That Singapore and Shanghai seemed natural backdrops for the high-tech, high-speed, high-fashion media circus of Formula 1 Grand Prix Motor Racing surprised many Western commentators, but for those in the know it was mere confirmation of a stunning fact.

The Asian tiger economies are leaping forward faster and often further than their Western counterparts by ignoring legacy systems and embracing new digital technologies.

Certainly the trend appears set in the PMR industry, with the Asian Tiger states of South Korea, Malaysia, and Singapore biting on the frequency allocation bullet to drive forward digital deployments, and in addition, the biggest potential Asian market of all – China - favouring digital TETRA technology for civil contingency deployments including those associated with the recent Beijing Olympic Games. 

Eastern Promise

Conversely, however, whilst the centre of excellence for consumer technology supply appears to have followed the sun Eastwards, global PMR technology leadership still resides firmly in the West – despite the rapid growth in demand in digital TETRA and P25 markets throughout the region.

Certainly TETRA seems the strongest digital player in the major civil contingency markets in Asia, driven by the admirably effective evangelisation of open standards and free market competition proffered by the TETRA MOU.  Without doubt their inclusive and co-operative regime has enabled customer confidence in the standard, fuelling first-phase growth and manufacturing economies, which in turn have been driven through to customers in the form of lower pricing as a result of open competition.

P25 – the poor relation in Asia?

Contrast this with the confused proprietary wrangling associated with P25 and the pattern becomes clear. Because it is these very economies of scale that are now enabling second phase dominance of the TETRA standard over P25 in the emerging markets of Asia. 

This is a view supported in research. IMS (The Worldwide Market for Licensed Mobile Radio 2007 edition) records TETRA as both the largest shipping technology by volume and the largest projected growth technology in the region for the period 2006-2011.  The report also identifies the four major problems for P25 to overcome as: perception that equipment is expensive, lack of competition on tenders, lack of promotion and political backlash.

Market opportunities for both TETRA and P25

However, there are some very compelling technical capabilities favouring the P25 alternative; in the vast expanse of rural Asia, the coverage advantages of FDM technologies make considerable sense. 

Asia is facing a crisis of conscience rather than confidence and will need to address the rural divide. Without doubt this will drive Digital PMR into the ‘new rural territories’ most suited to P25.  So there is a very real recognition that TETRA is probably only part of an informed answer and as one examines the genuinely impressive inroads that TETRA has made in Asia, it is to the densely populated conurbations that it has been most eagerly deployed.

Nevertheless industrial history suggests further economic and social migration to the Asian Super Cities.  What was Manchester and Leeds in the 1800s is now Asia in the noughties.  So don’t expect any decline in TETRA shipments to Asia in the short to medium term. Indeed independent IMS research indicates TETRA terminal volumes set to near double year-on-year for the next four years.

Opportunity for the West

The figures clearly highlight that there is a voracious appetite for TETRA and P25 technology, with the Tiger States keen to adopt new technologies and digital standards, and this represents an exciting market opportunity for the West, and for the companies who have the radio communications experience and technical expertise to meet this demand.

Whilst manufacturers in Asia are undoubtedly making great leaps in advancing their technology, established PMR and TETRA manufacturers still have a couple of crucial competitive advantages over their Eastern counterparts.  They have the advantage of still having more technically advanced products and applications, and they also have the on-the-ground experience of delivering similar deployments in the mature TETRA and P25 markets across Europe and America.

However, simply having the right technical credentials is not enough to succeed in the fast-growing Asian marketplace.  Western radio communications companies crucially also need to have the right attitude to doing business in Asia, and the right approach to business, which is very much about being there for the long-haul, and forging solid, long-standing business relationships.

More than just delivering the goods

For those of us who have invested much of the ‘noughties’ to nurturing these high-potential but equally high-risk markets, it represents a very exciting and equally quite stressful time. We have a saying in England that you wait an hour for the bus to arrive only for three to come at once! Well here come the buses of digital market growth, the only question remaining is which players have invested in the right tickets to ride, and what steps do companies need to take, in order to make the most of the opportunities presented?

The first thing to consider when doing business in the Far East is the difference in culture - having such a different approach to society and way of life necessarily means having a different approach to doing business.

Our experience in Asia has taught us that rather then blazing in with your own approach, be prepared to study theirs and learn the Eastern way.  Demonstrating a willingness to be flexible in your approach and fit in with their system and values will stand you in good stead to achieving your goal.

Adapting to local markets

Team Simoco has always adopted a multinational rather than global approach, seeking to work with rather than overcome local differences.

The Tangible commitments such as utilising and investing in the skills of the local workforce and establishing in-country offices and facilities will be considered as major and positive milestones and should be communicated throughout your network influence.

It’s necessary to cultivate relationships with local influencers, and potential employees, and make best use of local contacts and partners with industry experience to draw in expertise and local knowledge.

A rite of passage

This is particularly the case in Asia’s biggest market – China – where market entry is a fairly ritualised and formal process. The general notion is that you are applying to enter the Chinese market; you must prove your worthiness upfront before you are allowed to prove it in practice. 

The concept of Guanxi is central to Chinese society and also to the way they do business, and refers to the importance attached to forming relationships and close networks based on mutual respect and understanding.

Influence is effected through Guanxi networks by word of mouth. Obligations and dependencies built up over many years can be ‘called on’ often from an individual indirectly connected through two, three or more steps in the network to facilitate an action or introduction. Guanxi needs constant reciprocation. Having called on the network you will be expected to actively offer goodwill back to the group. The value of your Guanxi lies in the amount of dependency you have built up rather than that which you have consumed.

When doing business in China you will engage with a social elite steeped in a planning culture. Centralised planning in China is a highly intellectual process, driven by the elite and the Chinese are good at it – and they will expect you to be good at it too. As such, careful preparation and command of the facts is crucial in order to avoid unforeseen barriers and potential cultural clashes.

Standing out from the crowd

An important part of succeeding in the Far East market is convincing key in-country and industry influencers of your purpose and capability, both in terms of differentiation from existing, local, players and your commitment to a concerted and long-run sales and marketing plan.

Your business strategy and plans need to demonstrate a clear understanding of how your products and services add value to the current products or services in your targeted market areas.

Falling at this hurdle will only prompt the question: so why can’t a Chinese or local company satisfy these market needs? You need to prove to them you can give them something they haven’t already got - or could get locally. Your product must be effective enough to make a difference.

This is one important area where established Western radio communications companies do have a distinct business advantage when looking to enter the Asian market.  Having the technical advantage and being able to supply the technically advanced products and applications to meet demand within the Tiger economies clearly puts them in a strong position.

But, as outlined here, technical excellence on its own is not enough to succeed in the Far East.  By taking on a long-term strategic approach to the market and adapting business models to mirror those in country, you will position yourselves best for an effective market entry.