They worked basically like the cell phones of today: They transmitted and received a radio signal from a nearby tower which carried the call through land lines into the normal telephone network. The difference though is that the earlier electronics were very bulky and required a big box of equipment along with usually an external antenna which could be affixed to the outside of the car magnetically. They also transmitted and received with much more power so you really didn’t want the antenna to be right next to you.
Your modern cell phone is a marvel of miniaturization and can cram all the capabilities of those car phones plus much more into a smaller form.
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