With GSM well under way my mind turned to other things. We were seeing a proliferation of ideas emerging in mobile radio ranging from telepoint to mobile satellite systems. Observers at the time seemed to view this world of technology change from one of two viewpoints. The first was that the technology was becoming chaotic. It wasn’t fruitful for Government to try and predict its future, let alone have views. It was best left to the market to sort out. The free market economists came behind this viewpoint but took it to an unreasonable extreme where regulators for national infrastructures took pride in having no opinions on technology – the so called “technology neutrality” mantra. The second view was that all emerging technologies had to be part of a coherent framework. No losers. Many papers emanated from the EU Commission in Brussels in this direction. Again it was an extreme view of an over regulated world.

It was certainly evident that the challenge of the 1990s was not finding new technological ideas. The real problem was getting the new ideas we already had to the market. The vision we needed in the DTI was how technologies were likely to map onto economically viable market needs and where government should have an informed view (national infrastructures) and where should they butt out and leave it to the market (consumer electronics). That was the task I set myself.

I started with the presumption that the basic service being sold in mobile radio was “mobility”. At one extreme cordless telephones offered the public mobility of 100 metres or so around the base unit. It cost under £100 for both the mobile unit and a base unit. At the other extreme was satellite communications. One geostationary satellite offered mobility over one third of the globe. But the mobile unit cost several thousand pounds. The equivalent of the base unit cost hundreds of millions of pounds.

My analysis mapped what was likely to be happening between these extremes. The GSM systems would offer a service over the whole populated regions of Europe. The present national TACS networks offered a service over 90% of the UK. Then there was a leap to a cordless phone. This was the basis of the telepoint idea to offer a radio version of a public call box.

Figure 34 – Telepoint positioning itself with elegant cordless handsets

The service would only be available within 100m of designated spots at railway stations, by Post Offices etc.

The gap in this emerging picture was a dense coverage of towns and districts providing a continuous mobile phone service based only on small hand portable mobiles. The wire line connection to the home would go. Each one of the family would have their own pocket mobile phone. I was in fact fleshing out the idea I’d picked up in Berlin from our Bellcore R&D colleagues and locating the space in the market where it might fit into the mobile radio world emerging in 1988.

In January 1989 I was invited to give a paper at a technical conference in Amsterdam. A Commission Official I knew was on the organising committee. He asked me to give the paper. I was now Chairman of the ETSI Technical Assembly. It was important to be seen on the European technical circuit so I agreed. He specifically asked me to do something on mobile radio. It was not the sort of venue to be stressing the UK’s concerns on competition in Europe, or to be more precise the lack of it. Instead I set down my vision of the district mobile phone service based entirely on the small pocket mobile phone. I had some good quality art work drawn up for the slides to hold the audience attention.

It was a quiet conference. The presentation interested the people attending but didn’t cause a stir.

Meanwhile Vodafone and Cellnet were going from success to success with the build up of their subscriber bases, turnovers and profits. Sir Brian Carsberg, the Director General of Telecommunications (OFTEL) was starting to become uneasy. Prices of mobile phone calls didn’t seem to be coming down with any great speed but mobile phone company profits were soaring. Prof Carsberg started to make public noises about the need to see more competition in cellular radio. Other telecommunications companies were also taking due note of the large profits of the cellular radio operators. It didn’t take too many hints from Sir Brian Carsberg before they were at the door of DTI demanding an opportunity to also be a mobile phone operator.

Mercury and GEC were knocking the loudest. Sir Eric Sharp (Chairman of Cable & Wireless) had invited a colleague from the Radiocommunications Division (the new name for the Radio Regulatory Division) to see him in order to find out what frequency spectrum might be available for a third cellular radio operator. The colleague said that there was simply no suitable spectrum left. The GSM frequency channels had now been given to the two existing operators, so had the analogue spectrum and so were the MOD frequency channels. There was nothing left. To Sir Eric Sharp this was the wrong answer and his lobbying efforts moved up a gear.

Pressure from Sir Brian Carsberg and pressure from industry continued to mount on the DTI.

The Secretary of State Lord Young responded to the pressure and instructed the Radiocommunications Division to find radio spectrum for a third UK mobile radio operator.

Figure 35 – Lord Young, DTI Secretary of State steps up UK mobile radio competition

This left the Radiocommunications Division with the unenviable task of seeing what scraps of radio channels could be scrabbled together around where the present cellular radio services operated.

I viewed these developments with some misgivings. My priority was still the pan European service that was still two years away from opening. The duopoly model was working well – as was the layer of “service providers” the DTI had structured into the regulatory framework. But if Ministers wanted more mobile operators in the UK market then officials had to see how best this could be done – including me.

One of my responsibilities at the time was R&D funding for radio technology. A programme of research into personal communications had been pulled together. We had looked at the radio spectrum to see where mobile radio services were likely to go in the far future. The present cellular radio bands around 900 MHz were boxed in. Below were the television bands. Nobody could see the politics of TV services being pushed out in the foreseeable future. Below this came many military services. You can’t have a modern war without consuming large amounts of radio channels for all manner of command, control, guidance, communications or whatever. Much below this there is simple not the space for very much at all.

The obvious place to look was upwards in the radio spectrum. Several Universities were doing work in the very high reaches known as “the millimetre wavelength” regions. They offered visions of radio transmitters in every room of the house and every lamppost. The economics of this looked hopeless.

My decision was to push the research programmes to work in the 1800 MHz area. It was intended to be long term research. It was preparing the ground for the future. I didn’t expect commercial applications for at least 7 years or so. That was certainly the prevailing view in the rest of Europe and for that matter the rest of the world.

It was a very long and lonely weekend. I agonised over whether to push forward to Ministers the idea of pulling forward in time the opening up the 1800 MHz bands for the third UK operator now? My credibility was on the line.

There were a lot of reasons not to do it. It would be moving 7 years ahead of when all my technical peers were expecting to bring this frequency range into use. There were no mobile radio components anywhere in the world working over this frequency range. The radio wave propagation was far more adverse for coverage over very large areas than was the case for 900 MHz, where the present operators were located. This would lead to a much more expensive infrastructure for the same coverage area. What commercial enterprise would want to travel the stony road of opening up a completely new frequency range ? The fact that they were new entrants made it even less logical to be the ones having to bear the cost of developing entirely new radio components.

Putting such a proposal forward seemed to carry a high risk of being laughed out of court.

On the other hand trying to squeeze three dynamically expanding operators into the limited 900 MHz would soon lead to all three being bottled up. It is widely known that cellular operators can increase the capacity of their networks by radio cell splitting. These smaller cells allow frequency channels to be re-used again and again more intensively. However each new cell requires building a new base station site. This increases the capital and running cost for the mobile network operators and the cost gets reflected back into the cost of mobile phone calls. If this went too high it would depress demand and impede the march to a mass consumer market.

My long term objective was to drive cellular radio to becoming a mass consumer market. Thus the DTI had to release enough new radio spectrum to allow an unimpeded road to this vision. In was a necessary lubricant to accelerate the flipping of the business model from a relatively small number of large radio cells serving relatively few customers to a very large number of small radio cells serving a mass market. Since we had powerful commercial interest knocking at our door, perhaps this was the opportunity to harness their drive to shoulder the burden of bringing this large extra tranche of spectrum at 1800 MHz on stream and more to the point get mobile operators to flip from a relatively small number of large radio cells to a very large number of small radio cells.

Having decided the right national strategy the bigger problem was how to sell it to politicians and industry.

The strongest card was that opening up a new range of frequencies would allow more than one new competitive operator. This would appeal to our pro competition Ministers and the Director General of Telecommunications, Sir Brian Carsberg. That was half the job done.

The main downside of 1800 MHz was the adverse radio wave characteristics in getting signals to mobile phones 7-10 miles away. Industry would baulk at the very high investment costs arising from this.

At this point I had a conceptual break-through.

My vision of a local mobile phone service based entirely on small hand portable phones turned the logic on its head. A small pocket mobile phone had very limited radio power. This meant that only short distance from a base station were possible anyway. My pitch would therefore be a new service that would leap straight to a hand portable dominated mobile network of very small cells. For very small radio cell structures the 1800 MHz band was an advantage over 900 MHz in being able to control the small radio cell boundaries. This focus on the pocket mobile phone was in line with the emerging market trend.

The next part of my analysis was the technology to be used for these new 1800 MHz based networks. I decided that the only common sense way forward was to re-use the GSM technology but working on the new frequency ranges. This would lower the development costs for the new operators and take GSM up to an even large-scale economies – all pulling in the same direction of global scale economies. This in turn would drive down the price of mobile phones and fuel the transition to a mass consumer market. Strategy complete!

On Monday Robert Priddle met with the head of the Radio Communications Division and two of his senior staff. They rehearsed the problems of finding any spectrum at 900 MHz. I tabled my idea of opening up the 1800 MHz band. There was a shocked silence. One of the Radio Communications Division officials asked whether I had taken leave of my senses. My response was ready: Two operators at 1800 MHz versus one operator at 900 MHz – which might have more attraction for Ministers.

With Robert Priddle’s support it was agreed that it should be trailed as an option in any submission. Robert Priddle raised the matter with Alistair Macdonald the Deputy Secretary. He thought it worth taking informal sounding with Lord Young before any formal submission was made. The Secretary of State embraced the idea with enthusiasm. It accorded with his own vision of advanced networks supporting small lightweight pocket telephones. Sir Brian Carsberg also liked the idea of two new operators rather than one. The idea was now had legs.

It was agreed that the next step would be a public consultation document to sound out the opinion of prospective operators and industry. The window of opportunity had opened for new 1800 MHz mobile radio systems and my quiet back room thinking (and to give credit to Bellcore’s willingness to share their ideas in Berlin) had positioned me to seize it.

Speed was the watchword from Lord Young. That weekend the dust was blown off the paper I’d read at the EUROKOM conference in January and re-wrote it as a consultation note called “Phones on the Move” over a weekend. Two further ideas were added. It was my view that once the GSM system had behind it huge volumes of equipment the semiconductor chips would become cheap commodity items. Manufacturers would need to find new ways of differentiating their products. They would do this by adding new functions like electronic diaries and other Information Technology novelties. I coined the term the “office in the pocket” to express this vision. This didn’t stretch the credulity of my DTI colleagues. 

Figure 36 – The “office in the pocket” arrives by 1996

However, when I also added the idea that these phones would become an alternative to the fixed wire line telephone I got loud protests that this was going over the top and likely to lose credibility for the exercise. I held my ground but did have to concede some softening of the words.

One of my reasons for putting this threat to the wire-line telephone was to stimulate BT’s strategic thinking to up grade the local loop to broadband so as to offer richer wider band services in order to stop their fixed customers defecting to mobile radio.

The document referred to these new networks as personal communications networks (hence the term PCN). This term came from a LINK R&D programme I had running called “personal communications”.

Lord Young moved immediately to announce the issuing of the “phones on the move” consultation document. The date he chose was 26th January 1989, the day already selected to announce the winners of the hotly contested competition for telepoint licences. My colleague from the licensing side argued in vain that this was not a good idea. It would take the shine off the telepoint licence announcement. Lord Young said he wanted to signal a sea change in the mobile radio landscape in the UK. The Press Office supported him. It went ahead.

Predictably there was adverse press comment on the effect of the “Phones on the Move” consultation on the investment confidence in telepoint. I don’t believe for one moment that this was a significant contributor to the eventual demise of telepoint in the UK. In some ways it might have galvanised telepoint to move a bit faster to capture the four-year window of opportunity open to it and secure their space in the market. Business schools will no doubt have a field day analyzing why telepoint failed. There were a number of other factors. The main one was the cross subsidy of cellular radio handset prices. This gave a false impression of the relative cost of ownership between cellular and telepoint. Another was that the UK market alone did not provide the economic basis for the telepoint technology. I did what I could for the telepoint players to come together on a single telepoint technology and widen the number of countries interested in allowing the service.

For telepoint to succeed it would have had to ride on the back of a quite independently driven cordless telephone market, either in the residential market or the business market. But industry was slow to come to market with cordless Private Automatic Branch Exchanges based on CT2 technology. In part this was as a result of underestimating the complexity of the network aspects. For the domestic market the CT2 cordless telephone and base unit came to market retailing at £300. But the first generation analogue cordless telephones were already retailing at well under £100 in high street shops driven by cheap imports from the Far East. Even when Rabbit was introduced by Hutchinson the price was still up around £200. It was clear at such price levels there would not be a mass market of domestic cordless telephones upon which a public telepoint service could build out from.

The other glaring deficiency of Telepoint was a lack of investment in a dense network of public telepoints. At its peak there was 1 telepoint for every 80 BT public telephone boxes. This was summed up in a cartoon published in the FT at the time

Figure 37 – Banx cartoon in the FT sums up the public perception of telepoint as a convenient mobile service

Telepoint was a lost cause.

Notwithstanding the concerns on the impact on Telepoint, the “Phones on the Move” consultation document got a favourable press. It was generally well received by industry. By the end of April we received some 17 substantial responses and 12 smaller ones. These divided broadly into those who envisaged a personal communications network based upon some form of low powered cordless telephone and the other based on a hand portable based GSM type network that could also accommodate car phones in the early phase. Although a lot of work went into the submission there was no surprises. The best response from a purely technical viewpoint came from GEC. The one from Mercury was very weak. Their proposal had not been thought through.

As part of preparing for the “Phones on the move” consultation publication I had contacted the National Radiological Protection Board. They are the UK’s acknowledged authority on medical effects of radiation on the human body. They were given the sort of power levels that personal radios would emit at the new 1800 MHz frequency ranges. The National Radiological Protection Board replied that at the sort of low powers I’d quoted they did not consider there to be any risks. This statement went into the “Phones of the Move” document.

In the GEC responses to the consultation was a very good analysis of the state of knowledge on the health issues arising from the use of low powered radio sets close to the body. In it they showed that some radio designs with internal as opposed to external aerials could emit local power concentrations that came close to the recommended safety levels. It was a sort of local focusing effect similar to a magnifying glass. Since it was still under the limits there was nothing of concern. But I did pick up upon this and quietly commissioned some work with Bradford University to see if the mobile radio industry would be stopped in its tracks if the medical authorities suddenly demanded safety power limits to be lowered significantly at some point in the future.

Bradford University explored two designs for me. The first was a “stalk” aerial that would pull the radiating element of the aerial well above the head. The comic cartoonists would have loved it. The second was a type of aerial called a phased array. My idea was to arrange the phasing so it would add in the far distance where the power was needed but cancel close to the aerial where it was not needed. The report came back showing that the two designs could bring the power down by a factor of 10 and in the case of the phased array by a factor of up to 100 over a large volume of the head. This gave me the assurance I needed. We could move responsibly towards this mass consumer market with ample safety margin to accommodate any future changes in medical opinion.

Later the industry was to find an even simpler solution with the so-called hands-free kits that comprised an ear-piece and microphone that kept the mobile phone well away from the head. But this was not to stop the media from whipping up a massive health scare two years later and I will come to how this arose in a later chapter.