For many years we in Europe have been somewhat smug about inventing and building GSM and its follow-on family of standards into a worldwide success.
On the back of this innovation, Vodafone, Orange and Telefonica have become global players, and technology vendors, such as Ericsson and Nokia, have built themselves into world-class leaders in their fields. A very creditable performance with a significant positive impact on European GDP.
But I feel that this European dominance of mobile communications--which was part illusory--will begin to fade as Asia, and specifically China, increasingly asserts its influence on the future direction of this industry.
While many Asian countries will become powerful players in the cellular world, China would seem destined to become the leader due to its scale and manufacturing capacity. While it has attempted to establish home-grown technologies as world standards, its migration to TD-LTE could see it move to the forefront and reset the 4G agenda that was being established by U.S. and European operators.
The force behind this is simple--scale. There are around 770 million mobile subscribers in China with around nine million more being added each month. Over 230 million consumers access the internet from their handsets, and each year over 600,000 engineering graduates become available to Chinese firms.
These statistics dwarf the U.S. and Europe--and yet the notable Chinese economist, Dr. Fan Gang, maintains there will be further strong growth in consumption driven by a fast-growing middleclass. According to Gang, he expects the Chinese economy to grow at around 8 per cent for the next 20 to 30 years. "We are accused of not being innovative and copying from others. Most Chinese companies are in catch-up mode and are investing heavily in education and technology, and I would expect to see much more pioneering work being done as firms move to the frontiers of world-class development."
Given the rise of Chinese handset and infrastructure vendors over the past decade, and the scale they are able to achieve from their home markets, U.S. and European vendors must fear for their existence. -Paul