India as Cellular’s First World

Dana Blankenhorn writes that in the case of cellular, the US is the third world.

The First World for cellular exists in places like India. A broadband cellular provider in that country has launched live TV feeds, using EDGE (Enhanced Data Rates for GSM Evolution), a 3G enhancement to the old GSM standards.

Nokia and Ericsson are the partners of this cellular operator, which is called Idea Cellular. I just got finished documenting an Ericsson phone, and my own Nokia. Both party like it’s 1999.

Two things are driving this. First, because there are no wired incumbents to protect (remember that U.S. cellular leaders Cingular and Verizon are both tied to Baby Bells) this is new service, not redundant service, for many people. Second, since there is one, non-proprietary standard, you get enormous competition among re-sellers who ride on the cellular networks…they can buy magazine or newspaper ads efficiently. U.S. carriers are still locked into proprietary standards, and have absolute control over much tinier markets that result.

The bottom line is that mobile connectivity is up 160% in India, year over year, against growth of just three percent in the wireline business. Despite the fact that India started with a single publicly-owned telco while the U.S. supposedly had competing private operators, their digital divide is being bridged, with 86% of villages now getting some form of phone service.

Standards work. Open networks work. Competition works. This is India’s experience.

Meanwhile, the U.S. has proprietary networks, no real standards, and no real competition. Thus it continues to lag behind.

China’s MIT Upgrades Itself

WSJ writes:

These days Tsinghua resembles an American university in many other ways as well. Through aggressive poaching of star faculty from around the world, fund raising, infrastructure building and curricular reform, Tsinghua is now transforming itself from a socialist-style polytechnic into what it calls a “first-rate world university.”

The goal of these changes is twofold: to create a great Chinese university to match the country’s global ambitions, and to produce the kind of independent, creative thinkers the country’s increasingly free-market economy demands. While students still must take courses in Marxist philosophy and “Mao Zedong thought,” professors cite Tsinghua’s relatively open atmosphere, which allows them to research and teach on sensitive social problems like AIDS, unemployment and population control, as a big asset.

These days, Tsinghua’s professional schools feature curricula heavy on American-style case-based pedagogy, often employing Westerners as instructors.

John Thornton, a former co-chief operating officer of Goldman Sachs Group, serves as director of global leadership at the management school; Laurie Olin, once chairwoman of the landscape architecture department at Harvard University’s Graduate School of Design, now heads the same department at Tsinghua’s architecture school. There is even a Princeton-inspired Institute of Advanced Research, now headed by Andrew Chi-chih Yao, a Taiwanese-born computer scientist recruited from Princeton University earlier this year.

On-Demand Service Providers

Michael Cot points to a free IDC report: ” Disruption from Below: The Emergence of mazon, eBay, Google, and Yahoo! as On-Demand Service Providers.”

Am excerpt from the report:

Our view [is] that there lies the potential for some current and future unknown players to either displace or beat to the punch the traditional set of IT services companies currently pursuing a model of delivery referred to as utility computing (which appears likely to become the underpinning of the future means of provisioning IT services). The combination of these newer entrants and the disruptive nature of utility computing could radically alter the landscape of players traditionally branded as “the” IT services companies.

“The combination of newer players and the disruptive nature of utility computing could radically alter not only the landscape of current players known for provisioning IT and even communications services, but also the ecosystem of players and the fundamental process of provisioning such services,” said David Tapper, IDC research director, IT Outsourcing, Utility, and Offshore Services. “Success will depend on how well players transform their businesses in such areas as accessing new sets of customers likely to buy these services, ensuring that ecosystem partnerships support ‘cannibalization’ of older services (and technologies), and aligning brands with the appropriate value chain position.”

As the IT industry comes to grips with the notion that its capacity (processing power, storage, software, network bandwidth) may increasingly be delivered in the form of on-demand, outsourced utility services, the questions grow about which players are positioned to become the leading suppliers in this transformed landscape. Several large traditional outsourcing firms, including IBM Global Services, EDS, and CSC, have made major investments in building integrated platforms from which to deliver utilized IT. While these firms would appear to be well positioned to become the dominant figures in an on-demand world, however, IDC notes that other players namely online firms such as Amazon, eBay, Google, and Yahoo! are already delivering on-demand services on a global scale and have the potential to disrupt the traditional power players in the IT technology and services markets. These online firms are often lumped together with the dot-com failures of the past and viewed as interesting, if insignificant “Internet retailers.” In reality, they have built their own platforms with which they can leverage the scalability and direct sales aspects of the Web, and they are not waiting for permission to move up into becoming business process outsourcers, in many respects. These firms’ growing success at delivering on-demand services speaks to the opportunity for other types of companies business process outsourcing (BPO) firms like ADP; telcos like AT&T; large, consumer-driven, yet industry-savvy conglomerates like GE; and IT sales and marketing champions like Dell and Microsoft to become significant players in the forthcoming on-demand universe.

Confronting Change

One of the good things about the blog is the people you meet (virtually). I got an email recently from Andrew Canton (based in London). Here is an excerpt from one of his posts on confronting change:

To say that we are confronting change on an unprecedented scale cannot even begin to describe the disruptions facing us in the coming decade. From the continued growth and pervasiveness of the Internet and the resulting changes in consumer attitudes and expectations towards business and government to the constant introduction of new innovations and technologies across countless industries we are living through one of the most momentous times in the last century.

In a rapidly changing environment, there are those that proactively rally their resources in a quest for “opportunities” across new frontiers while others only respond reactively to “threats” while trying to protect their existing dominion.

True leadership (usually closely followed by economic success) can only be found amongst the first group as the other scrambles and struggles to eat from the leftovers.

Here is what Andrew has to say about entrepreneurs:

An entrepreneur can never start a venture with a business plan premised on threats. He/she will always have to start a business in the pursuit of new opportunities as no investor will be prepared to fund them otherwise.

So what’s so important about having entrepreneurs pursuing these opportunities? Well there’s one simple prevailing fact about entrepreneurs: in order to succeed they know that they must create something that is somewhat or significantly better than what is currently available because customers will otherwise have absolutely no reason to flock to their products or services. Entrepreneurs are the ones who risk to dream the future, who have the courage to succeed, the ones who must have the motivation and energy to make it work because there isn’t a nice ‘cushion’ to sustain them if things don’t work out – they have to make it work. Naturally not all entrepreneurs will approach their business in this spirit and may also fall in the ‘play to play’ category but the odds are that most will.

Urban-Divide Divide

The New York Times writes about China, but it is equally applicable in the Indian context:

China has the world’s fastest-growing economy but is one of its most unequal societies. The benefits of growth have been bestowed mainly on urban residents and government and party officials. In the past five years, the income divide between the urban rich and the rural poor has widened so sharply that some studies now compare China’s social cleavage unfavorably with Africa’s poorest nations.

For the Communist leaders whose main claim to legitimacy is creating prosperity, the skewed distribution of wealth has already begun to alienate the country’s 750 million peasants, historically a bellwether of stability.

The countryside simmers with unrest. Farmers flock to the cities to find work. The poor demand social, economic and political benefits that the Communist Party has been reluctant to deliver.

In recent years, officials have devoted the nation’s wealth to building urban manufacturing and financial centers, often ignoring peasants. Farmers cannot own the land they work and are often left with nothing when the government seizes their fields for factories or malls. Many cannot afford basic services, like high school.

This year, the number of destitute poor, which China classifies as those earning less than $75 a year, increased for the first time in 25 years. The government estimates that the number of people in this lowest stratum grew by 800,000, to 85 million people, even as the economy grew by a robust 9 percent.

No modern country has become prosperous without allowing some people to get rich first. The problem for China is not just that the urban elite now drive BMW’s, while many farmers are lucky to eat meat once a week. The problem is that the gap has widened partly because the government enforces a two-class system, denying peasants the medical, pension and welfare benefits that many urban residents have, while often even denying them the right to become urban residents.

TECH TALK: A Tale of Two Summers: 1994

Recently, I was standing outside a Barista waiting to meet a friend. It was a Saturday evening. My friend was running late. I decided to use that spare time to think about the Tech Talk that I was going to write the next day. At any point of time, I have a list of 20-25 possible topics ideas which come up in conversations or general reading. As I went through the list, I thought of 10 Years of the Internet. (Of course, the Internet is a lot older, but it was in 1994, when the Internet transitioned from an academic network to commercial use.)

I was thinking of a series which would look back at the Internet in 1994, trace its evolution over the past decade, and look ahead to what we can expect in the future. It seemed like an interesting topic. After all, those among us who use the Internet cannot imagine life without it. From email to news, from connecting with family and friends to business associates, the Internet has become the lifeline for many of us.

As I thought about the Internet, my mind went back to the summer of 1994.The Internet was far removed from my life (other than using email through an email account on NCSTs servers, along with the Usenet newsgroups). I had a business developing image processing software. That was just not working. Efforts to sell our Image WorkBench solution to metallurgists and medical institutions had been largely unsuccessful. It was two years since I had returned from the US to set up a business in India, and I could see that we had gone quite wrong in our business activities.

As I started thinking then about what to do, I started reading various magazines trying to spot future trends. It was then that I came across the Internet as the new information highway. For all practical purposes, Indias linkage to the Internet then was through ERNET, the educational and research network. Access to it was limited.

Some more reading and thinking led me to put a concept called SpiderNet in place I imagined it as a network that would have all kinds of India-specific information which people could use their computers to dial into. Though I didnt make the link then, it was a kind-of private CompuServe or AOL. The only operating network then in India was Business Indias aXcess. So, there seemed to be plenty of opportunity.

The summer of 1994 was when I put together my first ideas for an electronic news and information service. As the months passed, the SpiderNet ideas gave way to IndiaWorld, an Internet-based news and information service primarily focused on the Indians outside India and others interested in India. Instead of trying to set up our own network, we would use the Internet as the distribution medium.

As I stood outside Barista, still waiting, I realised the amazing similarity in thinking that I had just experienced over the past few months in the summer of 2004. Ten years apart, I had spent two summers trying to imagine a very different future from the one we saw around us.

Tomorrow: 2004