What was the fundamental shift from 1G to 2G, and what standard made it happen?

The shift from 1G to 2G was the move from analog to digital radio signals, enabled by the GSM standard introduced in 1992.

GSM stands for Global System for Mobile Communications. It was revolutionary for several reasons:

What changed with 2G/GSM:

• Voice was now digitized before transmission, improving quality and enabling encryption.
• Introduced the SIM card, separating the user's identity from the device.
• SMS text messaging became possible.
• Automatic subscriber localization, handover between cells, and roaming between networks.
• Operated at 900 MHz digital frequency.
• Data rate: 9.6 kbit/s (with HSCSD: 57.6 kbit/s).

Scale of adoption: GSM was deployed in more than 184 countries, making it the first truly international mobile standard. Before GSM, different countries used incompatible 1G systems, so your phone was useless abroad.

Tip: GSM's killer feature wasn't better voice. It was the SIM card and roaming. For the first time, you could pop your SIM into a different phone, or travel to another country, and just... work.

Go deeper:

• GSM History: the Development Story (Electronics Notes) — how "Groupe Spécial Mobile" began under CEPT in 1982, the Feb-1987 vote for digital/TDMA, the handover to ETSI in 1989, and the 6000-page spec behind interoperability.
• GSM (Wikipedia) — the standard's architecture and why it became the global 2G baseline (kept for the image carousel).
• Running your own GSM stack on a phone — OsmocomBB (CCC) — Harald Welte shows the actual GSM protocol side of a handset, free-software style.