Internet
ò Usen Corp said it would acquire Fuji Television Network's entire stake in Livedoor for about Ñ9.5 billion ($82 million) to form a business tie-up with the once strong internet company. The acquisition will make UsenÆs President, Uno, Livedoor's second-largest shareholder after former Livedoor President Takafumi Horie, who has been charged with accounting fraud. Usen, Japan's biggest cable broadcaster, and Livedoor said they have agreed to collaborate on net portal, financial and software business operations. Usen and Livedoor said they would set up a committee by the end of this month to hammer out the specifics of the business alliance adding they plan to reach a decision on the details by late April. With the deal, Usen is coming to into clear competition with two Japanese internet giants û Yahoo Japan and Rakuten. Usen has recently been expanding its presence in the net industry with its ''GyaO'' free TV broadcasting services, whose subscribers total nearly 8 million.
ò Softbank, an Internet services company announced that it is acquiring a 97.7 per cent stake in British mobile phone company Vodafone's Japan unit. The acquisition, when completed, is seen as boosting SoftbankÆs entry into the mobile phone business. The deal, which is worth some Ñ1.7 trillion ($15 billion), is expected to be final in a month or two. The acquisition of Vodafone Group PLC's Japan unit is seen as enabling Softbank to take over the more than 15 million Japanese users who have signed on to the carrier, as well as its mobile network. This will save Softbank, which has been successful with its broadband service Yahoo! BB, from starting from nothing. Vodafone's share of the Japanese market has declined over the past two years after it delayed the launch of 3G services. Softbank has been described as ôaggressiveö in offering broadband services in Japan and is a huge player in the country's Internet Protocol telephony market.
Information Technology
ò Macros Japan, a firm that develops and sells communication control equipment that makes it impossible to use mobile phones in specified areas, announced that it has started marketing devices for use in medical institutions. The device emits radio waves on the same frequency as that of mobile phones, thereby blocking communication with base stations. The company aims to sell 2,000 devices to 500 medical institutions over a three-year period. It will prevent voice communication and e-mails from mobile phones of NTT DoCoMo Inc., KDDI Corp. Vodafone KK and Willcom Inc. To deploy such communication-blocking equipment requires permission from the Ministry of Internal Affairs and Communications. At present, permission on the use of the devices has been issued to about 130 large facilities such as theaters and concert halls. A total of 70 facilities are using Macros Japan's equipment. The newly developed device makes it possible to have different areas within a hospital where mobile phones can and cannot be used, while not interfering with the operation of medical equipment. Each device will sell for Ñ780,000 ($6,800) and installation costs are estimated at around 200,000 yen ($1,700). The firm said four hospitals in the Tokyo metropolitan area will adopt the equipment this month.
Mobile/Wireless
ò Nippon Telegraph and Telephone Corp. announced its plans to install wireless broadband access points at a total of 900 hamburger restaurants and coffee shops by next spring. The first will become available at some Lotteria burger chain restaurants in Tokyo. Access points are also expected to be up and running at some Tully's Coffee outlets around the same time. Lotteria operates about 600 hamburger restaurants nationwide. Tully's Coffee has roughly 300 coffee shops around Japan. These firms hope that having wireless broadband access points will help their outlets attract more customers. The NTT group has already set up roughly 10,000 wireless broadband access points, centering on train station buildings and hotels. They offer a data throughput of roughly 54 megabits per second -- fast enough to play back sharp video in real time. Softbank Corp. has also been offering a wireless broadband access service. It plans to further increase the number of access points, some at McDonald's Japan restaurants, from the current 3,500 or so.
ò Panasonic Mobile Communications had the top share in 2005 domestic mobile phone shipments, according to IDC Japan, making it the first time that Panasonic Mobile took the lead since IDC Japan began the survey in 2002. The combined share of the top four companies was 62 percent, which is 6 percent rise from the year-earlier combined stake. The survey said domestic mobile phone shipments in 2005 posted a 0.5 percent rise on the year to 44.3 million units, marking a growth for the first time in two years. Panasonic Mobile grabbed a 17 percent share of the market, which is a 2.5 percent increase from 2004. Panasonic went from No. 3 to No. 1. Sharp Corp., which supplies handsets to NTT DoCoMo and Vodafone, each had a share of 16 percent, which was up 1.4 percentage points. Nevertheless, the company fell from its 2005 second-place spot to third. NEC Corp., which has been at the top since the start of the survey, fell to second place in 2005 with a share of 16.5 percent, down 0.5 point from 2004. Toshiba Corp. remained No. 4, the same spot it held in 2004. It got a 12.5 percent share.
ò Usen Corp. plans to begin a free video distribution service for cellular phones on March 27, with the goal of attracting 3 million registered users in the initial year. Videos, each lasting no more than five minutes or so, will be transmitted to users of 3G-handsets that support video and high-speed data communications functions once they register their personal information, including ZIP codes, sex and email addresses. No fees will be charged, but four short commercials will be inserted into each programme. The service will likely start with around 20 programmes, but the offerings will be increased to around 50 over time. Some of the programs will be produced specifically for the service's main target audience û women in their late teens to early 30s. But the rest is expected to come from recycled content already produced for its GyaO Net video distribution service. Offering free programs with commercials, this Internet video distribution service has attracted about 7.8 million registered users since it debuted in April 2005.
Media, Entertainment and Gaming
ò Sony disclosed its plan to delay the launch of its PlayStation 3 half a year until November, a decision that observers say will allow Microsoft to win a bigger share of the multi-billion dollar video game industry. The reason for the delay is technical. The next-generation home video game console is one of Sony's core products and its success against Microsoft's already-launched Xbox 360 is considered vital to its revival after a profit decline. Sony said the group was aiming to initially ship one million PlayStation 3 consoles each month, with the company planning a simultaneous global launch. The company said it will employ the next generation Blu-ray Disc technology - which is expected to have a greater storage capacity than rival format HD DVD - in the PlayStation 3 in the aim of making it a home entertainment centre. The decision is made despite the deadlock attending the talks on the copyright protection to be incorporated into the Blu-ray technology. Investors, however, are concerned that the company may not be able to produce enough of the new consoles in time for the crucial end-of-year shopping period. Analysts expected the PlayStation 3 to have a price tag of about $400 but would not be surprised if it retailed for as much as $500. Microsoft aims to sell 5.5 million Xbox 360 consoles by July.
Telecommunications
ò KDDI Corp. said it might lift its annual dividend payment for the fiscal period through March by around Ñ600 ($5) to roughly Ñ7,500 ($65) per share. The rise is partly attributed to estimates that parent-only after-tax profit, which is used to calculate dividends, will climb nearly 20 percent. Also KDDI's key au cellular phone business has performed solidly on rising demand for downloading songs. For the full fiscal year, KDDI is anticipated to post a group net profit of Ñ187 billion ($1.6 billion), a 7 percent decline attributed to KDDI not logging in a profit from the transfer of businesses, as it did in fiscal 2004.
Korea
Mobile/Wireless
ò A top official of Pantech said that the companyÆs prospects depend on the global markets. The Pantech Group said it aims to sell from 22 to 23 million mobile phone units valued at $3 billion. In terms of regional targets, the company aims to ship 11 million units to North America, 2.6 million to Latin America, 2.8 million to Europe, and 3.3 million to the Asian region. The Pantech Group said that when Pantech and Curitel, a handset-manufacturing affiliate of Pantech Group, advance into the same market with CDMA and GSM business, the two affiliates would cooperate to create synergy effect. Pantech Group estimated this year's global handset shipment to be 857 million units, which represents an 11.8 percent rise than in 2005. The company said demands in major emerging markets such as India, China and Africa would jump 52 percent in 2006 and 55 percent in 2007, outnumbering North America, Western Europe and Japan.
ò Three companies û Samkwang Industries, Samyoung Technology and Hansung Elcomtech û announced the signing of deals with Nokia. Samkwang Industries said it recently signed a contract with Nokia to build a mobile phone case plant in Mexico. The company is now constructing the facilities, which it expects operate by May this year. The new plant will be capable of annual 3 million units of production, and the company plans to increase production capabilities to 10 million units over the next five years. Samyoung Technology, which produces keypads used for Motorola RAZR phones, is also in final talks with Nokia to provide super slim keypads made of metal beginning in the second half of this year. Hansung Elcomtech established a joint venture with a Taiwan vendor to provide EL keypads to Nokia.
ò The government plans to add some 300,000 low-income families and the handicapped to the list of beneficiaries of its wireless telecom service discount programme, a move that will increase the total from 3.3 million last year to 3.6 million. The figure amounts to around 10 percent of the population. The Ministry of Information and Communication and 10 backbone carriers including KT and SK Telecom agreed to increase the number of beneficiaries to 3.6 million, and draw up detailed action plans by the first half of this year. Based on the electric and communication public service law, telecom operators have been providing free or discount rate service for the marginalized and handicapped. The handicapped accounted for 88 percent of some 3.2 million who benefited from the programme last year, and MIC is now seeking to expand the coverage into low-income families this year. The ministry and telecom companies aim to launch the reinforced program in the second half of this year after consultation in the first. Discounts valued at 291.6 billion won ($300.1 million) were offered in 2005, and the figure will likely increase by some 30 billion won ($31 million) this year.
ò IDC predicted that NAND adoption in mobile handsets would go beyond 80 percent by the last quarter this year, a figure that was below 40 percent in the 4th quarter last year. The figure shows how fast mobile handsets are adopting NAND memory when compared MP3 player or USB flash drives where the figure stands around 20 percent. SK Securities said that although NAND memory had successfully been upgraded to 8GB version, it was still expensive as storage for images. The report concluded that the majority of demand for NAND memory would come from music phones.
Telecommunications
ò The countryÆs top two telecommunications operators, SK Telecom and KT Corp., are looking to Asia for their expansion. SK Telecom, whose revenue exceeded W10 trillion ($10.3 billion) for the first time last year, has designated the global market as a key engine of growth for the year ahead. SK said the company would focus largely on Vietnam and China, with the aim to spend W300 billion ($309.6 million) to extend its mobile communication service across the whole of Vietnam. Within the next few months, SK said it is set to launch its wireless internet business in China. Late last year, KTF began its push into Japan with the sale of a 10-percent stake in the company to Japanese telecommunication giant NTT DoCoMo. Early this month, KT and KTF began frequent visits to Japan to discuss communication network, service and technology sectors with their Japanese counterparts. According to KTF, assuming the Chinese government gives the go ahead for W-CDMA, mobile-handset makers from the three Asian countries will start co-developing phones for the service.
China
Internet
ò China.com announced that it has entered into a strategic partnership with ProAdvertising, a leading online advertising agency in Italy, with the aim of launching the web site, Italy.China.com. The new web site is expected to offer the Chinese community access to a wide range of information related to Italy in their native language and create a conduit for Italian companies to promote their products in China. The China.com web site gets some 6 million visitors per day, with its domain name considered one of the most valuable URLs in the world. China.com, which provides mobile value-added services, internet services and online games and an 81 percent-owned subsidiary of CDC Corp., is expected to list on NASDAQ this year.
ò Alibaba.com and the Agricultural Bank of China (ABC) announced their signing of an agreement that will allow them to cooperate on e-payments. Under the agreement, the two companies will be jointly working on e-payments for both the enterprises and individuals. The cooperation is aimed at reducing the online trade credit risks and to improve the e-commerce market in China. The Agricultural Bank of China has about 30,000 branches with the leading e-bank network in the country. Alibaba runs online commerce sites that link foreign buyers with Chinese wholesalers. It has recently announced that it has no plans in the near future to prepare for an IPO.
ò A high turnover characterizes ChinaÆs online auction market, as figure in that market soared to Rmb13.9 billion ($1.7 billion) in 2005, representing an increase of 235 percent over the previous year, according to Analysys International. The report said the number of registered users for online auctions in China totaled 37.8 million, more than double the number from the previous year, with Taobao.com, the flagship site of Alibaba, contributing some 57.7 percent of the turnover. EachNet followed Taobao.com, with market share of 31.5 percent Yahoo ChinaÆs Yi Pai of Yahoo China brought in 5.7 percent, while Pai Pai of Tencent accounted for 3.7 percent.
ò Tom Online Inc. announced a 55 percent growth in its fourth-quarter net profit from a year earlier. The company, however, said its revenue growth from wireless services, which accounts for most of its total revenue, is slowing down on an on-quarter basis. Officials said they expect flat growth in the first three months of this year as a result of seasonal factors even while they look to a stronger second quarter given the forecast greater use of mobile information services during the World Cup soccer tournaments. For the quarter ended Dec. 31, 2005, Tom Online registered a net profit of $12.7 million compared with U$8.2 million a year earlier. The company said its revenue went up by 40 percent to $48.1 million from $34.5 million a year earlier.
Mobile/Wireless
ò China Mobile (Hong Kong), China's largest mobile operator by subscribers, announced a net profit of Rmb53.5 billion ($6.6 billion) for 2005, a figure that represents a 28.3 percent rise from the previous year. The company ascribed the performance to strong subscriber growth. In 2005, the company said it has signed up 20 percent more subscribers to 246.6 million in 2005, a number that accounts for almost 66 percent of total mobile subscribers in China. The company attributes its growth to greater usage of its non-voice business.
ò Haier, a leading Chinese manufacturer of household electrical appliances, and Metalink, a leading provider of high performance wireless and wireline broadband communication silicon solutions, announced their partnership aimed at developing advanced consumer electronics products. The products are seen as enabling wireless multimedia networking throughout the home. Haier is planning to incorporate WLANPlus technology in its upcoming product lines of television sets, DVRs, DVDs and other consumer electronics products. Metalink's WLANPlus is the first MIMO based (Multiple-Input Multiple-Output) wireless chipset designed to become the infrastructure network of the broadband home. Under the partnership, Haier will use Metalink's 802.11n WLANPlus technology for integration. The two companies said they would be targeting their wireless home-networking products at the growing market for digital and online entertainment, including on-demand gaming, music and video services.
ò China Digital Communication Group disclosed that it has secured a $6 million bank line of credit from United Private Equity, a venture capital firm. Good for a term of three years, it will be used exclusively for merger and acquisition activities of businesses in the 3G communications industry. The company said the credit facility would be secured by $9 million of stock of certain of the company's major shareholders. China Digital Communication Group is one of the fastest growing battery components manufacturers in China.
ò China GrenTech, a Chinese wireless product and service provider, announced an IPO plan that will include an offering of American depositary shares worth about $100 million. China GrenTech provides most of its products and services to two leading Chinese telecommunications companies, China United Telecommunications and China Mobile Communications. The company posted net income of $22.8 million in 2005 on revenue of $89 million. China GrenTech said fund to be raised from the IPO will be used to invest in research and development, expand production capacity, strengthen sales and marketing efforts, construct new facilities, and for working capital and general corporate purposes. It disclosed that net proceeds from the IPO are estimated at $67 million, based on a price of US$15 per ADS.
Software
ò Oracle China said it has announced plans to enter 26 second-tier cities in China. The plans include recruiting more partners to support the needs of mid-market organizations across key industries in China. In the initial phase of its mid-market initiative, Oracle China plans to cover 11 cities, primarily within the provincial capitals. They are Nanjing, Hangzhou, Xiamen and Fuzhou in East China, Shenyang and Ji'nan in North China, Xi'an, Urumqi and Chongqing in West China and Zhengzhou and Wuhan in Central China. According to the firm, mid-market organizations are transforming themselves from a labour-intensive model to one of automation, utilizing information technology to improve productivity and lower costs. Given this position, Oracle China said that it is in a strong position to help local companies be competitive in both the domestic and global markets. Oracle said it plans to make its presence felt in 15 more second-tier cities across China in 2006. Oracle China currently operates out of four offices, which are in Beijing, Shanghai, Guangzhou and Chengdu It maintains two development centres in Beijing and Shenzhen.
Hardware
ò Working with a group of 20 banks and financial bodies from 12 counties, China Lenovo announced that it has secured a $400 million revolving credit and term loan. China Lenovo said the syndicated loan that is good for a term of five years would be used mainly to refinance the loans it took for the IBM PC takeover last year. Arrangers and underwriters for this loan include the ABN AMRO, BNP Paribas, Citibank, HSBC, ICBC (Asia) and Standard Chartered Bank.
Semiconductors
ò CSMC Technologies Corp, a chipmaker announced its plans to push its growth by way of huge investment in its new product, power management wafers. The announcement came after the company disclosed a net loss of US$6.8 million for 2005. The mainland-based chipmaker said it would invest US$31 million to be used for the purchase of additional equipment for a recently acquired Beijing factory. The factory manufactures DMOS wafers, which are used in power devices such as battery chargers. CSMC expects sales of non-logic products, mainly power management wafers, to account for 50 percent of its total turnover this year. The company sees the Beijing factory producing 15,000 wafers monthly this year, with its full production capacity to reach 20,000 wafers a month. CSMC said its capital expenditure is expected to reach US$50 million, a figure that is attributed mainly for Beijing's equipment purchase and plant maintenance.
Ventures/Investments
ò According to China-based Zero2IPO, a venture capital research firm, mainland and foreign venture firms registered a record $4 billion of inflows last year. The research body said, however, that investments saw a 16.7 percent decline over the previous year to $1 billion. A situation characterized by venture capital overhang is seen as a negative factor for the industry because of the spiraling deal valuations it causes. In situations like this, there is a tendency also to focus on the massive deals instead of looking to traditional start-up venture funding. Recently, the mainland-based Oak Pacific Interactive announced that it received $48 million in late stage financing, which is on record the largest ever VC deal in China. An official of the Hong Kong Venture Capital and Private Equity Association and vice-president of Jafco Investment disclosed that an influx of U.S. venture capital firms was pushing up valuations.
Taiwan
Semiconductors
ò Himax Technologies, a firm that designs and develops semiconductors, disclosed a plan to register for an IPO of up to $200 million in ordinary shares. The chipmaker said it would be offering American depositary shares, or ADSs, representing ordinary shares. Himax said it intended to use net proceeds from the IPO to fund its capital expenditures of $26.1 million, including the purchase of equipment, software, and costs of construction for its new headquarters in Tainan, Taiwan. Net proceeds would also be used to repay various short-term loans of $38.4 million and for general corporate purposes. For the year to December 31, Himax reported net income of $61.6 million, up from $36 million in the prior year.
ò Taiwan's Nanya Technology announced the building of a memory chip plant at a cost of NT$83.9 billion ($2.5 billion). Initially, the 12-inch-wafer plant would have an initial monthly capacity of 24,000 pieces a year. The plant would eventually have a monthly capacity of 62,000 pieces; later, it would work on 70-nanometer process technology. Other than capacity expansion, Nanya Technology was building this advanced production plant to allow the cutting-edge technology it jointly developed with German partner Infineon Technologies to grow in Taiwan. In 2005, Nanya Technology and Infineon signed an agreement to develop jointly 60-nanometre technologies for making DRAMs.
Hong Kong
Telecommunications
ò New World Mobile Holdings (NWM) announced going into red after it posted a net loss of HK$2.7 million ($348,000) during the first half of 2005, compared with its net profit of HK$38.1 million ($5 million) it registered a year earlier. The firm is the mobile unit of New World Development that is soon to merge with CSL. The company said its turnover registered a 63.4 percent decline to HK$1.5 million ($193,000) from HK$4.2 million ($541,000). Given the impending merger of its mobile unit with CSL, NWM tagged its mobile business as ôdiscontinuing operationsö, showing a 42 percent drop in profit to HK$47.6 million ($6.1 million).
Media, Entertainment and Gaming
ò PCCWÆs Now Broadband TV's Business News Channel disclosed that it is looking to an expansion to the southern mainland, a move that is aimed at getting a broader audience. The first 24-hour business news television channel in Hong Kong said it is targeting Hong Kong's one million stock investors, but it might also explore business opportunities on the southern mainland. Its business channel is seen as the first step into content production for PCCW. PCCW said the company would continue carrying Asia Television's 24-hour News Channel until the contract expired next year.
Singapore/Malaysia/Philippines/Indonesia
Information Technology
ò Seiko Instruments will found its first foreign R&D centre in Singapore this April. The centre said it would aim toward developing data storage and other technologies in collaboration with multiple research labs under Singapore's Agency for Science, Technology and Research (A*STAR). Seiko Instruments' first foreign production site was also in Singapore, established in 1976. The firm will initially station two or three Japanese staff members at the new R&D center, which will function chiefly as a liaison office with A*STAR. The goal is to expand the staff to 10-20, mostly researchers, in 2010.
Telecommunications
ò Temasek Holdings, the investment arm of the Singapore government, said that it looks to completing its purchase of a controlling stake in Thai telecommunications empire Shin Corp. from the family of Thai Prime Minister Thaksin. Temasek made the statement despite the political unrests related to the firm. A movement to oust the Thai Prime Minister from office intensified last month after his family announced the tax-free sale of its 49.6 percent stake in the conglomerate to Temasek for $1.9 billion. Temasek said it was aware that its investments came with political risks, but that it was going ahead with the deal because it was positive about Shin's growth potential.
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
