Amateur radio operators are usually credited with the discovery of long distance communication in the shortwave bands. The first successful transatlantic tests were conducted by radio amateurs in December 1921 operating in the 200 meter mediumwave band, the shortest wavelength then available to amateurs. In 1922 hundreds of North American amateurs were heard in Europe at 200 meters and at least 20 North American amateurs heard amateur signals from Europe. The first two way communications between North American and Hawaiian amateurs began in 1922 at 200 meters. Although operation on wavelengths shorter than 200 meters was technically illegal (but tolerated as the authorities mistakenly believed at first that such frequencies were useless for commercial or military use), amateurs began to experiment with those wavelengths using newly available vacuum tubes shortly after World War I.

Extreme interference at the upper edge of the 150-200 meter band -- the official wavelengths allocated to amateurs by the Second National Radio Conference in 1923 -- forced amateurs to shift to shorter and shorter wavelengths; however, amateurs were limited by regulation to wavelengths longer than 150 meters. A few fortunate amateurs who obtained special permission for experimental communications below 150 meters completed hundreds of long distance two way contacts on 100 meters in 1923 including the first transatlantic two way contacts in November 1923.

By 1924 many additional specially licensed amateurs were routinely making transoceanic contacts at distances of 6000 miles and more. On September 21, several amateurs in California completed two way contacts with an amateur in New Zealand. On October 19th, amateurs in New Zealand and England completed a 90 minute two way contact nearly half way around the world. On October 10th, three shortwave bands were officially made available to amateurs by the Third National Radio Conference, at 80, 40 and 20 meters. The 10 meter band was created by the Washington International Radiotelegraph Conference on November 25, 1927. The 15 meter band was opened to amateurs in the United States on May 1, 1952.

Marconi Takes the World by Surprise

In June and July 1923, Marconi quietly completed successful night time transmissions on 97 meters from Poldhu Wireless Station, Cornwall to his yacht Elettra in the Cape Verde Islands. In September 1924, Marconi completed successful daytime and nighttime transmissions on 32 meters from Poldhu to his yacht in Beirut. Marconi took the world by surprise in July 1924 when he entered into contracts with the British General Post Office (GPO) to install high speed shortwave telegraphy circuits from London to Australia, India, South Africa and Canada. The UK-to-Canada shortwave "Beam Wireless Service" went into commercial operation on 25 October, 1926. Beam Wireless Services from the UK to Australia, South Africa and India went into service in 1927.

Shortwave soon became an extremely disruptive technology. Far more spectrum is available for long distance communication in the shortwave bands than in the longwave bands; and shortwave transmitters, receivers and antennas were orders of magnitude less expensive than the multi-hundred kilowatt transmitters and monstrous antennas needed for longwave.

Shortwave communications began to grow exponentially in 1927, similar to the internet in the late 20th century. By 1928, more than half of long distance communications had transitioned from transoceanic cables and longwave wireless services to shortwave and the overall volume of transoceanic shortwave communications had vastly increased. Shortwave also ended the need for multi-million dollar investments in new transoceanic telegraph cables and massive longwave wireless stations, although some existing transoceanic telegraph cables and a commercial longwave communications stations remained in use until the 1960s.

The cable companies began to lose large sums of money in 1927, and a serious financial crisis threated the viability of cable companies that were vital to strategic British interests. The British government convened the Imperial Wireless and Cable Conference in 1928 "to examine the situation that had arisen as a result of the competition of Beam Wireless with the Cable Services". It recommended and received Government approval for all overseas cable and wireless resources of the Empire to be merged into one system controlled by a newly-formed company in 1929, Imperial and International Communications Ltd. The name of the company was changed to Cable and Wireless Ltd. in 1934.