I think the channel spacing with IMTS and AMPS was the same, there was just a lot more spectrum available at higher frequencies. AMPS was allocated 50MHz share

I think the channel spacing with IMTS and AMPS was the same, there was just a lot more spectrum available at higher frequencies. AMPS was allocated 50MHz shared between two competing providers. IMTS I believe only used about 1.5MHz, although the specific frequencies it used were different in different areas. I think that you're right that it's sort of a cascade of things that made AMPS possible. 1. You get the capacity from having a lot of towers with a wide bandwdith, but you have to pay for all of them, so you have to use the capacity, so you need demand. 2. You get the demand because with the higher capacity, the price can come down. 3. You also get the demand because you can have a truly mobile device, not just a car phone. 4. To have enough demand though, the price of the handset also needs to be low enough. The prices of the integrated circuits to make a handset came down dramatically between 1970 and 1985 or so when AMPS started to be widely deployed. The electronics necessary to make an AMPS handset are also more sophisticated because (again to keep the service cost down) you need automated dialing (no operator), and you need to be able to hand the call off to the next cell if the user is moving. This means you need a microcontroller to be able to handle the pretty big state machine of the overall system.