The basic concept of cellular phones started in the late 1940s in Britain and America. Researchers looked at existing police mobile (radio) car phones and realised that by restricting the range or 'service area' of transmitters, they could re-use the same radio frequencies again and again. In theory, this would allow many users to share the network. However, the computer technology to achieve this just didn't exist at that time.
In 1947 AT&T in the USA proposed that the Federal Communications Commission (FCC) allocate a large number of radio-spectrum frequencies to allow mobile telephone services to become a reality.
But the FCC decided to limit the amount of frequencies available to the point that only 23 simultaneous phone conversations would be possible in the same service area. This effectively killed the potential market and because no companies were prepared to invest in the technology, mobile phone research was set back 20 years.