Marconi business growing pains

The business model Marconi used for his radio communications equipment was to charge a rental fee. This also included the fees for the use of a trained radio operator and the use of the Marconi shore based stations. In this way he did not infringe the monopoly held at that time by the British General Post Office.This arrangement also enabled the company to restrict competition as users with equipment from competitors could not use the shore stations except for emergency communications.With the Marconi company possessing a large number of strategically located stations, this provided a strong incentive for ships to use the Marconi equipment rather than that of a competitor.There was a growing call for international cooperation and legislation in view of the degree of chaos on the radio bands with some operators even deliberately jamming or interfering with the transmissions of others. International agreements were drawn up and it became necessary for all radio communications stations to be licensed by the various countries of origin.

As a result, on 1 January 1905 radio communication within Great Britain came under the control of the Wireless Telegraphy Act 1904. All radio communications stations were licensed including the shore stations which were given a licence for eight years.Under the terms of the agreement telegraph messages or Marconigrams could be sent to and from the ships at sea and then relayed through the standard land based telegraph system operated by the British General Post Office or GPO.Ultimately the government owned GPO required that the shore stations were sold to them, and this meant that Marconi had to further improve his commercial offerings.