The D-2 Story

Most of us still remember in one way or another how the telecoms world looked like 25 years ago in Europe, North America and many other places around the world: State owned companies still controlled the voice telephony and data transmission market in many parts of the world and they had a monopoly for everything up to the last centimeter of the line, including the cable up to the actual telephone. Nobody but them touched any part of the network, there was no competition, and prices were in ranges that sound unbelievable compared to today. A lot has happened since then not only on the technology side that regularly spits out a new generation of equipment that is by orders of magnitude cheaper, faster, smaller, less power hungry, etc. But this is only one side of the medal. The other was privatization, i.e. the end of telecoms monopolies and regulation of telecom markets to ensure a fair and thriving competition between the former incumbents and those who've just entered the market.

A couple of weeks ago I wrote a post on this book on the inception and evolution of SMS which gives an interesting account not only on this topic but also how GSM as a whole was developed in the 1980s. While reading this book I remembered another book on the topic I read many years ago, “Die D-2 Story” (only available in German). Written in 1994, it gives an account of how the liberalization of the telecoms market in Germany started at the end of the 1980s by allowing and fostering a second GSM network operator next to the state owned incumbent. Reading the book is a sort of double history because Susanne Päch describes the events as seen in 1994. Now, over 15 years later, one can see what has changed since then and how the story continued, again from a technical and also a political point of view. Both histories, the one up to 1994 and the one afterwards are nothing but stunning. Here are some of the most outstanding events in those 25 years described in the book and also later on that I remember myself:

End of the 1980s: Germany decides to liberalize the telecoms market and start with mobile networks. The model for the process was the UK, where privatization started somewhat earlier.

A competition was launched to find the best private consortium. In the end, the winner was Mannesmann Mobilfunk (later bought by Vodafone), a consortium driven by the company of the same name but including many other companies. The book gives incredible details on the political situation and the developments inside the former incumbent, in the telecoms industry that developed the equipment and in the companies vying to win the second GSM license.

Getting from the state of the industry in the 1980s to today required many iterations. Even in 1994, when the book was written, the author could probably not have imagined how a fully liberalized telecoms market that we have today would look like. But I think that is not surprising. Just imagine how closed and nationalized the markets were prior to GSM. Here's an example: If you were one of those few thousand people who possessed an analog wireless telephone in the trunk of your car special actions had to be taken when crossing a national border. There may have been some exceptions, but by and large, the analog wireless phones could only be used in their country of origin. As radio waves don't stop at national borders some countries enforced deactivation by sealing the device and checking the seal on departure again. Others insisted that the owner attach a note at the device that it was forbidden by law to use the phone in their country. And yet others required the owner to pay a fee when they brought their phone in the trunk along. Those were the days… hardly imaginably today anymore when we already get upset if the phone needs a bit longer to find the network when it is first switched on in another country.

Prices both for fixed and mobile telephony slided significantly from then to now. Here's a recent post that looks at how prices have changed during the last 10 years.

While back in 1994, only mobile communication and microwave transmission to backhaul the traffic from the base station was liberalized, 1998 saw the liberalization of the complete telecoms market including voice and fixed line backhaul. Also by that time, four mobile network operators compete in the German market.

I could go on and on but suffice it to say that if you speak German and are interested in telecoms and its history, this book gives an incredibly interesting insight in those crucial years at the end of the 1980s to the first commercial availability of GSM by two network operators. As the book was written in 1994, it is no longer available from the publisher but you can easily find it on eBay and other sites that offer used books.

To close, here's a link that contains interesting information on the history of telecoms and wireless in Germany (again only in German) for a much longer period. Similar things like in Germany pretty much happened in all European countries in around the same time frame, give or take a couple of years. And yet, the differences made then still influence the markets today and the situation in the different countries is still diverse today. Compare Austria with France and then with the UK for example. Is anyone aware of similar books that describe the evolution of telecoms in other countries? I'd be highly interested to have a look!