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Two Sleeping Asian Giants Awaken

Ancient histories, vast lands, huge populations, and mysterious cultures were no doubt the best illustration for China and India - the two neighbouring Asian countries - in the past few decades.


However, these depictions can no longer well reflect what the two countries presently are.


Rapid social and economic development have turned the countries into two of the world's most vigorous and eye-catching economic entities.


Analysts believe that the two are continuing to give the world economy a strong shot in the arm as they move forward with powering up their uniquely positioned national economies today and economic cycles just ahead.


The huge telecommunications markets in the two countries have played the golden egg to telecom-related enterprises worldwide.


Analysts believe that India and China share command over the computer software and hardware industries.


They believe that competition as well as co-operation should be sought to take on the rest of the world.


"China-India collaboration in the IT sector will herald a new 'Asian Century' in IT," said Premier Wen Jiabao during an official visit to India on April 9 to 12.


He was in India to develop stronger economic ties between the two countries.


"I believe it is right to enhance the economic ties between China and India as the regionalization of the economy," said Wang Yuquan, president of Frost & Sullivan (China) Ltd.


He disagreed with the reported concern that competition between China and India will become intense as the two countries go all out to attract foreign investment dollars to their respective telecom sectors.


"And I don't agree that the two are fighting for international investment as each stands for a different market," Wang told China Daily in an interview.


He believes that investment can be classified into two types in general - investment on market expansion and research and development (R&D).


Investment to enlarge business scale and make profit is related to the specific market potential and unlikely to be affected by other markets, he said.


Wang said he believed that at the present stage, the Chinese market is larger compared to the Indian market.


Figures from the Ministry of Information Industry showed that China's telecoms industry enjoyed a revenue of 572.5 billion yuan (US$68.9 billion) last year, representing a growth of 11.5 per cent from the previous year.


As far as investment on research and development, Wang believes that India has a long tradition of attracting foreign investment in that specific area.


"India has plenty of talents especially in software," he said, adding that English, as an official language of India, have helped the country become quite internationalized.


India attractions


Government figures show that India had signed up 92 million telephone subscribers by the end of last year.


With a monthly increase of about 2 million new mobile phone subscribers, analysts believe that India is providing very lucrative business opportunities for world investors.


In an effort to accelerate its telecommunications industry, India has sent invitations to many of the world's biggest telecoms operators to join in the Indian investment.


To effectively attract foreign investment, the Indian government announced late last year that it would raise the foreign direct investment (FDI) ratio from the previous 49 per cent to 74 per cent in its telecom-related businesses.


These businesses include mobile phone, domestic and international long distance call and value-added telecoms services.


Analysts believe that new policies will help India to realize its goal of recruiting 250 million telephone subscribers in the coming three years.


The Indian Government expects to attract US$800 million foreign investment this year.


To cash in on the enormous business opportunities in India, a handful of world-renowned telecom operators and equipment providers are strengthening their performance there.


For example, Motorola announced last Thursday the launch of Motorola Labs India with the official opening of an applied research lab in Bangalore.


The lab, the 11th for Motorola and the company's first in India, augments Motorola's existing India R&D infrastructure of more than 1,700 software engineers.


The mandate of Motorola Labs in India is to engage in applied research in the areas of converged networks, enterprise applications and embedded systems and physical sciences, according to Padmasree Warrior, Motorola's executive vice president and chief technology officer.


This research focus supports Motorola's vision of Seamless Mobility: easy, uninterrupted access to information, entertainment, communication, monitoring and control.


"This Lab reflects our commitment to grow India as a strategic R&D hub for engineering and product development," she said.


Motorola's R&D investment in India has grown this year to US$85 million in technology and R&D, up from approximately US$50 million in 2002. It plans to grow this investment by 10-20 per cent per year. Motorola opened its first R&D facility in India in 1991.


Qualcomm Inc, pioneer and world leader of Code Division Multiple Access (CDMA) digital wireless technology, also announced in October last year the opening of a R&D centre in Hyderabad, India.


Qualcomm's Hyderabad R&D centre will support Qualcomm's CDMA chipset development activities and ongoing efforts to advance CDMA wireless technology in India and across the region.


"This research and development facility will complement and further strengthen Qualcomm's established global engineering expertise, helping us to even better meet the needs of the wireless industry," said Sanjay Jha, president of Qualcomm CDMA Technologies.


"Work at the facility will positively impact our expanding product roadmap as well as create opportunities for growth and innovation in this region," he added.


Olivier Baujard, Alcatel's chief technology officer told China Daily in an interview that Alcatel is also going to build up a research and development centre in India.


But the scale is likely to be one third of its centre in China.


"India is also a very important market for us as it is growing very fast."


"But it is still lagging behind the Chinese market and can be compared to China in the past few years."


"Compared to the Chinese market, the Indian market is still lagging behind in many aspects such as smaller industry scale and incomplete telecoms industrial chain," said Chen Jinqiao, director of the China Academy of Telecommunications Research under the Ministry of Information Industry.


For example, China Mobile has become one of the world largest mobile operators by subscribers.


Telecomd equipment providers such as Huawei Technologies and ZTE are becoming the world's leading providers, joining the international fray with Motorola, Ericsson, Nortel Networks and Lucent.


"Nevertheless, India is very quick at learning from overseas operators and telecoms equipment providers," he said, adding India is likely to seek a high growth momentum in the following years.


Chen said he believes foreign investment in China's telecoms sector will continue to fall in mobile communications, Internet value-added services, as well as in NGN or next generation of network.


"Meanwhile, the investment in China will continue to focus on the developed areas," he said.


China brands expand


As a leading telecom equipment provider, Shenzhen-based Huawei Technologies announced last week it plans to expand its business in India.


"We will continue to enhance our investment there to tap the increasing market potentials," said Huawei in a statement.


Company sources said that it kicked off its investment in India two years ago and has set up a research centre in Bangalore, the Silicon Valley of India.


"We will invest up to US$100 million in the Indian market in the years to come," said Fu Jun, spokesman of Huawei Technology.


The US$100 million will go towards setting up a manufacturing and processing factory in India as well as for investment in research and development there.


Huawei has so far recruited about 800 employees in India and by the end of this year, the figure is likely to reach 1,000.


ZTE Corp, the second largest telecom equipment maker, also has vowed to commence its own localization in India by establishing a telecom equipment factory there.


The factory is to tap the demand of the local operators for differentiated and localized services, said Zhang Renjun, general manager of ZTE's South Asian Region,


Located in Haryana, India, the first phase of the factory has been completed. When fully up and running the facility is expected to produce a total of 3 million lines of CDMA (code division multiple access) system equipment.


In addition, the factory will also manufacture other telecom equipment such as GSM network equipment, DSL (digital subscriber line), NGN (next generation network) and mobile handsets.


"India will be an ideal place for the two companies to seek further international expansion," said Zeng Jianqiu, a professor with Beijing University of Post and Telecommunications.


Zeng said he believes both Huawei and ZTE are the leading telecom network equipment and solutions providers worldwide.


He also encouraged more domestic firms to go to India to tap the huge market potentials there.


(China Daily April 13, 2005)


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