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Second Generation: Wireless Takes Off

Despite the significant barriers to adoption, early analog mobile services still provided significant value to a small segment of high-end users. But it was the introduction of low-cost digital technology and a dominant global standard, Global System for Mobile Communications (GSM), which enabled wireless to become one of the fastest-growing technologies in history. Code Division Multiple Access (CDMA) offered a competing standard to GSM, but it gained very little traction outside the United States due to intellectual property (IP) ownership issues with Qualcomm and other firms. By converting communication signals into 1s and 0s, wireless systems could provide a higher-quality experience with smaller, cheaper handsets. This increased the number of users they could serve in a given coverage area, thus reducing their overall operational costs. Digital also enabled wireless services to easily carry data over the same networks as voice calls, opening a whole new set of potential applications and eventually higher-speed data services (sometimes called 2.5G). By 2003, 2G cellular had driven the total number of wireless users in the world past the total number of fixed-line telephone users (see Figure 1.4), and it never looked back.

Figure 1.4

Figure 1.4 Growth in cellular phone usage5

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