Telecoms II

An article from the Economist (Technology Quarterly) says that “new wireless technologies that render bandwidth irrelevant could kick-start a revolution in communications bigger than the internet”. It dubs this new wave as Telecoms II:

Unlike its predecessor, this is all about freeing people from having to plug into telephone lines and cablesand letting them have speedier data connections than they ever imagined. It all started with digital cell phones a decade ago, but has now exploded into a panoply of radio technologiesfrom wireless LANs (local area networks) to smart antennae, ultrawide band transmission and mesh networks. Despite the parlous state of the telecoms sector, the pace at which start-ups offering the new WLL (wireless local loop) technology have been raising money shows that at least the market has faith in the future. Apart from providing an alternative over the last mile to homes and offices at modest cost, WLL delivers internet access ten times faster than the speediest broadband connections the telephone companies or cable TV firms can offer.

A related article on WLL says:

Many see it as an ideal solution to the local access problem. Radio waves already reach everybody’s home or office. So there is no need to dig up streets or shoehorn data into a system designed for voice. Of course, most WLL systems require their own dedicated radio frequencies, but regulators have been fairly generous with theseselling enough licences to competing WLL operators at a fraction of the prices paid by mobile-phone operators. Some can even use the same free, unlicensed frequencies in the 2.4 and 5 gigahertz bands as Wi-Fi, opening up the market to anyone.

What is interesting is that the new generation of WLL technology from companies like Soma Networks does not require line-of-sight or outdoor installation, and can transmit at speeds of up to 12 Mbps. Soma has built its technology around UMTS, a 3G standard. Other companies in a similar space are IPWireless, Navini and Flarion.

China’s Legend

From Knowledge@Wharton comes a story on the globalisation efforts of China’s largest PC maker, Legend. It has a 27% market share locally, nearly thrice that of its nearest competitor, Founder. [About 10 million PCs were sold in 2002 in China.] How did it win?

Legend got to where it is today thanks to a uniquely Chinese combination of business excellence and aggressive protectionism. Speaking about the origins of the company in an interview with the McKinsey Quarterly in 2001, Liu Chuanzhi, Legends chairman, said that when China introduced its market reforms in 1984, he grew excited about setting up a computer company. Initially Legend was a distributor of foreign PCs; it started making and selling its own in 1990. As a distributor for Western brands, Legend discovered that the average Chinese couldnt use a Western computer because the software required sophisticated knowledge of English, Meyer says. People wanted turnkey systems, so Legend started making turnkey systems for different markets in China. And while emphasizing cost, their margins were pretty good.