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A phone so big it came with its own luggage

Victor Surerus demonstrates how he used his first cell phone, purchased in 1985 for roughly $1800.

JENNIFER ROBERTS/jennifer roberts The Globe and Mail

Twenty-five years ago this week, a 33-year-old small-town funeral director walked into Kawartha TV and Stereo in Peterborough, Ont., and spent $2,000 on a cellular phone that was so big, it came with a carrying bag.

The purchase made Victor Surerus, whose father had sold residents of the tiny community of Roseneath, Ont., their first television sets back in the early 1950s, the first cellphone customer in Canada - at least as far as anyone can tell.

"It was the freedom," Mr. Surerus, now 58, said in an interview.

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This week marks 25 years since Bell Cellular and Cantel, funded in part by Ted Rogers, launched their wireless networks on July 1, 1985. Since then, the industry has grown from a few thousand scattered subscribers like Mr. Surerus to about 23 million users; from an unproven technology that analysts said no one would buy to a $16-billion economic driver; from what was essentially a dream into an ever-present reality - what many would call a necessity - of modern life.

In the early days, most mobile phones were barely mobile. Mr. Surerus had spent the equivalent of about $3,700 today for a "bag phone" that was carried slung over the shoulder in a bag or briefcase. The handset was extractable and attached by a cord. Many considered it a major improvement on the earliest versions of the car phone, which required someone to rip apart the dashboard of a vehicle, and drill a hole through the trunk to attach an analog radio antenna.

"It wasn't like a suitcase, but it was a substantial bag," recalled Mr. Surerus, who still has the same number Bell Cellular gave him 25 years ago. "It was a big investment."

The high cost was one reason that so many people in 1985 doubted wireless technology would ever be commercially successful. Since Canada didn't have a metered, pay-per-minute land-line phone service like many other countries, economists had pegged the new mobile phones as a luxury item, an indulgence for the interconnected, global aristocracy. It would be another two years before the release of Oliver Stone's Wall Street, with the iconic scene of Michael Douglas walking along the beach, talking on a mobile phone the size of a brick, inspiring Charlie Sheen to criminality.

I'm not sure these guys who got the licences thought it was a great gift at the time, because the call on capital was so great. They really had to put a lot of money into it and fight for it.  Francis Fox, minister of communications in 1983

Then there were politics, of course, which have always affected Canada's regulated telecommunications sector.

One key moment came in 1983, when Francis Fox, then Minister of Communications in Pierre Trudeau's Liberal government, and a team of civil servants sifted through piles of applications from companies that aspired to be the one national player that would be licensed to compete with the powerful regional monopolies in the wireless arena.

For Mr. Fox, the proposal that made the most sense was one from Cantel Cellular Radio Group Inc., the brainchild of Mr. Rogers, Marc Belzberg and Philippe de Gaspé Beaubien. Mr. Fox relayed his opinion to the Prime Minister and Liberal cabinet, to their utter dismay.

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"At that point, my friend Ted Rogers was the bagman for the Tories in Toronto, so there were a lot of people around the table who said, 'Are you sure you want to do this?'" Mr. Fox recalled, illustrating the political considerations that sometimes influence telecommunications policy-making.

"Trudeau said to me, 'Listen to what your colleagues have to say. Call me back on Monday. And let me know what your decision is.' So I called him back on Monday and said, 'The best application is the one that I proposed to cabinet last week.' And he said, "Fine. Go ahead."

The contentious approval created what would become Canada's largest wireless company, now fully owned by Rogers Communications Inc., with more than 8.5 million subscribers. "On that day we went from a monopoly to an oligopoly, basically," Mr. Fox laughed. "But it was a giant step."

Mr. Fox said that Bell wanted to launch cellphone service earlier because the telecom giant had a system up and running.

"If we had let Bell start a year before the competition, there would not have been any competition left by the time they [Cantel]got their system off the ground," he said. "That was the reason for the delay between the issuing of the licence and the startup. It was an arbitrary date; I chose the date of July 1st, because I thought that nice things should happen on Canada Day.

"I'm not sure these guys who got the licences thought it was a great gift at the time, because the call on capital was so great. They really had to put a lot of money into it and fight for it."

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Michael Binder, a 66-year-old former assistant deputy minister at the Department of Communications who came in after Mr. Fox's Liberals' were defeated recalled: "I don't want to call it a monopoly or cartel, but it was an understanding - that each of these provincial companies would stick to their territories."

Art Eggleton, then Mayor of Toronto, made the first, official wireless call on the Cantel network to the Mayor of Montreal on Canada Day, 1985.

"I'm not sure what we talked about. The weather. Smoked-meat sandwiches, I think," Mr. Eggleton said. "In perspective, now that I've seen how all this has evolved and how it dominates our world today, it was an awesome occasion. But I didn't think that at the time. I thought, 'I can't put this in my pocket.' It was too big."

By the end of 1986, Bell had only 6,000 subscribers. Networks were still being built, at times with great difficulty.

Philip Yhap, a field technician for Bell, worked 15- to 20-hour days getting the wobbly wireless system operational. Once it was working, he helped expand it. Near Huntsville, Ont., in 1986, he was working in a telecommunications shed at the base of a tower and experienced first-hand the type of particularly Canadian trouble that confronts ambitious domestic telecom companies.

"As soon as I went to leave, there was a big, black bear there," he said. He shut the door and waited an hour.

A year later, in the days before call centres, Mr. Yhap, now 59, responded to a client call near Stouffville, Ont., and was attacked by guard dogs.

But the industry kept growing. New companies were licensed and eventually bought out. Multibillion-dollar mergers shook the industry and created modern day Telus Corp. All the while, phones grew smaller and more powerful - and plummeted in cost.

"We used to marvel at the physical improvements," said Wade Oosterman, president of Bell Mobility. "It's the functionality of the phone that's creating awe today."

Wireless companies eventually began making big profits, turning their stocks into Bay Street favourites, even as their pricing tactics often frustrated or angered customers. "They're the new banks," one analyst said.

Twenty-five years on, wireless is the fastest-growing part of the telecommunications industry, and is considered a critical area for even cable companies, the stalwarts of the wired world. More new wireless players have launched, openly courting new immigrants to multicultural Canada with Bollywood ringtones and unlimited overseas long distance to China.

Globally, wireless technology has become crucial for poorer countries, acting as a catalyst for economic development and extending the information revolution in countries that have inadequate wired networks.

"It's changed the lives of billions of people worldwide," said Bob Berner, a Rogers executive who worked at Cantel in the early days.

Who would have thought? Mr. Binder did, from the beginning, coming into the DOC a few months before July 1, 1985.

"A lot of people considered us to be dreamers," Mr. Binder said. Now, he adds, "my son doesn't own a land line."

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