Radio or sending voice on the air without wires, was developed in the 1890’s. The "walkie talkie", developed in the late 1930’s, was one of the first practical applications of mobile communications. The first commercial wireless telephone service was actually available in 1946. But the systems were bulky and inconvenient.

However, in the late 1940’s, scientists at Bell Laboratories invented a system that handled many mobile calls at a time. It was based on dividing up a city into small areas called "cells". A cell was simply a central, fixed point for sending to and receiving calls from mobile telephones.

The basic components of each of these cells were an antenna, a transmitter, a receiver and a connection to the public telephone network. The mobile equipment itself was still big. However, another group of scientists at Bell Laboratories were, at the same time, able to miniaturise the equipment used in mobile phones by inventing the transistor, the forerunner of today’s microchip.

Real growth came in 1983, when Bell Labs’ Advance Mobile Phone Service (AMPS) cellular technology became a reality and mobile phones began to be used throughout North America, primarily by business executives in their automobiles.

During the 1980’s and the early 1990’s, other regions like Western Europe and Latin America also began to develop wireless communications. The cell technology invented at Bell Labs divided geographic areas into small, "honeycomb" shaped cells. Each cell covered a specific geographic area based on a number of factors.

The actual operation of a cellular telephone call is based on the concept of radio waves. When a call is placed from a mobile phone (technically, a transceiver), the caller’s voice is converted into a radio signal.

The radio signal goes from a mobile phone to an antenna which is then transferred to a radio transceiver (at a cell site). The signal is converted into a format compatible with telephone network and then sent to the Mobile Switching Center that connects all cell sites in a predetermined geographic area. It may be transmistted to a Public Switch Telephone Network (PSTN) or the terrestrial telecom exchange.

The number of cells that are connected to a switch is determined by the number of calls that pass through the system. The primary responsibility of a switch is to transfer calls to a public switched telephone network. A switch also contains a lot of intelligence that is used to manage and operate a cellular system.

A cellular system is able to maintain the continuity of a call as the user moves. The call can be transferred from one cell to another cell as the user moves out of the first cell’s geographic area and into the second cell’s area. This process is called "hand-off". A call is handed-off from one cell to the next as a mobile phone moves around. Hand-off ensures that a call is handled by the cell that has the strongest signal with the mobile phone in use (because as one drives, he moves further from one cell and closer to another). The signal strength reduces because the radio signal between a phone and a cell becomes weaker as the phone moves further from the cell antenna.

In Europe, the time division multiple access (TDMA) technology was also introduced to cellular systems. It is called GSM (Groupe Speciale Mobile or Global Standard for Mobile Communications).

The GSM network can be divided into three broad parts. The Mobile Station (phone) is carried by the subscriber, the Base Station controls the radio link with the Mobile Station and the Network Subsystem, the main part of which is the Mobile Switching Centre, performs the switching of calls between a mobile phone and other fixed or mobile users.

GSM subscribers are identified by their Subscriber Identity Module (SIM) card, which holds their identity number and authentication key. A user is not required to own a handset since it is the card that enables network access, feature access and billing.