A week in tech, August 29 - September 4

A round-up of all the latest tech news.


ò Livedoor Co says it booked a Ñ6.4 billion ($54.6 million) group net loss in the nine-month period to June 30, due to the "adverse effects" of a scandal over alleged accounting fraud that resulted in the arrest of its former president and executives in January. Livedoor says it had to book a one-off loss of Ñ12.2 billion due to the discontinuation of a range of its business plans including one for an online bank. (Livedoor withdrew a license application for the bank from the Financial Services Agency.) Its operating revenue, however, went up by 94.6% to Ñ101.7 billion because Carchs Co, a used car dealership formerly known as Livedoor Auto Co, had joined the group, allowing Livedoor to consolidate Carchs' financial results with its own. Carchs assumed its current name Aug. 1 after the scandal involving the parent company.


ò Vodafone Japan says it will charge its customers Ñ2,100 to cancel their contracts when transferring their phone numbers to different service providers. The other two major cell phone firms, NTT DoCoMo Inc and KDDI Corp. have already announced their cancellation fees, also at Ñ2,100. A new rule from October will let users keep their numbers when switching operators. In a related development, Vodafone Japan said it will change its name to Softbank Mobile Corp. The brand name will continue to be Vodafone.

Media, Entertainment and Gaming

ò MTV Networks, Viacom's music broadcasting unit, says it has agreed to acquire all the shares it does not already own in MTV Japan from private equity firm H&Q Asia-Pacific. The acquisition is MTV's second biggest outside the US, after its purchase of German broadcasting channel Viva for Ç308 million ($395 million) in 2004. Spokespeople for both sides of the transaction declined to comment on the exact value of the deal. H&Q Asia-Pacific was instrumental in bringing the MTV brand to Japan in 2001.

ò Industry sources say a Tokyo local TV broadcaster started posting its TV shows on YouTube and other web sites that offer free videos, primarily uploaded by amateurs. The move runs counter to the position of many TV broadcasters that see such sites as a threat to their business, a situation that saw many TV programmes uploaded in violation of copyrights, and broadcasters stepping up their surveillance of such violations. The Tokyo Metropolitan Television Broadcasting Corp (MXTV), however, says it intends to use the web sites to expand its viewers, sharing its programmes with people around the world. The regular broadcast range of MXTV is limited to 8.5 million households in the Tokyo area. It will post BlogTV, a 30-minute programme that introduces writers of popular blogs and discussions of topics picked up from blogs.


ò Sony Corp says it plans to release its Blu-ray high-definition DVD player in Japan sometime after October, giving Toshiba at least a six-month head start with its HD DVD player. Sony and Toshiba are seeking support from movie studios and computer companies for their high-definition DVD formats that offer better picture quality and greater recording capacity. Sony, which delayed the introduction of its PlayStation 3 game console until November because of Blu-ray, is competing with Toshiba to set the standard format for home entertainment, as it did with Betamax against Video Home System tapes during the 1980s. The Blu-ray disc can store at least five times more than the 4.7 gigabyte standard DVD and Toshiba's HD DVD can contain at least three times more content. The Blu-ray format is supported by Samsung Electronics Co, Apple Computer Inc and Dell Inc. Toshiba's main backers for HD DVD include NEC Corp, Intel Corp and Microsoft Corp.



ò Samsung demonstrated what has been described as a super-fast mobile internet platform at the Fourth-Generation (4G) Forum. The wireless technologies of Samsung promise a downlink speed of 100 Mbps (megabits per second) for users on the move and 1Gbps (gigabit per second) for those at a standstill. The throughput of 1Gbps, which enables people to download 300 music files at 2.4 seconds or a movie file in 5.6 seconds, is even faster than today's maximum landline connectivity of 100 Mbps.

Media, Entertainment and Gaming

ò Hanarotelecom announced its acquisition of a 3.7% stake in Cinema Service and is entering into a strategic alliance with the local movie producer and distributor. The country's second-biggest high-speed internet service operator says the acquisition, amounting to almost W2.6 billion ($2.7 million), is part of its effort to expand movie content for its IP TV service that was launched in mid July. Internet-protocol TV refers to packet-based, real-time broadcasting on the internet, which offers more services for end users compared to traditional video services. Under the deal, Hanaro is allowed to provide movies produced by Cinema Service to subscribers via an internet connection over the next five years. Hanaro says new subscribers to its Hana TV service have surpassed 44,000, with a daily average of 2,000 new customers. The company has signed contracts with 80 content providers, including Walt Disney Television, Sony Pictures, CJ Entertainment and National Geographic.

ò Functional game developer JoyN says it is launching an open test service of the online version of Peeper, a board game that won the 2005 Korean Game Award last year. Online Peeper is designed for people with impaired sight as well as other game users. Players can watch graphics appearing on the monitor, and people with impaired sight get assistance from the text-reading voice of the monitor. The board game is based on number analysis, requiring strategies rather than fast switches of graphics.


ò SK Telecom announced its signing of a deal to acquire a substantial stake in the entertainment company IHQ. The company says it will buy 8 million new shares of IHQ for W14.4 billion by April in a bid to boost its mobile content business. SK Telecom says the move will enable South Korea's biggest mobile phone operator to become the second-largest shareholder in the entertainment company. IHQ makes movies and television soap operas. In a separate development, it announced the launching of a mobile internet roaming service for South Korean travellers abroad. The new service allows South Korean travellersÆ access to wireless internet at airports, cafes and hotels in over 70 countries.


ò A domestic set-top box maker, Celrun, and a satellite broadcasting firm, Sky Life, announced their agreement to co-develop a conditional access system (CASs), which are used to limit access to service to authorized subscribers. Domestic set-top box makers currently use foreign brands such as NDS. Imports of CASs to the country are valued at some 300 billion won annually. The two companies plan to launch a commercial service in June next year.

ò Baidu.com Inc. announced that it is considering a domestic listing, in a bid to move to its long-term aim to acquire search engine-related companies. The company known as the "Chinese Google" said it has had informal talks with China's stock regulator, but added that such a listing was currently facing some legal obstacles. The problem is that there had not been any specific regulations, which allow the likes of Baidu to list domestically, with Baidu being a wholly foreign capital-invested company. Up to the present, no foreign firm has been allowed to list on China's stock markets. But regulators are considering allowing overseas firms to issue Chinese Depositary Receipts (CDRs), according to a document obtained by Reuters earlier this year. Baidu, which has said it plans to launch a blogging service called Baidu Space, said it had launched a beta version of the product in July.

ò Telstra Corp, disclosed its acquisition of a 51 percent stake in SouFun.com, a Chinese real-estate Internet portal, in a deal valued at $254 million. The move of Telstra, Australia's biggest telecommunications company, is seen as a bid to counter declining sales at home. The company said its Sensis search engine would manage Beijing-based SouFun. A Telstra official stated that the company is looking to SouFun to bringing in net revenues and earnings before interest, tax, depreciation and amortization estimated at A$52 million ($39.8 million) and A$18 million ($13.8 million) next year. SouFun generates revenues by online advertising for real estate and home furnishings. Under the deal, the founder of the SouFun, Vincent Mo, will retain 30.9 percent share, with IDG, a venture capital firm holding 14.7 percent.

ò According to technology research firm Ovum, the mainland will become the world's biggest broadband market next year on nationwide demand for faster internet. The report singled out China Telecom and China Netcom leading the market as the dominant providers of broadband access services in the mainland, with their combined market share of 87 percent of subscribers. Ovum forecasted that China's broadband market would grow to 139 million subscribers by 2010. As of June, there were more than 45 million broadband subscribers in the mainland following an average annual growth rate of about 79 per cent since 2003. The growth opportunity for mainland firms is seen as being huge, since the mainland's broadband penetration rate is only 3.4 percent of the population, well behind many countries in Asia-Pacific. The International Data Corp (IDC) reported that worldwide broadband subscriptions would almost double in five years, expanding from about 205 million last year to about 400 million in 2010. Broadband beat narrowband last year as the primary method online households worldwide used to connect to the internet, according to IDC.

ò ChinaÆs online advertising market is predicted to hit Rmb4.3 billion ($548 million) in 2006, according to Analysys. The research firm indicated the value of China's on-line advertising reached Rmb2 billion ($251.2 million) in the first six-months of this year. Analysys noted that the portals, sina.com, sohu.com and baidu.com, still lead the online advertising market in the country. Analysys released no details about their respective details.

Media, Entertainment and Gaming
ò Shanghai Media Group released a forecast claiming that 60,000 households in its home city will subscribe to its internet television services by year-end. The state-owned broadcasting company is offering the services in partnership with China Telecom and is the countryÆs only licensed seller of Internet protocol television (IPTV) services. At present, it has 6,000 subscribers in the city. Shanghai Media looks to increasing revenues by using Internet television to tap growing web usage in the mainland and sell pay-per-view programming such as movies from Walt Disney and Sony. China Telecom is working with Shanghai Media to help boost its broadband internet subscriptions, which have higher margins than its traditional fixed-line telephone business. China Central Television, the nation's biggest broadcaster and Guangdong Television had received government approval to test IPTV services but still had not been licensed to sell.

ò Walt Disney Internet announced that it has bought out the stake of at least one promoter of Mobile2WinÆs China operations: Contests2win, an online innovative brand advertising company. Mobile2WinÆs other investors include Softbank China Venture Capital and Siemens Mobile Acceleration. Mobile2Win is a pioneer in creating mobile marketing solutions for brands in China and India through games, contests, greeting cards, wallpapers, and ring tones.

ò TCL Communication Technology Holdings, a mainland mobile handset manufacturer, reported a second-quarter profit of HK$6 million ($771,000), compared with a HK$77 million ($9.8 million) loss in the first quarter. The mainland mobile handset manufacturer also predicted its business to break even this year. TCL Communication cut its sales forecast to 13 million units this year from 14 million it made a quarter ago, as it wants to avoid price competition with international brands such as Nokia and Motorola in the overseas markets. TCL Communication said it will continue to concentrate on the low-end market where Siemens and BenQ are major rivals, and will launch a new range of MP3 handsets to boost profitability. TCL Communication makes phones for foreign telecommunications carriers such as Vodafone, Orange and T-Mobile. The company also sells its handsets under the Alcatel brand it bought in October 2004 in Europe and North America.

ò South Korea's SK Telecom announced its agreement with the Chinese government to cooperate in developing 3G mobile technologies. Under the deal, the countryÆs National Development and Reform Commission (NDRC) would help the South Korean company strengthen its foothold in China's fast-growing wireless telephone market. SK Telecom said it would establish a joint research center in China to develop a 3G mobile telecom standard promoted by China called time division-synchronous code division multiple access (TD-SCDMA). China hopes to launch the TD-SCDMA service before the 2008 Olympics in Beijing and SK Telecom plans to build an experimental TD-SCDMA station in Korea next year. Both sides agreed to build a co-operative model of joint development "for not only TD-SCDMA technology but also beyond 3G technology and 4G.

ò Shares of Semiconductor Manufacturing International Corp (SMIC), China's biggest microchip maker, registered a decline after Taiwan Semiconductor Manufacturing Co (TSMC) announced its move to sue the mainland company. The suit alleges that SMIC had broken an agreement on intellectual property even as the mainland-based firm expressed its disappointment over the Taiwan-based companyÆs decision to file the complaint. In January last year, TSMC and SMIC entered into a patent cross-license agreement under which each party agreed to license the other party's patent portfolio until December 2010. SMIC also agreed to pay TSMC an aggregate of $175 million in installments of US$30 million for each of the first five years and $25 million in the sixth year. The latest suit, which was filed in the US, states that SMIC did not comply with that agreement which settled an earlier suit by the Taiwanese chipmaker, which claimed SMIC violated patents and trade secrets. According to IC Insights, TSMC holds a global market share of about 50 percent while SMIC has 7 percent.

ò China Telecom Corp, the largest fixed-line operator in mainland China, posted a fall in its interim profits as it reports a net income of Rmb14.1 billion ($1.7 billion), down 4.2 percent from Rmb14.7 billion ($1.8 billion) in the year ago period. The company ascribed the decline to competition from the mobile sector. China Telecom also warned that it would not provide an interim dividend, due to the companyÆs needs for sustainable business development, its cashflow position, and the need to maintain flexibility in funding. It said it would review the final dividend proposal at the time of reviewing the full year results. In another development, leading Indian cellular operator Reliance Infocomm and China Telecom announced they have signed a deal to provide the first direct telecom connection between the two Asian countries. Telephone calls between China and India, which have been contentious neighbors in the past, are currently routed through the US and Europe. Reliance Infocomm has some 15.5 million subscribers. With the alliance, it will now route calls through the under-sea cable lines operated by Flag Telecom, a UK-based wholly-owned unit it purchased in 2003.

Hong Kong

ò SmarTone Vodafone, the mobile arm of Sun Hung Kai Properties, reported a decline in its net profit to HK$70 million ($8.9 million) from a restated HK$326.9 million (US$42 million). The company ascribed the decline to higher cost of handset subsidies and network start-up costs. The company also took a HK$58 million ($7.4 million) accounting charge related to its 3G license cost. SmarTone said its revenue went up by 14 percent to HK$3.7 billion from HK$3.6 billion. SmarTone registered 1 million total customers at the end of June, of which 160,000 are 3G service subscribers. The company plans capital expenditure of up to HK$500 million ($64.2 million) this year. It reportedly spent HK$359 million ($46.1 million) a year ago.


ò VSNL Singapore, the international arm of Indian carrier VSNL, said it plans to build a new high-capacity submarine cable system linking Singapore, Hong Kong, and Japan. The firm said the new intra-Asia cable will enable VSNL International to better serve its global customers doing business in and with the burgeoning Asia-Pacific markets. This investment follows the recent announcement by VSNL to build a new system from India to Europe that will provide connectivity to the Gulf region and the African continent. The intra-Asia cable, when combined with the Tata Indicom Cable System and the TGN-Pacific cable system, will complete VSNL International's multi-Terabit capability from India to Asia and onward to the US, the carrier said. VSNL International will commence construction of the new intra-Asia cable by December. The company is already in the process of finalizing design details, selecting suppliers and identifying additional partners for the project. Future potential landing stations for the cable include locations in China, Taiwan, the Philippines, Vietnam, Malaysia, and Guam.

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