Chapter 990
The Explosive Growth of Xiaolingtong Business
Once this matter is resolved!
Lu Yang thought he could leave work early again today.
result,
He had just gotten up and was about to pick up his coat from the hanger and put it on.
"Dong dong!"
The knocking sounded again.
"Ahem, please come in!"
Lu Yang coughed, put down his coat, and sat back down in the executive chair behind his desk.
And he also crossed his legs.
Lu Nini pushed open the door and walked in, glancing at the serious-looking Lu Yang, and whispered, "The two bosses, Mr. Lu and Mr. Wu from Xiaolingtong, have arrived and said they have important matters to discuss with you."
Lu Hongliang?
Wu Ying?
Why did they get here?
The predecessor of Xiaolingtong was UT Skoda, and the predecessor of UT Skoda was UT Company. Lu Hongliang and Wu Ying were the owners of these two companies, respectively.
Later, because they both saw the potential in the PHS (Personal Handyphone System) business, the two hit it off and decided to merge their two companies.
We must concentrate our efforts on major tasks.
Let's do it together!
Let's work together to make the PHS (Personal Handyphone System) business bigger and stronger.
Later, another cash flow problem arose.
At that time, Lu Yang happened to be visiting Alibaba's Lakeside Company in Hangzhou!
Wu Ying approached Lu Yang, hoping he would help invest in UTStarcom, a company he was collaborating with Lu Hongliang on.
Furthermore, he gave Lu Yang a detailed introduction to the Xiaolingtong service and its prospects in mainland China.
What about Lu Yang?
He didn't know anything about UTStarcom, but he definitely remembered Xiaolingtong (a type of mobile phone service).
It's a cordless phone.
A landline telephone without a cord.
It's not a mobile phone, but it resembles one. It's cheaper than a mobile phone, and the cost of calls is far lower. It also has a longer standby time than a mobile phone. The only drawback is that it can only be used within the city. Once outside the city, the signal drops to zero, and roaming is not possible. The internet speed is also almost zero. Since the internet speed is zero, there is no question of whether it can access the internet. It is not a tool for surfing the internet.
Lu Yang was familiar with it because he couldn't afford a mobile phone in his previous life, so he used a PHS phone until it was discontinued.
He knew all too well how popular and beloved the PHS (Personal Handyphone System) was back in the day when mobile phones cost thousands of yuan and call charges could easily exceed hundreds of yuan.
So he readily agreed to Wu Ying's request, met with Lu Hongliang, and visited UTStarcom, the company they had merged.
What was the situation at the time?
At that time, the PHS (Personal Handyphone System) business was almost impossible to operate. Even with the combined efforts of the two of them, they could only barely manage to give it a foothold in Hangzhou. However, when faced with the subsequent problem of building a PHS network that could cover the entire city of Hangzhou, they simply could not afford the infrastructure costs.
But they can't afford it?
Therefore, the cooperation with the Yuhang District Telecommunications Bureau of Hangzhou City at that time would have been out of the question.
At this time, Lu Yang was invited back by them as if he were a god of wealth.
Naturally, Lu Yang didn't put on airs and readily agreed to their investment request!
He knew very well that if he didn't invest, someone else would, and that someone he had just snatched from him was an old acquaintance.
That's right, it's Masayoshi Son's SoftBank Group.
Just like he hijacked Alibaba, Lu Yang decided to go all the way. After investing in Alibaba, he invested a huge sum of US$60 million to acquire 35% of UTStarcom, becoming its largest shareholder behind the scenes.
At the time, it was opposed by Wu Ying.
Wu Ying was worried that Lu Yang would covet the company's management and kick him and Lu Hongliang, the two founders, out of the company.
Although they are the founders, to be honest, after the shares have been diluted, they are no longer as valuable as Lu Yang's. Only by cooperating can they gain an absolute advantage.
However, Lu Hongliang agreed at the time.
Because Lu Yang once said, "This $60 million isn't all for you to use to build the Xiaolingtong network. Xiaolingtong is currently only authorized in Yuhang District of Hangzhou City. Building a Xiaolingtong network that only covers the entire city of Hangzhou wouldn't cost this much. I need you to immediately send people to Japan to negotiate the full acquisition of Xiaolingtong-related technologies and patents. I don't want to wait until Xiaolingtong technology is fully deployed and becomes popular in China, only to have to pay exorbitant patent fees to the so-called patent holders. Acquire it. I, and the Century Group behind me, are your backing. Before we can completely acquire it, I will not go all out to help you expand this business nationwide, understand?"
Lu Hongliang understood everything.
So he decided to take a gamble and agree to Lu Yang's investment, because he didn't want to have to pay high patent fees to the Japanese side every year after the Xiaolingtong business became popular in China.
Lu Hongliang was the first president of UT after the merger of the four people.
Lu Hongliang agreed.
Even though Wu Ying still had doubts and felt like he had shot himself in the foot, it was too late. He had no choice but to agree to Lu Yang's investment plan.
At this point, UTScombe was renamed Xiaolingtong Group.
Lu Hongliang remained in Hangzhou, overseeing the construction of the PHS (Personal Handyphone System) network.
Wu Ying led a team to Japan to discuss the transfer of Xiaolingtong technology and the complete buyout of its patents.
In the blink of an eye, a year and a half has passed.
"So it's the two of them. Please invite them in. Go and make two cups of coffee."
Now, after more than a year of development, Xiaolingtong's business has grown a lot compared to before, but to be honest, it is still trapped in the small territory of Hangzhou.
It's not surprising that Lu Yang hasn't paid much attention to the project since he started investing and poured money into it.
But today, Lu Hongliang and Wu Ying actually came to visit together. This was definitely not just a simple visit. Something big must have happened. Lu Yang immediately had a feeling about it.
"Could it be..."
"Has that thing happened again?"
As Lu Yang was pondering this, Lu Hongliang's loud laughter, like a loudspeaker, came from the doorway.
Wu Ying walked behind him, speechless.
“Good news, Mr. Lu, fantastic news! We’ve finally made it through! Hahahaha…” Lu Hongliang gave the impression that he had finally seen the light of day after the clouds had parted.
She looked radiant.
Even when Wu Ying tugged at his sleeve several times from behind, reminding him to be mindful of his image, he didn't notice.
He rushed in, grabbed Lu Yang's desk with both hands, and blared his loudspeaker-like voice again.
"Mr. Lu, let me tell you a secret. The Ministry of Industry and Information Technology is about to loosen its grip on us and agree to designate PHS (Personal Handyphone System) as a supplement to fixed-line phones. The first batch of 200 pilot second- and third-tier cities is already being finalized. When the time comes, we just need to take the approval document and cooperate with the local telecommunications bureau to quickly set up PHS outlets in the area. The only problem is..."
He frowned as he spoke.
Lu Yang had long known this day would come. He had already experienced the fact that Xiaolingtong had been authorized by the Ministry of Industry and Information Technology to open its first batch of 200 pilot cities across the country.
What troubles were encountered during that time?
He really didn't know.
"Tell me, what's the problem? Do you both need to come visit me?"
"The Ministry of Industry and Information Technology requires us to lift patent restrictions, grant them free licenses, and allow other manufacturers to produce our PHS phones, so that the domestic PHS business can be eliminated from the source and monopolized by our company in the future."
Isn't that normal?
After listening, Lu Yang didn't feel surprised at all.
"Will removing the patent license affect our nationwide rollout of the PHS (Personal Handyphone System) business?"
"It has no effect, right?"
"If the Ministry of Industry and Information Technology were to step up its efforts and encourage more companies to join the Xiaolingtong family, working together to make Xiaolingtong bigger and stronger, wouldn't that be even more beneficial for the development of our business?"
"I think Mr. Lu, you've misunderstood. Our main business is building base stations in cooperation with local telecom companies. Selling base station equipment, maintaining network systems, and even sharing the communication fees generated by subsequent PHS services should be our main source of income in the future, rather than chasing after selling as many PHS phones as possible, right?"
Lu Yang explained the details to Lu Hongliang and Wu Ying, who walked up behind him.
Upon hearing this!
Lu Yang's words actually make a lot of sense.
Suddenly there was nothing to hesitate about, and all the worries and concerns from the journey vanished in an instant.
Wu Ying patted Lu Hongliang on the shoulder from behind, "I told you, this is in our best interest, and President Lu will definitely agree. You insisted on dragging me here, didn't I? I was right."
When UTScomda changed its name to Xiaolingtong Group, it did indeed raise some questions about the influence of its two founders, giving people the impression that the company had changed its backer.
In reality, however, the company's management is still firmly in their hands.
Firstly, even if the two of them combine their shares, they still hold the largest share of the total equity.
Secondly, Lu Yang has many businesses under his name and never thought of squeezing the two out or taking control of the mobile phones they had!
If we were to actually do that, we wouldn't be able to find a replacement.
Therefore, Wu Ying's statement was not wrong. Even if the two of them did not consult Lu Yang or ask for his opinion, they could still decide the future development direction and path of Xiaolingtong!
Lu Hongliang, however, did not think so.
Despite Wu Ying's attempts to stop him, saying it wasn't necessary, he insisted on coming.
As for what Lu Yang thinks?
He certainly trusted Lu Hongliang more; otherwise, why would Lu Hongliang be appointed as the president of the new company?
Wu Ying, at most, can only run errands outside, acting as a mouthpiece for external communication and a messenger for communicating with competitors.
Lu Hongliang ignored Wu Ying and continued enthusiastically to Lu Yang: "Then, Mr. Lu, what do you think we should do next to quickly secure the base station network deployment in two hundred cities across the country? To be honest, I've been thinking recently about whether the company needs to launch the next round of financing as soon as possible."
So that's what he meant.
Faced with this question, Lu Yang couldn't think of a good answer for a moment and fell into deep thought.
What was UTStarcom doing at this time in my past life?
How come I've never heard of them being short of money?
By the way, they've successfully listed on NASDAQ in North America.
Having successfully gone public, they are no longer short of money.
But now, because of its own intervention and the butterfly effect, UTScom, while changing its name to Xiaolingtong Group, no longer rushes to conduct multiple rounds of financing due to a lack of money, and forcibly lists on NASDAQ despite the Nasdaq stock market crash and the global financial market in a state of turmoil!
In other words, the current Xiaolingtong Group has more options.
I've figured out the reason.
After a moment of contemplation, Lu Yang said, "Why don't we hold off on financing for now, wait and see what happens, and wait for the Ministry of Industry and Information Technology to issue a policy? If it still adopts the cooperation method we used with the Yuhang District Telecom Bureau of Hangzhou City, which requires advance payment for equipment and instruments, then it won't be too late for us to raise funds."
If the latter adopts a cash-on-delivery method, purchasing our equipment in bulk, and we only need to install and debug it on-site, and then maintain it afterwards, even if we are simultaneously serving two hundred cities, it won't cost much, and we can even make a profit, achieving our first bumper year since the company was founded.
Lu Yang then looked at the two of them and asked, "What do you two think?"
Of course!
There is nothing better than this.
Lu Hongliang's thoughts were unknown, but Wu Ying was overjoyed.
What was he most worried about before he came?
It's not that they're afraid Lu Yang is rich and young, and he likes to throw money at problems whenever they arise. What if he ends up becoming the company's sole major shareholder while they become employees?
Wu Ying's concerns were not unfounded.
Lu Yang is already the largest shareholder of the company, holding as much as 35% of the shares. If the company goes through several more rounds of financing, and Lu Yang is the one who pays the majority of the shares each time, then it won't take more than two rounds for the two founders, even if they combine their shares, to surpass Lu Yang's.
At that point, why would we need anyone else to seize power?
They don't have to do anything; Xiaoshentong Group has automatically become a holding subsidiary of Century Group.
But now, Lu Yang has actually given up such a good opportunity and suggested that they temporarily suspend fundraising.
It was quite unexpected!
But Wu Ying was genuinely very happy.
Overjoyed, he forgot many of his concerns. "Mr. Lu, since we've come this far, why not benefit our own people instead of outsiders? Would you be interested in having other subsidiaries of your group join the Xiaolingtong family?"
Since opposition can't be stopped, why not do someone a favor beforehand?
Lu Yang hadn't expected Wu Ying to say that, so he stared into his eyes and said, "Mr. Wu, if you put it that way, then I'll have to take it seriously."
Of the subsidiaries under Century Group that are capable of doing PHS (Personal Handyphone System) business, only Century Electronics and Langke Century remain after the restructuring in the past year. However, Lu Yang plans to let both Langke Century and Century Electronics enter the mobile phone business in the future, including PHS.
It seems like it might not be a bad idea! (End of Chapter)