Internet
ò Industry sources said more than 100 Japanese cities with a combined population of 50 million will get mesh broadband service in a massive network rollout from NTT West and Strix Systems. The network will operate in the 4.9 to 5.0 GHz frequency and provide broadband service to corporate enterprises and municipalities, with some spectrum to be allocated for use by public safety and emergency services. The deployment will utilize Strix's Access/One Network Outdoor Wireless System (OWS) and its Indoor Wireless System (IWS) to deliver wireless voice, video and data services. The installation will also be supported by design and maintenance services supplied by Network Value Components.
Media, Entertainment and Gaming
ò Nielsen NetRatings announced the launching of its online advertising measurement service, AdRelevance, in Japan. Initial results show a market worth 19.2 billion yen ($161.5 million) for display ads in September, with beauty the highest spending sector and Vodafone-Softbank the top advertiser. The report said around 3,000 online display ad campaigns were run in September, consisting of almost 6,500 banners from 1,254 advertisers. Total monthly ad impressions reached 29.5 billion. The total market value is about one fifth that for the U.S, which in September registered $771 million and over three times that for China ($51 million). The company recently launched its spider-based online display advertising monitoring service in Australia and China. AdRelevance supports full online ad planning, management and evaluation process through the delivery of e-mail alerts for news ads and campaigns as well as daily updated information that includes impressions, expenditure and a capture of the ad creative itself. The biggest spending Japanese sectors in September were beauty and the food industry. The financial securities and investment sector was third by a greater margin.
Hardware
ò Maxell announced its plan to terminate production of DVD recordable media in its current plant in Japan, and indicated that it will transfer the production to other countries. The company plans to complete the transition to the new manufacturing plants by the spring of 2007. Maxell said that the new plants will take advantage of the extensive quality control standards set by the current Japanese R&D department, in order to offer high quality DVD recordable media. Maxell will continue to develop and produce optical media in its Recording Research Laboratory in Tsukuba, Japan, although the department will focus on the development of next generation optical storage media (BD and HD DVD).
ò Sony Corp disclosed its move to cut its profit outlook by 62 percent because of battery recall costs and a larger loss of its game unit. The revision follows a series of setbacks for the electronics giant, including recalls of about eight million Sony-made computer batteries by big computer makers and a delay in the European launch of its forthcoming video game console, PlayStation 3. Sony said it will set aside 51 billion yen ($429.1 million) for costs related to the battery recalls, which it will book in the second quarter to last month. The company said its net profit posted a 93 percent decline to 2 billion yen ($16.8 million) in the quarter from 28.5 billion yen ($239.8 million) a year earlier, a 93 percent decline. Sony cut its operating profit target for the year to March to 50 billion yen ($420.7 million) from its July estimate of 130 billion yen ($1 billion). The company lowered its PSP shipment target for the year to March by 25 percent to 9 million units. In another development, rival game maker Nintendo earlier this month raised the sales target of its DS portable game machines to 20 million units from 17 million for this business year.
Ventures/Investments
ò Toshiba announced its, plans to issue 400 billion yen ($3.4 billion) worth of bonds to fund its purchase of Westinghouse. The company said the funds will be also be used for other expansion. Earlier this month, Toshiba said it would take a 77 percent stake in Westinghouse, the US power plant unit of British Nuclear Fuels, in a deal valued at $4.1 billion. Toshiba issued a forecast that its nuclear business would more than quadruple by 2020 following its acquisition of Westinghouse.
Korea
Internet
ò LG PowercommÆs CEO, denied any plans to acquire Hanaro Telecom nor Onse Telecom's broadband business, stating that an M&A is more likely to fail than succeed. Since initiating the broadband service, LG Powercomm has been able to add 1 million subscribers in about a year. The company said that its total subscribers could reach 1.5 million as early as the first quarter of 2007; a situation that the company said would enable it to return to profit. LG Powercomm said it plans to provide a triple play service (TPS) by providing VoIP early next year and IPTV starting the second half of 2007.
ò KT announced that it will be launching a VoIP service that will provide video calls by the end of this year. The VoIP phone that KT plans to introduce will have a 3.5-inch LCD screen and will be priced at between W200,000 ($209) and W300,000 ($313). KT said it aims to penetrate the household VoIP market with its new service. The company plans to start aggressive marketing of video VoIP once it is launched, initially targeting its existing Megapass users, with the company vowing to offer competitive tariff rates in the beginning to ensure that a market for video VoIP is built. Industry experts estimate the VoIP market to reach around W100 billion ($104 million) this year, with KT holding one third of this market share.
ò SK Communications Co., South Korea's leading online community operator, announced its acquisition of a 24.4 percent stake in local portal engine Empas.com for W37.2 billion ($33.9 million). With the acquisition, SK Communications, the provider of the Cyworld community service, became the largest shareholder in the internet portal and search engine. SK Communications, a unit of top mobile carrier SK Telecom, said it plans to buy an additional W45 billion ($47.0 million) worth of convertible bonds of Empas, raising its stake to up to 43 percent. Cyworld is the nation's largest community service with some 18 million people running their blog-style homepages on the site, which uploads photos, comments and other multimedia content. The announcement comes as SK Communications is accelerating its push for overseas markets. With the deal, industry observers see SK Communications making its entry into the search engine market. Other companies running major portal services such as Naver and Daum have the search technology, but not the content, and have been creating new services recently in order to remedy that. SK's acquisition of Empas may put Cyworld and Nate in competition with the big portals. Before the acquisition, there had been rumors about Google or CJ Internet buying Empas because of is unique ôopen searchö technology.
Media, Entertainment and Gaming
ò NCsoft announced the availability of a new retail package for its premier player-versus-player (PvP) massively multiplayer online PC game, Lineage II, in stores across North America. Lineage II: The Epic Collection is a special edition retail package which, for the first time, includes the original game plus all five expansions in one box. Also included in this unique, limited edition DVD set is a total of 45 days of game time, behind the scenes video footage, and a special in-game character mask only available to those who purchase æThe Epic CollectionÆ. æLineage II: The Epic CollectionÆ is available in North American retailers and at the PlayNC online store for an estimated street price of $29.9. Lineage II, which launched in April 2004, has a worldwide customer base of more than 14 million.
Mobile/Wireless
ò Wi-Bro wireless internet technology, or Mobile WiMAX, is expected to become an official 3G-service area in the global market, boosting its position in the next-generation wireless standard area. Among 3G wireless communication standards (IMT2000) approved by ITU are WCDMA, CDMA2000, TD-CDMA, UWC-136 and DECT. The US is seeking to add Wi-Bro to the existing five standards, and official adoption comes with the allocation of additional spectrums used for wireless communication. This means that KT will be allowed 2.5GHz spectrums to build a Wi-Bro roaming belt. Industry experts are saying that the adoption of wireless technology is expected to have an influence on 4G wireless technologies and next-generation Wi-Bro, or Wi-Bro Evolution.
Telecommunications
ò KoreaÆs Ministry of Information and Communication announced that it would set guidelines for the bundling of local calls. Under the ruling, KT, as the dominant carrier, will have to receive pre-approval of tariff rates for its bundled products. The government will then decide on whether the discount rate is acceptable. KT has reportedly asked for a 10 percent discount to bundled service subscribers even if the MIC is seen as allowing only a smaller discount.
China
Internet
ò Orbit E-Commerce in a partnership with its major shareholder, PureNet.TV Canada announced the signing of an agreement with United Wireless to form a joint venture for the purpose of delivering Internet Protocol Television (IPTV) products and services to United Wireless' 15 million subscribers in major cities across China. The new entity will have immediate access to approximately 15 million subscribers through its 3,000 corporate and institutional clients in China. United Wireless, a Zhejiang Company affiliate is a registered company with the Administration for Industry and Commerce of Shenzhen Municipality. Zhejiang is a twenty-year-old ISO9001 certified manufacturer of award winning high tech products and is recognized by the Ministry of Information Industry software enterprises and by the Science and Technology Department of Zhejiang Province for outstanding products. Orbit E-Commerce Inc. was established for the purpose of capitalizing on management's vision and expertise in the field of Internet-based communications systems, products, and services. PureNet.TV is a private company, incorporated in the Province of Ontario, Canada, formed to research and develop highly competitive IPTV technology and services.
Media, Entertainment and Gaming
ò Viacom announced its deal to provide television and music video content to Baidu, one of ChinaÆs biggest and fastest-growing Internet companies. The alliance between ViacomÆs MTV Networks unit and Baidu.com, one of the worldÆs most trafficked web sites, is the biggest effort so far to introduce American television and entertainment programming into China. The deal comes two months after MTV Networks formed a similar alliance with Google to distribute advertising-supported video clips over the Internet. Under the agreement, MTV Networks will provide Baidu with 15,000 hours of original video and licensed music content, much of it dubbed and tailored for Chinese viewers. For instance, many of the videos will feature artists from China, Hong Kong and Taiwan, to avoid copyright issues with American music companies, most of the music available on BaiduÆs site will come from Asia. Also, as part of the deal, Baidu said it would create the first branded area on its website, to be called the MTV Zone. Viewers will pay fees to download content, and will also see paid advertising. The report said MTV Networks and Baidu will share the revenues from downloads with music publishers.
Mobile/Wireless
ò China Unicom announced an additional 1.2 million users last month, bringing the total of its clients to 138.5 million. The company said its core business, the GSM network, added 894,000 users during the month, bringing the tally to 103.1 million. Its smaller CDMA network added 336,000 users in September, bringing its customer base to 35.4 million. According to data from the Ministry of Information Industry, China had 437.5 million mobile-phone subscribers, 367.9 million fixed-line users and 47.4 million broadband subscribers as of the end of August.
Hardware
ò TCL Multimedia Technology Holdings and TCL Communication Technology Holdings announced that they have again become profitable even as their parent company TCL Corp predicted a full-year loss. TCL Multimedia, which owns the television brands TCL in Asia, Thomson in Europe and RCA in North America, posted net profit of HK$81 million ($10.4 million), compared with a loss of HK$179 million ($23 million) a year earlier. The company said however, turnover posted a decline of HK$6.9 billion (US$888.8 million) from HK$7.8 billion ($1 billion). Its television sales went down by 14 percent to 5.5 million units from 6.4 million units. Television sales in Europe and North America fell 30 percent to 999,000 units while sales in China fell 11 percent to 2.02 million units. The company said it will restructure its European operations possibly over several months, with the details of the plan to be announced at the end of the month. In a separate development, TCL Communication said third-quarter net profit was HK$21 million ($2.6 million) compared with a net loss of HK$460 million ($59.1 million) a year ago. Total cell phone unit sales for the third quarter posted a 15 percent rise to 2.8 million units. Sales in China fell 38 percent to 558,000 units, while overseas sales jumped 48 percent to 2.2 million units. TCL Communication is 54.6 percent owned by TCL Corp, a Shenzhen-listed firm that also owns 38.7 percent of TCL Multimedia.
Telecommunications
ò China Netcom (Hong Kong), the mainland's second-largest fixed-line operator, announced a 2 percent rise in its operating revenue for the three quarters to September to Rmb63 billion ($8 billion) from the same period last year. The company said the number of its customers using its broadband service saw an additional 2.8 million to 14.2 million from the end of last year offsetting the slow fixed-line demand that saw the number of its subscribers grow by 3.6 percent from the end of last year to 119.4 million, resulting in a gain of 4.1 million customers. The company noted that more than 50 percent of its new customers came from its personal handy-phone system (PHS) business, a mobile phone-like service that operates within a limited area and competes with rivals China Mobile and China Unicom. The PHS service added a net 220,000 subscribers for the three months to September, down from the 1.5 million new users who signed up in the first quarter. China NetcomÆs residential fixed-line business lost 512,000 customers over the same period. PHS short message service traffic jumped 46 percent in the third quarter to 5.9 billion messages. China Netcom's personalized connecting tone service posted an 84.5 percent growth to 12.5 million.
Ventures/Investments
ò Gome Electrical Appliances Holdings, China's biggest electronics retailer, said that its takeover offer of HK$5.2 billion ($657 million) was accepted by China Paradise Electronics Retail. The two firms in their statement to the Hong Kong Stock Exchage said that Paradise shareholders, representing 95.3 percent of the stock, accepted Gome's offer, surpassing the minimum acceptance condition of 90 percent. Earlier in July, Gome said that it would pay $409 million in cash for Paradise and issue one new share for every three Paradise shares. After the takeover is completed, ParadiseÆs Hong Kong-traded shares will be delisted. The deal requires standard approval from China regulators. The merger is expected to give Gome 516 stores with combined sales of Rmb30 billion ($3.7 billion). Chinese electronics retailers are stepping up acquisitions as rivals including Best Buy, the largest US electronics retailer, enter the world's fastest-growing consumer market.
Hong Kong
Media, Entertainment and Gaming
ò Publishing and Broadcasting Ltd (PBL), the biggest Australian media and gaming company, announced its plan to sell half its media assets to Hong Kong-based consortium CVC Asia Pacific for $3.4 billion. The announcement followed AustraliaÆs lifting of restrictions on foreign ownership and mergers in the country's media industry. PBL, considered the biggest Australian media and gaming company stated to the Australian Stock Exchange that it has separated its media interests û Nine Network television, publisher ACP Magazine and Internet operations û into a new company that would be half-owned by CVC. Under the deal, PBL said it would receive cash proceeds of A$4.5 billion ($3.4 billion) even as the headline of the statement indicated capitalization at the amount of A$5.5 billion ($4.1 billion), making the two figures irreconcilable. The new legislation is seen as leading to a wave of takeovers, mergers and foreign investment.
Mobile/Wireless
ò SmarTone announced its introduction of a single-rate roaming charge covering China, Taiwan, Macau, Singapore and Malaysia. With the move, SmarTone-Vodafone leads other mobile phone operators in lowering international roaming charges as a response to the pressure to lower down the tariff imposed on customers. The reductions, which are also being looked at by other operators such as Hutchison Telecommunications International, could cut an important source of revenue for operators. Analysts note that SmarTone and CSL New World Mobility have the biggest share of roaming revenue among Hong Kong's mobile operators. In a separate development, an official of NTT DoCoMo disclosed that the seven-member Asia Pacific Mobile Alliance (APMA), which includes Hutchison Telecom and its Indian subsidiary Hutchison Essar, hopes to cut roaming rates. A spokesman from Singapore's StarHub, also an APMA member, said the alliance is finalising plans to offer "seamless connectivity" for mobile services among member. Analysts see other mobile groups, such as the Bridge Mobile Alliance, follow when it happens. Bridge counts Hong Kong CSL, Singapore Telecommunications, Australia's Optus, India's Airtel, the Philippines' Globe Telecom, Malaysia's Maxis, Taiwan Mobile and Indonesia's Telkomsel as its members.
Singapore/Malaysia/Philippines/Indonesia
Semiconductors
ò SingaporeÆs Chartered Semiconductor announced its return to profit after logging in an impressive performance in the third quarter with a net profit of $24.4 million for the three months to September compared with a net loss of $34.5 million in the same quarter last year. The net profit was almost double the second-quarter figure of $12.3 million and beat analysts' forecasts of $10.5 million to $12.6 million. The company said revenues for the quarter posted a 22.5 percent rise to $355.3 million against $290.1 million a year earlier. Chartered Semiconductor said that compared with the second quarter this year, however, third-quarter revenues fell 2.6 percent from $364.8 million, primarily due to weakness in the consumer sector. That weakness was partially offset by strength in the computer business even as the company claims that the sequential downward trend in revenue is expected to continue.
A week in tech is brought to you by FinanceAsia, and IRG, Asia's boutique investment bank to the telecoms, media and tech sectors. More can be found at:
www.irg.biz
¬ Haymarket Media Limited. All rights reserved.
