What killed off the western communications vendors?
According to one observer, they fell to excessive pursuit of short-term profit and neglect of long-term investments; ill-considered acquisitions of non-core businesses; and the sell-off of key assets to try to reverse the decline.
That view is from Wang Jianzhou, a retired Chinese official and telecom exec who spent nine years as the head of both China Unicom and then China Mobile in the 2000s. Few people had a closer view of the decline and fall of Lucent, Alcatel, Nortel, Motorola and Siemens.
In a recent guest lecture at the Tsinghua University School of Finance, Wang said he had dealt with all of those CEOs.
"They wanted to innovate, and they knew how to innovate," he said. But they were dominated by investors and their expectations of continually rising stocks. "In the end, they weren't beaten by competitors ... they were beaten by Wall Street."
Wang's isn't the only view on this topic but, with the US rushing to create alternatives to Huawei, it's important to take on different perspectives about how we got here.
Apart from understanding what the hell happened to the vendors, we also need to ask about the rise of Huawei.
The Chinese firm has had the benefit of generous government officials and banks. But you don't become a $120 billion business on largesse alone. If you could, China would have dozens of Huaweis.
Which should remind us that Huawei is a rare China success. Beijing's efforts to create global champions in every industry have largely failed.
The biggest factor in Huawei's success is probably the competitive domestic market. Without being forced to battle global players in its early years, it might still be selling imported PBXs.
(There's an obvious contrast here with China's heavily protected telecom services sector, where competition is so weak government officials ride shotgun on the operators to ensure better prices and services.)
The other lesson is that some things are too important to be left purely to the market.
Of course in China the commanding heights of the economy are state-driven. Little that is important is left to the market.
In the US, in the wake of the telecom crash in the early 2000s, neither government nor the tech sector paid any attention to comms infrastructure for years. Then in a few whiplash-inducing weeks 5G suddenly became a national security imperative.
It makes sense to see 5G and fiber networks as critical to economic and national security – the wonder is how they got overlooked for so long.
It’s heartening to see the US going past the idea of building a national champion and pursuing different ideas.
But creating Huawei alternatives will take time and will involve a lot of work – in particular collaborative work.
Forging a new disruptive architecture is a fine idea, but not if it cuts across other initiatives for the benefit of the US (see US sets up new open RAN group amid telecom slugfest with China).
Likewise, those countries that want standards that aren't dominated by Huawei and China Mobile will need to cooperate in a sustained way in 3GPP and other standards forums.
They will also have to stump up some serious cash to counter China's big lines of export credit.
All of these require leadership, alliances and vision. This is really just a beginning.
— Robert Clark, contributing editor, special to Light Reading