Daniel Eran Dilger in San Francisco
Random header image... Refresh for more!

How AT&T Picked Up the iPhone: A Brief History of Mobiles

How AT&T Picked Up the iPhone: A Brief History of Mobiles
Daniel Eran Dilger
How was it that AT&T ended up the iPhone’s exclusive carrier? Here’s a historical overview of how things developed in the US mobile industry, from AT&T’s first cellular phones, to its removal as the American telephone monopoly, the breakup, regroupings, and its recent reinvention as the brand delivering Apple’s iPhone.


Separated at Birth.
Tech rumor site Gizmodo recently pleaded with reader to boycott the iPhone because of its association with AT&T, but it should have done some homework before spreading that particular bit of iPhone panic. Today’s AT&T is no closer related to the old AT&T than Verizon Wireless is; both grew from the same root.

Many have complained that AT&T offers troublesome service, but finding any mobile service provider that isn’t a mix of evil and incompetent seems to be quite impossible. As an introduction to a future article looking at the alternatives to using AT&T mobile service with the iPhone–and the technology issues involved–here is:

A Brief History of Mobile Networks.
Worldwide, mobile networks developed very differently in the three major mobile phone markets of Europe, the US, and Japan. Originally, all US mobile service was supplied by Advanced Mobile Phone Service, a subsidiary of AT&T, which at the time held a monopoly in providing all American phone service.

1G Mobile networks: AT&T’s Bell Labs introduced the first generation of cellular mobile phones in the early 80s using an analog protocol also called AMPS. If you ever owned a standard analog mobile phone in the US, it used AMPS. Prior to AMPS, only there were only radio phones, walkie-talkies, and pagers.

In 1983, AT&T was split into seven regional Baby Bells. After the breakup, the FCC created a competitive mobile market by licensing two blocks of frequencies to carriers across the US, one typically to the local Baby Bell phone company and the other to an independent carrier. Mobile users could jump between the A and B carrier, using their phone across different networks even when roaming into territories served by other companies.

A major problem with AMPS was that it provided no security. Anyone with a radio scanner could eavesdrop on mobile conversations, and it was fairly easy to spoof another subscriber’s phone, billing calls made from a cloned phone to the victim’s account.

2G Mobile networks: A digital version of AMPS helped boost call quality and expand service capacity by using the radio spectrum more efficiently. This D-AMPS system ushered in the second generation of digital mobile phones in the US, and was commonly referred to by the name of its radio modulation technology, TDMA. It also introduced some additional security.

The earlier analog version of AMPS used FDMA radio technology. The new digital cell phones could handle both, allowing them to fall back to using analog AMPS when roaming out of the digital service coverage area. All of the Baby Bells sold AMPS phone service, making it the ubiquitous US mobile phone service into the early 90s.

My first mobile phone was a Motorola “digital personal communicator” from CellularOne in 1994. Equipped with the super slim battery, I couldn’t imagine how mobile phones could ever possibly get any slimmer than this one.

 Rd Rdm.Tech.Q3.07 A7Ae855A-5350-4Cfe-A83B-19658178Bc79 Files Cimg7390

As mobile phones began to rapidly grow in popularity, the FCC began to open up new radio bands. Users then had to make sure their phone supported the bands used by their carrier in their coverage area. Competition also opened up new and incompatible mobile networks beyond AMPS, each of which offered various advantages.

Motorola introduced its own TDMA mobile system called iDEN, used in Nextel’s push-to-talk phones. Despite using the same TDMA radio technology, the system was completely incompatible with AMPS, relegating iDEN phones to only work with iDEN providers. The iDEN standard became popular in niche markets for its unique walki-talki functionality, which other mobile systems lack.

Qualcomm introduced its own 2G rival to AMPS in the US, based on CDMA radio technology. It is now called cdmaOne. Sprint referred to it as Digital PCS, and it is frequently called CDMA to distinguish it from the TDMA system used in mobile networks supporting D-AMPS and iDEN.

My 2000 Motorola StarTAC from Verizon Wireless featured dual band service and could pretend to access the Internet. It was better at charging access fees than actually providing any useful access to information however. Paired with a Palm Pilot, it was a fearsome combination of wired utility, although syncing data between them using IntelliSync and serial cables on a PC was a bit maddening.

In 2004, I got a Palm Treo 650 from Sprint, which paired a Palm to a CDMA phone. It promised to sync a bit better using USB, but its HotSync software is pretty awful. Here it is with its favorite dialog box:

200710282119

By the late 90s, mobile networks in the US were getting built out in a variety of incompatible standards, with TDMA, iDEN, and CDMA networks all vying to attract customers.

The European Community prevented a similar proliferation of incompatible mobile standards from splintering service and handset markets across its various countries by starting work its own TDMA system called GSM. Like iDEN, it was also incompatible with AMPS in the US, despite using a similar radio technology.

GSM was spun off into an independent standards body and is now represented by a trade organization called the GSMA. It quickly became the standard in Europe, and subsequently spread across much of the world.

The GSM vs CDMA War.
European mobile phone hardware giants Nokia and Ericsson back the GSM standard, while Qualcomm has worked to push its CDMA technology in the US, Asia, and in Central and South America.

GSM vs CDMA

In 2003, California Congressman Darrell Issa famously tried to advance Qualcomm’s interests by pushing a bill that would have rebuilt Iraq using CDMA, making it an incompatible island in a Middle Eastern sea of GSM users.

Issa represented specific American financial interests by associating GSM with France at the height of Freedom Fry hysteria, but even Motorola advised that Iraq would be best rebuilt using GSM.

Issa didn’t succeed with his bill, but the war between Qualcomm’s CDMA and GSM over mobile networks continues throughout the world, with reinforcements being delivered on each side at regular intervals.

2.5 & 3G Mobile networks: During the 90s, while Europe largely standardized on GSM, mobile service in the US splintered between a few adopters of GSM and rivals aligning behind the minority iDEN and the more popular cdmaOne.

• Qualcomm delivered an upgrade to cdmaOne called CDMA2000, which has since been upgraded with the 3G EVDO data service.

• The GSMA introduced GPRS and then EDGE data service for GSM networks, followed by high speed 3G UMTS, which is based on W-CDMA radio technology. Despite sharing CDMA radio technology, W-CDMA is not related to or compatible with Qualcomm’s CDMA2000, just as the various 2G TDMA systems shared little in common.

One Parent, Seven Babies, Family Feud.
In the US, mobile providers began choosing between the two main network families about a decade after AT&T was split up, just as the first generation of mobile systems began needing a replacement.

The seven US Baby Bells grew back together in a series of acquisitions and mergers, resulting in today’s two largest mobile providers, Verizon Wireless and “the new” AT&T. Verizon supports Qualcomm, while AT&T is GSM.

Bell System

The independent Sprint/Nextel and T-Mobile, the third and fourth largest US mobile companies, are similarly split between support of GSM and Qualcomm. After buying Nextel, Sprint announced plans to actively migrate its acquired users away from iDEN, a plan that will reduce the variety of incompatible networks in place in the US.

The Top Two US Qualcomm/CDMA aligned mobile providers:

• Verizon Wireless (Formerly Bell Atlantic, NYNEX, GTE)
• Sprint/Nextel

The Top Two US GSM aligned mobile providers:

• AT&T Mobility (Formerly Pacific Bell, BellSouth, SBC, Cingular)
• T-Mobile

200710282123

AT&T and the iPhone.
After Apple revealed its exclusive partnership with AT&T Mobility–at the time known as Cingular Wireless–to deliver the iPhone, rival Verizon Wireless announced that it had been approached by Apple about an iPhone deal and turned it down.

According Verizon Wireless executive Jim Gerace, Apple wanted a cut of Verizon’s monthly service fees, veto power over how and where iPhones could be sold, and control of the customer service relationship for iPhone users. Why did Cingular agree to terms Verizon rejected?

As the largest GSM provider in the US, Cingular desperately needed a fancy phone to lure in new subscribers. In 2004, Cingular purchased AT&T Wireless, which was then the third largest US carrier and the other large US GSM provider after Cingular. That made the combined Cingular/AT&T Wireless the largest US GSM operation by far.

In order to obtain AT&T’s wireless business, Cingular had to pay a huge premium to outbid European GSM heavyweight Vodafone, which intended to buy up AT&T and turn it into its own American GSM operation.

Vodafone owns nearly half of Verizon Wireless; it had planned to sell its remaining ownership to Verizon and go solo in the US after acquiring AT&T’s GSM infrastructure. Instead, Cingular bought up everything, making it the largest US mobile provider, and the only large GSM provider.

T-Mobile, while big in Germany, is only about a third the size of Cingular in the US. Owning the US GSM phone market meant Cingular needed unique phones to garner consumer attention in the market.

Verizon and Sprint were regularly gaining exclusive access to the most anticipated phones; Sprint got the first Treo 650, and Verizon signed up the LG Chocolate, for example. That left AT&T desperate for a hot GSM phone, because most GSM phones are targeted at the European market, and either don’t work well or at all in the US.

GSM SIMs, Activation, and Locking.
How the iPhone is linked to AT&T, the possibilities for existing or future versions of the iPhone to support other domestic or international networks, and what’s involved in using it without mobile service at all will be considered in the next article.

What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas.

Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

Technorati Tags: , , , , , ,

6 comments

1 Canalys, Symbian: Apple iPhone Already Leads Windows Mobile in US Market Share, Q3 2007 — RoughlyDrafted Magazine { 12.14.07 at 5:39 am }

[...] How AT&T Picked Up the iPhone: A Brief History of Mobiles iPhone Price and Profits vs Nokia, LG, HTC, RIM, Palm Using Apple’s iPhone in the Enterprise Analyst: iPhone simply isn’t meant for enterprise – AppleInsider [...]

2 Apple’s iPhone Vs. Other Mobile Hardware Makers: 5 Revenue Engines — RoughlyDrafted Magazine { 02.27.08 at 3:58 am }

[...] How AT&T Picked Up the iPhone: A Brief History of Mobiles 10 FAS: 2 – The iPhone’s Anti-Competitive AT&T Contract [...]

3 Five More iPhone Myths — RoughlyDrafted Magazine { 10.01.08 at 6:31 am }

[...] How AT&T Picked Up the iPhone: A Brief History of Mobiles Inside iPhone 2.0 review series: the new iPhone 3G hardware 2. The App Store is Doomed Over 6 Canceled Apps Apple has turned down a half dozen programs from the App Store, and a gaggle of pundits have decided this means dire consequences for Apple as developers flock to Android Market. In six months, they likely will have moved on to other subjects of panic. That’s because Apple has things other mobile platforms lack: $40 million a month in capitalist incentives for developing software and nearly ten million iPhone users (along with lots of iPod touch users). [...]

4 AT&T CEO lays out plans to improve 3G coverage in 2009 — RoughlyDrafted Magazine { 02.24.09 at 7:28 am }

[...] Evolution), now under development for specification in 3GPP Release 8. That should finally end the technology divide that has split the US for nearly two decades, although Sprint is moving ahead with plans to build [...]

5 The Palm Pre/iPhone Multitasking Myth — RoughlyDrafted Magazine { 07.30.09 at 10:02 pm }

[...] How AT&T Picked Up the iPhone: A Brief History of Mobiles The iPhone isn’t coming to Verizon [...]

6 iPhone Wars: AT&T, Verizon and the evil of two lessors — RoughlyDrafted Magazine { 08.01.09 at 1:16 pm }

[...] How AT&T Picked Up the iPhone: A Brief History of Mobiles [...]

You must log in to post a comment.