideal time to publish the story. A close friend and former DTI colleague Jonathan Phillips stayed up one night and read the manuscript. His red ink over the draft said it all. There was no way it would have got official approval for publication without ripping out the very heart of the story – the political dynamics. The story was to remain hidden behind the Official Secrets Act for the next 17 years gathering dust. The manuscript was next visited in 2008. Europe's leadership in mobile radio had largely been ceded to other parts of the world. So much had gone wrong and some of this had been driven by the changing role of European governments and regulators. I decided to try to publish my GSM personal account to show how things had worked successfully in the 80's as part of an analysis of how things were working (or not working) in 2008. This was pre-empted when Lord Carter invited me to sit on the Digital Britain Steering Group in 2008. Rather than drafting my analysis I finished up drafting the infrastructure section for Lord Carter for his Digital Britain report. It was fun and it simplified what to do with my GSM account. It just needed to be a public record of an important event in Europe's industrial, social and political history. No longer would everyone know how the PC and World Wide Web revolutions had come about (with over 1.3 and 2.5 billion users respectively in 2010) but know very little about how the even more successful mobile revolution had happened (with over 4 billion users in 2010). Finally the curtain would be pulled back on how GSM created a mobile revolution. 3 Prior to publication I shared a draft version with former colleagues who had worked closely with me on the GSM project at the time. Some colleagues took exception to parts of the account relating to the period 1984-87. I was asked to change some things and delete others. A lively exchange of e-mails followed. Armin Silberhorne, a former senior German Official I had worked very closely with, best summed up the different viewpoints with his comment that a “political” account will always be seen differently through different eyes. This was very insightful. Officials at the time from France and Germany would view GSM through the eyes of those working in a state monopoly, with a Minister fully in charge – an ordered world in which engineers sought the best technical outcome…with the power to make it happen. Deregulation was still around the corner for them. The UK had already unleashed competition. In a competitive market nobody is in charge. I could see all the market and industrial forces tearing the GSM initiative apart … for the UK…GSM was a huge political challenge. In this respect the UK brought a unique contribution to the GSM initiative since, by the time GSM was launched in 1991, mobile competition had become almost the norm across the European Union. Those who may only want to read this account with an eye to seeing if Europe could create another GSM success today should fast forward to Chapter 24. Certainly the Global Banking Crisis has shattered the belief that everything is best left to pure market forces and there is much to be re-discovered in this book about the lost art of EU inter- governmental intervention in mobile communications infrastructures that Europe used so successfully to launch GSM in 1991. Stephen Temple CBE 20th January 2010 4 Contents Page Chapter 1 - An unpromising start 7 Chapter 2 – UK Seeds of the new beginning 10 Chapter 3 - Getting the UK's industrial act together 15 Chapter 4 - The tripartite agreement on digital cellular radio 17 Chapter 5 - Berlin GSM - blood on the floor 19 Chapter 6 - The quadripartite agreement 23 Chapter 7 - Getting our man into the seat 30 Chapter 8 - GSM frequency channels and the deluge 32 Chapter 9 - Mrs Thatcher & the EU Council get involved 36 Chapter 10 - The technology choices – the easy bit 41 Chapter 11 – Vodafone’s second assault on the GSM channels 45 Chapter 12 - The road to Madeira 47 Chapter 13 - A week in Madeira can be a long time 52 Chapter 14 - It never rains but it pours 58 Chapter 15 - Manoeuvring behind the scenes 63 Chapter 16 - Pattie defuses the UK GSM frequency channel row 71 Chapter 17 - The turning point - Bonn meeting of Ministers 74 Chapter 18 - The GSM MOU - GSM gets a turbo boost 76 Chapter 19 - From GSM to Personal Communications Networks 80 Chapter 20 - From consultation to competition 86 Chapter 21 - GSM's expanding universe 91 Chapter 22 - Unintended consequences 99 Chapter 23 - GSM and the 7 mobile radio revolutions 104 Chapter 24 - Could Europe create another GSM success? 109 Chapter 25 - A Footnote in History 113 5 6 Inside the Mobile Revolution Political History of GSM (A personal account from the UK perspective of Europe's most successful high technology project that propelled the mobile phone into the hands of 4 billion people) Chapter 1 AN UNPROMISING START Mobile phones are commonplace now. In the 1970's they were associated in the public's mind with Rolls Royce cars. Not without reason. They cost £5,000 to buy and a lot to run. A truly elitist service. Even at these prices the British Post Office had a long waiting list of people wanting a service and it only connected cars to the telephone network and not people. More radio channels were needed to expand the service. The conceptual break through came out of the famous ATT research labs in the USA. The land would be covered in a honeycomb cell like structure of radio coverage areas. The necessary number of radio channels would come from re-using the same channels again and again (say every 3rd or 5th radio cell). The idea was presented to the FCC in a paper in 1971 by Joel Engel, Richard Frenkiel and Philip Porter called "High Capacity Mobile Telephone System Feasibility Studies and System Plan" However the problem with such a plan was that a car might pass across several such radio coverage cells during a telephone call. What a nuisance if the telephone call was lost each time and the customer had to re-dial the number. Advances in microcomputers provided the practical solution. Calls were automatically handed over from radio cell to radio cell without the customer knowing. Cellular radio was born. The Scandinavian countries were the first in Europe to make a commercial success of cellular radio. The French and German Governments tried to organise a joint effort to secure an industrial lead. The idea was for their respective industries to design a new version of the analogue technology and for the two countries to then put it into service. They tried to tempt the UK to join this endeavour. For a brief period the UK flirted with the idea. But a new thinking was sweeping through the UK. The Government was intent on introducing competition at the earliest possible moment. They selected Cellnet (a joint venture between British Telecom and Securicor) and Racal Vodafone (referred to just as Vodafone in the rest of the account) to be the two UK national cellular radio operators. A variant of the established USA analogue technology won the day.