Rebirth Tokyo 1986

Chapter 400: Not Ignoring Any Collaborator

Since Xinghai Communications invited Huawei, it's unlikely they would be foolish enough to forget ZTE.

The day after Hou Wengui left Ren Zhengfei's office, he flew to Tokyo.

Kenji Ono picked them up at the airport as usual, and they first visited the Xinghai Communications Laboratory to showcase their technological advantages in the communications field.

"It's so beautiful! I wonder how much it cost to build this lab?"

Even Mr. Hou Wengui, the president of ZTE, was shocked and looked at the laboratory with admiration.

At that moment, he was incredibly excited and desperately wanted to make it happen in his own home.

"Not much money, less than $5 million."

The laboratory belonging to Xinghai Communications is not even among the top 5 in the entire Xinghai Group.

The first three are laboratories directly managed by Xinghai Group, while the fourth to sixth are the three major laboratories under Xinghai Technology.

Xinghai Communications Laboratory can only compete with the company's third-tier laboratories, such as LCD laboratory, food laboratory, and software laboratory.

Therefore, in terms of both scale and size, it is far inferior to the group's directly affiliated laboratories.

"It's so expensive, it seems like we won't have a chance anytime soon."

What Kenji Ono considered the Starry Sea Communications Laboratory not expensive, Hou Wengui thought was extremely extravagant.

He secretly wondered if ZTE would be able to build it in 10 years.

It is clear that Mr. Hou Wengui underestimated the speed of development of China's telecommunications market. He will have sufficient funds for similar construction within 3 to 5 years, not 10.

China's telecommunications industry will develop at an extremely rapid pace, and related companies will be able to take advantage of this opportunity to achieve a double harvest of revenue and profits.

In fact, not only in China, but the global telecommunications market was developing rapidly in the 1990s.

In Japan, for example, only a few percent of the population had mobile phones in the early 1990s. By the late 1990s, that number had exceeded 70%.

Most adults use mobile phones.

The situation was similar in the United States, and in fact, because Motorola was an American company, its communication technology developed even faster.

It can be said that the speed of progress in the field of communications worldwide far exceeds the imagination of everyone except Masato Takeshita.

This is also the charm of the Third Technological Revolution: it greatly increases the speed at which the world can acquire information.

After the laboratory visit, the two parties will now hold a small negotiation at Xinghai Communications.

"Could you tell us Huawei's terms?"

"I'm sorry, Xinghai Communications can only guarantee that the cost of your financing is equal, and will not disclose the details of the negotiations with partners."

Ren Zhengfei did not tell Hou Wengui about the mobile communication base station patent that his company had purchased, and naturally, Kenji Ono did not either.

The later Hou Wengui and others discover this news, the more money Xinghai Group can make from it.

Of course, Xinghai Communications wouldn't ask for too much. After all, they're sister companies, and they might need each other's help in the future.

If the relationship becomes too strained, even if the other party agrees to the request, they will pay a heavy price.

However, this is all considered good; if they were to become mutually exclusive and hostile like Sony's subsidiaries, the outcome would be far more dismal.

"I see. Then I wonder if we could obtain some patent information about the GSM system?"

Ren Zhengfei is resilient and shrewd, and Hou Wengui is no less so. The only difference is that one prefers risk-taking, while the other takes a more stable development approach.

Therefore, like Huawei, ZTE also chose to acquire more communication technology patents to enhance the company's technological foundation.

However, ZTE only required 2G technology, unlike Huawei which provided the full suite.

"Of course, but you'll need to pay a certain fee."

Xinghai Communications lacks GSM-related technology, but that's not important. Nokia, controlled by the Xinghai Group, is very strong in this area, and Kenji Ono can help facilitate the deal.

He responded in the same way to similar conditions previously proposed by Huawei.

“No problem, we are willing to pay with the funds raised in this round of financing.”

The European-led GSM mobile communication system has been deployed worldwide, and a bright future awaits everyone.

ZTE is indeed conservative, but it is also very willing to spend money for immediate benefits.

In addition, Mr. Hou Wengui also valued PHS technology more than Mr. Ren.

He viewed PHS (Personal Handyphone System) technology as the key to ZTE's rise and as the origin of ZTE's expansion into overseas markets.

Because it's obvious to anyone with eyes that the PHS (Personal Handyphone System) technology is very suitable for promotion in developing countries.

Equipment is cheap, calls are cheap, base stations are cheap—everything is cheap.

Crucially, it can leverage existing landline telephone lines for development, which greatly attracts the attention of the strongest local telecommunications companies.

Three days later, Masato Takeshita also personally received President Hou Wengui, referring to the lunar calendar.

Compared to his haggard appearance when he went to America in his previous life, he was now gentle, refined, and full of vigor.

This is normal; every entrepreneur is full of enthusiasm in the early stages. But once the company grows to a certain size, that passion often fades.

"Oh, Mr. Hou wants us to help him set up a company structure?"

"No problem, that's what we investors should do."

Good investors do more than just provide financial assistance; they also help the companies they invest in recruit top talent and build effective management systems.

After all, most entrepreneurs lack management experience and have little support in this area, resulting in a chaotic company.

This chaotic situation may not seem like a big deal at first; sometimes it can even be a sign of something positive.

For example, Yahoo was a mess before it received investment, with lunch boxes left on the table everywhere after meals.

But every employee is passionate and can work in the office all day.

Things change when the company grows to a certain size. Chaotic management leaves everyone confused, which gradually becomes harmful to the company.

At this point, a formal corporate management system is needed, rather than leaving things as they are.

After all, without rules, nothing can be accomplished.

This is an inevitable consequence of every startup organization growing and expanding.

"In addition, we will also help ZTE make connections abroad and help you go global."

The emergence of the PHS (Personal Handyphone System) enabled Xinghai Communications to establish good relationships with NTT of Japan and TOT of Thailand.

If Masato Takeshita were to speak up, both telecom companies would give ZTE and Huawei a chance.

"really?"

"Of course, but your product quality needs to be up to standard."

"OK, no problem."

Hou Wengui decided to increase investment in the switch project upon returning, determined to produce a top-tier product in the industry.

When the price is right, it will be absolutely invincible in the fixed-line telephone market.

Under the same conditions, Masato Takeshita also notified Huawei. Presumably, Li Yinan has already begun working extremely hard to meet Xinghai Group's standards for external transactions as soon as possible.

Yes, due to limitations, Huawei and ZTE's equipment will initially be sold through Xinghai Group.

This is why Xinghai Communications is willing to support the two companies' external expansion.

While competitors may indeed be enemies, those who bring substantial profits are the best of friends.

Of course, this is possible because Xinghai Communications has invested in both companies.

If the two companies don't have a good relationship, even if they had a good personal relationship before, it's easy for them to become enemies. The case of Huawei and Harbor Networks, founded by Li Yinan after leaving Huawei, is a typical example of repeated feuds.

When Li Yinan first left Huawei, the company treated him very well. They not only paid him 3000 million yuan in stock compensation, but also offered him the opportunity to distribute Huawei products.

But every middleman dreams of replacing the upstream company, and Li Yinan is no exception.

He grew his business by acting as an agent for Huawei's products, and then spent a lot of money to poach Huawei employees to develop similar products.

Soon, the two companies became bitter enemies, and Ren Zhengfei launched a fierce retaliation.

Huawei would sell Harbour Networks' products at a lower price than Harbour Networks, even at a loss, in order to seize Harbour Networks' market share.

No gimmicks, just pure brute force.

Huawei's strategy was very successful. Harbor Networks, which was short of funds, soon could not withstand the pressure of operating at a loss and had no choice but to sell itself to raise cash.

The nature of a company is determined by its founder, making ZTE far easier to satisfy than Huawei.

Xinghai Communications quickly reached a preliminary agreement with ZTE, and was just waiting for Masato Takeshita to go to the Special Administrative Region to sign the formal contract.

After seeing Hou Wengui and his entourage off, Kenji Ono went to the chairman's office again.

"President, are you really that optimistic about the development of both companies?"

"That's right, the market fundamentals are there."

Communication equipment is involved in a country's infrastructure and is a powerful tool that every major power wants to control.

Even without Huawei and ZTE, given the country's emphasis on the communications sector, a world-class giant would emerge sooner or later.

Often, the environment is far more important than people.

With such a large market as China, it's natural that world-class telecommunications equipment manufacturing giants will emerge.

In fact, India and the United States also had this opportunity, but neither of them was able to seize it.

India faces challenges due to national instability, powerful local forces, and missed opportunities in the early development of the communications sector.

Of course, the most important thing is the mindset of the people. Without change, we will never have world-class high-tech companies.

The United States, on the other hand, died from the greed of capital.

The United States is not absent from the current field of telecommunications equipment manufacturing.

The world-renowned AT&T company has a strong presence in this area.

Unfortunately, driven by their own interests, the shareholders will soon demand that AT&T spin off its communications equipment business into a separate company.

Their plan was brilliant: AT&T would completely transform itself into a telecommunications operator, shedding its total asset burden.

After the newly established Lucent Technologies became independent, it was able to secure more orders.

As a result, AT&T suffered a severe setback after losing Lucent's support, and Lucent, unable to compete with other telecommunications equipment manufacturers on its own, was ultimately forced to merge with a French company.

Since then, the United States has lost its independent telecommunications base station manufacturer.

All I can say is, if you don’t seek death, you won’t die.

Japan is not so good at this, with a base population of only 1 million.

If they cannot capture the Southeast Asian market, telecommunications equipment manufacturers will be left barely surviving, relying on government subsidies to stay afloat.

This is also a characteristic of the information age, which makes it particularly easy for world-class monopoly giants to emerge.

After hearing his chairman's explanation, Kenji Ono suddenly understood.

"So that's it, I understand."

The two companies are not yet up to par, but their future potential far exceeds that of Xinghai Communications.

Putting aside everything else, the price advantage alone is enough to make Xinghai Communications admit defeat.

Of course, with the young man present in this life, he won't allow the two companies to lower their prices too much. The price must be two-thirds higher than that of similar companies like Nokia and Starsea Communications.

In this way, although both companies have a price advantage, their prices won't be as outrageous as in the previous life.

More importantly, with Xinghai Communications overseeing them, the two companies actually made higher profits.

In their past lives, Huawei and ZTE often engaged in loss-making activities to gain market share.

This brutal competition is entirely among the cheapest telecom operators.

"As long as you know."

Takeshita Masato smiled slightly and then changed the subject to something lighter.

"What stage has the construction of the PHS (Personal Handyphone System) in Bangkok reached?"

"More than 5000 base stations have been assembled, and we are currently testing the PHS signal."

"Very good, it's best to be careful."

Bangkok is the largest city in Thailand, holding a similar status to the capital of Sichuan in later generations.

A city is almost equivalent to a country; taking Bangkok is equivalent to taking Thailand.

Xinghai Communications must be extremely careful to achieve instant success and firmly establish its market position in Thailand.

"Yes, everyone has always kept the chairman's teachings in mind."

"Ah That's good."

Masato Takeshita nodded again, then changed the subject.

"Personalized mobile phones are important, but the future will ultimately belong to mobile phones. We must maintain our relationship with the president of Thaksin."

"Yes, understand!"

Kenji Ono was startled, suddenly realizing that he had indeed been a little complacent about the mobile communications market recently.

I've been intentionally or unintentionally ignoring Thaksin Shinawatra on my recent trips to Thailand, which won't do.

He decided to visit Thailand tomorrow to bridge the recent estrangement between them.

This is Xinghai Communications' foothold in Southeast Asia; no accidents are allowed.

Yes, despite Thailand's numerous shortcomings, Starsea Communications has already established Thailand as its base of operations in Southeast Asia.

Firstly, the Thai government and people are very friendly towards Japanese investment and have offered Xinghai Communications many preferential conditions.

Secondly, Thailand is the only Southeast Asian country that Starsea Communications can choose.

Singapore and Malaysia are indeed wealthier, but their telecommunications industries are state-run.

Indonesia does not have this problem and has the largest population in Southeast Asia, but the country is unstable and its national income is relatively low.

The same applies to the Philippines.

As for Vietnam, with its stricter control over the telecommunications sector than Malaysia and its relatively weak national economic development, it is even less suitable.

Therefore, after much deliberation, Thailand was the only option. It has a good economy, an open telecommunications market, and a relatively large population.

In a sense, this can be considered as choosing the best among the worst.

Of course, in this world where everyone is trying to outdo each other in terms of how bad things are, Thailand's conditions are already considered pretty good.

In Africa, the Xinghai Group would struggle to even find a foothold. The situation in every country is unstable; power could change hands at any moment.

This kind of market can only be reserved for Chinese and European companies that have a certain influence in Africa.

(End of this chapter)