Early cell phones were so limited it's sort of amazing they gained adoption. They were big (literally the size of a brick), heavy, and expensive. Battery life was poor. The EM radiation was possibly harmful. Due to all of that most mobile phones were permanently installed and could only be used in a car. Plans were either pay-by-the-minute or had pre-paid minutes with expensive charges if you went over. Roaming off your local network was crazy expensive... somthing like dollars per minute. Texting wasn't even a thing at the time; most phones only had a 10-character display. Voice quality was poor and calls often dropped or would not connect.

It wasn't until phones shrank and service got cheaper, that consumer adoption took off. Businesses and early adopters will pay even if the product is inconvenient and costly to use, as long as the benefit exceeds the cost.

This is a minor detail, but the "AT&T" that bought BellSouth in 2006 was the AT&T formerly known as SBC which bought the husk of Ma Bell and rebranded itself, i.e. the AT&T we have today.