Mobile phones have existed at least since the 1950s, though the distinction becomes blurry when special systems are used to “patch” conventional Radiotelephones (2-way radio) into a phone network with the assistance of human operators. Modern mobile phones can make and receive calls automatically, operating as would a normal phone (though most have a superset of the ability of fixed-line phones).
Mobile phones began to proliferate through the 1980s with the introduction of “cellular” phones, with multiple base stations located relatively close to each other, and protocols for the automated “hand-off” between two cells when a phone moved from one cell to the other. In this era, mobile phones were somewhat larger than current ones, and many were designed for permanent installation in cars, or as “transportable” phones the size of a briefcase.
As technology improved through the 1990s, the larger “bricks” disappeared and tiny hand-held phones became the norm.
In most of Europe, wealthy parts of Asia, and Australasia, mobile phones are now virtually universal, with the majority of the adult, teenage, and even child population owning one. They are less common in the United States — while widely available, market penetration is lower than elsewhere in the developed world (around 66 percent of the U.S. population as of 2003). Reasons advanced for this include incomplete coverage, fragmented networks making roaming difficult, inferior network technology, relatively high minimum monthly service charges, relatively low-cost fixed-line networks, and the car-centric nature of US society.
The effects of antitrust legislation in the United States breaking up the nationwide Bell network may also have had an effect. In other parts of the world the competing mobile phone companies have offered a wide range of service plans from pre-paid cards to high flat rate subscriptions. They have also resorted to cut-throat discounting, normally selling handsets at high discounts (including wholly subsidised units) in return for long term (usually 1-year) contracts with high disconnection costs and handsets locked to single networks (SIMLOCKS). Such practices allowed many consumers to obtain a mobile phone and caused spectacular market penetration. The experience of the American telephone companies with antitrust cases in the 1980s and 1990s meant that they would be reluctant to engage in these practices to build their customer base.
Due to their low establishment costs and rapid deployment, mobile phone networks are rapidly spreading throughout the developing world, outstripping the growth of fixed telephony. Such networks can often be economic, even with a small customer base, as mobile network costs are mostly call volume related, while fixed-line telephony has a much higher subscriber related cost component.