Tuesday, January 26, 2010

Google-China dispute throws the spotlight on policy issues

Since Google's recent news of security breaches and its reversal on censoring materials in China, Yahoo has come forward to say that it knew of similar security issues that originated in China. The company also said that it is aligned with Google's position on the matter. Yahoo's main partner in China, Alibaba, is calling Yahoo's public comments "reckless" and unfounded, and the Chinese government is defending its position and denying responsibility for the breaches. Nonetheless, this issue highlights the way in which government policies can have a major impact on the ability of foreign companies to do business successfully in China and other emerging markets. In this case, Google actually threatened to pull out of China altogether; it now says it is "committed to China."

Most international policy issues faced by technology companies are less publicized than this one, but they can be equally important to the profitable growth of multinational corporations. For example, China's encryption policies require that any kind of encrypted code, from BIOS to application software, be placed in an escrow account with the Chinese government. The potential impact on foreign companies in China is as significant for hardware and software manufacturers as the Google negotiations are for online companies.

The Director of International Affairs at the Semiconductor Industry Association, Anne Craib, recently told Vital Wave Consulting's CEO, "Companies need to have a well-articulated strategy and knowledgeable resources focused how they are going to handle governmental and bureaucratic challenges as they arise." Companies may have a code of conduct for international operations, but for real impact, one has to go deeper into country-specific policy and government affairs. Companies of all sizes that operate internationally would benefit from proactive and regular assessments of relevant public policies and their potential impact on continued business growth around the world.

Thursday, January 21, 2010

Role reversal, America Movil purchasing its parent company, Telmex..

by Karen Coppock

Interesting news this morning from Mexico, the GSMA reports that America Movil - a mobile network operator in Latin America will be merging with Telmex - a fixed line operator in Mexico. What is interesting about this story is the fact that Telmex is America Movil's parent company - it established America Movil (then called Radio Movil Dipsea) in the mid-1990s. Telmex subsequently spun Radio Movil Dipsea off into its own entity, which became America Movil.

Given that both America Movil and Telmex are owned by the Carso group of companies, a merger is not too surprising. What is interesting is the transition of power from the mammoth fixed line operator to the mobile operator. When I worked in the telecom industry in the mid-1990s, Telmex was king. Now the tides have shifted and America Movil is the dominant player with operations across the region. This is just one more indication of the importance of mobile networks in emerging markets.

Friday, January 15, 2010

Disaster in Haiti: How to Help

The staff of Vital Wave Consulting wishes to extend its condolences to the millions of people affected by the earthquake that struck Haiti this week. The link below contains a list of charities and organizations that are assisting in the relief effort.

Haiti Disaster Relief: How to Contribute

Many of these organizations have a long history of working in Haiti, and a number of them already have people on the ground distributing aid and treating the injured. Vital Wave Consulting does not endorse any of the organizations listed above and urges readers to do their own research before donating.