Chinese Broadband and Indian Opportunity

Indian Telecom, Telecom News June 10th, 2005

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Chinese Broadband and Indian Opportunity

I must admit that I am fascinated by China. Not by it is claims but instead the way it chooses to pull wool over otherâ€™s eyes. The communists have chosen to severely curtail the freedom of people. More discussion on the same is out of scope here.

However, Rajesh Jain raises pertinent points in his Blog on the same issue.

He says:

The Internet industries in India and China grew very differently. Because China had a better telecom infrastructure and a higher per capita income, there were more Internet users there. So, even though the Internet was still somewhat controlled by the government, portals like Sina, Sohu, Netease, and China.com managed to raise hundreds of millions from international investors through NASDAQ listings. In comparison, India had only two listings: Sify and Rediff.

Further,

The mobile market gave the Chinese portals a much-needed shot-in-the-arm, and they thrived. Over time, broadband started picking up and with it came both Internet advertising and online gaming. In addition, China had a much larger number of well-capitalized Internet companies, which also resulted in a wider range of services. In contrast, the boom-and-bust in India was all too short. There were only a handful of VC investments and the result was that the Internet services growth has remained stunted in India.

Well, I d agree to some extent there. There are two issues to the same that merit consideration.

First and the foremost is that Chinaâ€™s infrastructure roll out is bankrolled by Government. Even the loss making companies that have borrowed heavily from the banks. In the event of failure, they have added to massive Non Performing Assets- the bane of any economy.

Given the fact that private initiatives in the infrastructure set up remains next to nil, I would be glad if some one really enlightens me to the actual state of affairs there. As to how these telecom companies differ fundamentally from each other.
Today, we need to speed up the infrastructure roll out if we can claim our space in the universe. Given the moribund government (and its lame duck leftists friendâ€™s) I really doubt that this would be a reality. But perhaps, Rajesh echoes my own thoughts in the final para:

India needs to build the right infrastructure for its entrepreneurs to succeedâ€¦.We need to look inward â€“ at the market that exists within India. But for that, the infrastructure and user base has to improve dramatically and rapidly. Only then can we dream about creating the next big successes out of India. Else, we will be playing second fiddle to Chinese entrepreneurs and companies because armed with their domestic success; they will be in a good position to target India.

This is something that I am loathing to accept that India would become a happy hunting ground for the â€œdragonâ€.

Leave a comment Comment RSS | | Author: Abhishek |

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Anon 3 years ago 1 point
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You make good points. India should invest in infrastructure. And in bringing more transparency and removing corruption. The Government of India should work to get rid of useless bureaucratic procedures (like need for too many licenses)...

Xtremebytes Webmaster 3 years ago 1 point
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It seems like your anger on the Chinese is too high. Why don't you go to there yourself, understand the economy from inside and calm down on your pointless arguments? Do not ask me to explain their government policies because I am not their representative.

http://www.xtremebytes.com/

Xtremebytes Webmaster 3 years ago 1 point
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Indian governments are way too bureaucratic and public is not aware of what is right for themselves. People from affluent social class can afford of many things easily compared to those from the middle class and that is mainly because of bribery and associated corruption, irrespective of the ruling government. There is no common public opinion on certain things and there's no organised way of voicing that to get a problem addressed by the authority. Added to this is an inherent frustration in minds like you that think that we should have resembled the western developments without quite appreciating that there are many problems in several western countries to which you'll turn a deaf ear just because you won't like to hear them.

Recently, in a IEEE journal I came across an article which points out how a home grown software company is working wonders in Ghana by addressing the local problems and providing localised solutions. The owner of the company had his University education in the USA but didn't stay back there enjoying his own comfortable life. Instead, he went back to Ghana to start something really revolutionary. How many Indians think like that? Unfortunately, even if this doesn't sound very nice to you, many Chinese do think like that. So if the Indian sharp intellect is draining out from the country for ever and waiting for the government to bring technological wonders, then it will be slow because the people left back aren't either motivated to work (because their intellects haven't been awarded) or they are not good enough! Problem is in the educational scenario - the education system needs to be revolutionised, when people are only thinking of uplifting the standards by industrial developments. If you get the chance to successfully run a startup company in India and have it established in few years time, you'll live in a different social class. How many times would you care about someone from your earlier social class trying to be exactly as enterpreneur-like as you? This is exactly why India is slow to achieve something - lack of organised efforts!

Cost minimisation is an art that many companies in the world like to learn. Comparatively cheap labour is one major factor in the procedure. You like to blame the Chinese government for its cost reduction firstly, because it can hurt the Indian economy and secondly, because they are communists. Let's face it: it's just because it is a different culture, a different "working system" with a lot of international attention towards their development, you feel jealous of them. How many times have you complained of Japan when they used to replicate expensive electronic technology from the west and produce similar products at lower prices? Suzuki is a live example and yet, Maruti-Suzuki is one of the most widely used cars in India. Could that have been possible with Audi? Or Mercedes?

Back to square one: organised efforts towards betterment of the economy, much better education system, ability to accept "no" without frustration but a greater motivation towards more work, etc. are exactly what's going to get India succeed. What won't is shooting out frustrated comments in forums viewable to the whole world like you do.

Enough said.

http://www.xtremebytes.com/