The concept of cellular phones first came to light in 1947, when researchers realized that by dividing service areas into small cells, and reusing frequencies the Car phone traffic could be immensely increased. The only problem was the lack of technology, which hampered the realization of this concept.
Since a cell phone is actually a type of two-way radio, AT&T proposed that the Federal Communications Commission (FCC) allot a large number of radio frequencies so that wide-spread mobile telephone service could become feasible and communication giants could enter the field. This would not only create a bigger market but also provide incentive to research the new technologies. The FCC adopting a conservative approach allocated very few frequencies thus allowing only twenty-three phone conversations to occur simultaneously in the same service area. This was highly inefficient and uneconomical considering the huge investment the companies would have to pump into equipment and research and development. The FCC revised its decision and allowed more frequencies on the condition that a better more sophisticated mobile network be established. AT&T - Bell Labs, again at the forefront of innovation and development, proposed a cellular system based on small, low-powered broadcasting towers, each covering a 'cell' a few kilometers in radius, jointly covering a larger area. Each tower would service the mobiles present in its coverage areas and pass them onto the next tower as they moved out of its coverage area, thus at any particular moment very few frequencies would be required.
