aul, a friend in the telecommunications sector in the China market, was recently telling me about his company’s interest in developing the India market. Seems the mobile phone-station industry in which the company is involved in China is quickly reaching saturation; not only in terms of the sheer number of installations in base stations the company has made, but in the rapid growth of competitors in the field that have knocked off their products. India, he said, has so much untapped potential for mobile phone coverage. I suggested the development curve in India for the industry will also be a lot longer than in China: political, regional and social incongruities in India will make for a more gentle increase in penetration than China’s full-throttle infrastructure investments.

One of the company’s main competitors is Huawei, which recently tried an acquisition of 3Com in the States. The acquisition failed, because Congress blocked the transaction on the grounds that protecting 3Com’s property was in the national interest. 3Com has installed many of the routers and backbones in the world that makes the internet go-round.

“Huawei are bad guys,” Paul said. Paul is European. “They fired so many senior people before the end of last year, to get round the new labor law.” The new labor law has it that employees must be paid one month’s salary for every year they have been with the company. Firing staff before the new year, then having them re-apply for jobs at lower pay grades is a way for a company in China to save loads of cash.

“We hired a lot of those guys,” Paul said proudly.

I’ll bet some of them were already quite intimate with Paul’s product line. Perhaps had even improved on the designs!