A week in tech, June 26-July 2

A roundup of the latest technology news.

KVH Co, a telecommunications services provider owned by US investment firm Fidelity, will construct a large data centre in the Japanese city of Inzai, in Chiba Prefecture, at an estimated cost of Ñ20 billion-Ñ40 billion ($185.8 million-$371.5 million). KVH intends to tap demand among businesses looking to outsource information technology operations. The company acquired a plot of land from the government-affiliated Urban Renaissance Agency in Chiba New Town, which is home to data centres for many financial institutions. The six-story data centre will cover half the lot, and will be expanded as demand grows. Expected to come on stream in spring 2010, the facility will initially have a floor space of 30,000 square metres.

KDDI R&D Laboratories has developed a system for delivering free viewpoint video over the Internet. The research arm of KDDI plans to use the system for a trial service on its Website this year and within five years hopes to integrate the system with the delivery of on-demand television programming over the Internet. In free viewpoint video, the viewer can choose to watch events play out from any angle. This is accomplished by filming the action from multiple angles using multiple cameras and then synthesizing the image data to generate a digital 3-D view. The new KDDI system uses data-compression technologies and selective processing of image data to create a 300mbps data stream, which is small enough for delivery to household Internet terminals.

KDDI is teaming up with Nippon Express to enter the telegram market in a bid to break the grip held by NTT Corp. KDDI was to start offering a telegram service on July 1, setting up nine delivery centres nationwide, with the goal of grabbing a 20% market share in three years. The telegram market is estimated at about Ñ60 billion ($557 million), down about 40% from the peak in fiscal 1996. But the market size has remained unchanged in recent years due to strong demand for telegram messages of congratulation or condolence on such occasions as wedding parties and funerals. By tapping Nippon Express' existing delivery network, KDDI plans to offer services that are 20% cheaper than NTT's.

Matsushita Electric Industrial plans to market ultra-small business-use personal computers globally by the end of the year, starting out with a product for nurses and then offering a ruggedized model for use at factories and construction sites. These PCs are to have screen sizes of 12.1 inches or smaller, with each model having functions targeting at specific fields. The manufacturer behind the Panasonic brand plans to release the medical-use model simultaneously in Japan, the US and Europe. This machine will have a touch panel instead of a keyboard, allowing for nurses in hospitals and those making house calls to input such data as blood pressure and treatments quickly and with one hand.

Sony CorpÆs shares fell the most in more than two months in Tokyo trading after the company's mid-term plan didn't include products to beat the competition. The company plans to invest Ñ1.8 trillion ($16.8 billion), increase the number of businesses that generate at least Ñ1 trillion in annual sales and connect 90% of Sony's electronic products to the internet by March 31, 2011. The company also pledged to generate a 10% return on equity, or profit divided by book value, by the year ending March 2011. That's almost double its 5.8% percent ROE average in the past five years.

NTT Corp, Sony Corp and others said that they will unify the technical standards for Internet Protocol television (IPTV) services. The standardisation process will be led by a forum established by three major telecommunications services firms: NTT, KDDI Corp and Softbank Corp. The forum has since been joined by a total of 15 businesses and organisations, as well as two individuals. Its members now include Sony, Matsushita Electric Industrial, Toshiba Corp, Sharp Corp and Hitachi, as well as the five major commercial TV broadcasters in Tokyo and Japan Broadcasting Corp. The forum is to draw up unified standards by the end of August and urge Japanese IPTV service providers and consumer electronics makers to develop compatible technologies and equipment.


South Korea has banned Hanarotelecom from adding new customers to its broadband service for 40 days after the company disclosed customer information to telemarketing firms. Some former and current executives at Hanarotelecom have been questioned by police in relation to the disclosure of data on about 6 million customers to telemarketing firms in 2006 and
2007. The Korea Communications Commission also fined Hanarotelecom W148 million ($143,100) for registering its customers as members of the company's portal service without permission.

SK Telecom has signed a memorandum of understanding (MoU) with Shanghai Media Group (SMG) on the import and export of television programs. SK Telecom said that TV programs made by SMG will be exported to South Korea through its sales channels, while the company's own media resources will be exported to China via SMG. The two parties also agreed to cooperate on mobile TV, IPTV (internet protocol television) and interactive media technology and SMG's new media unit signed a cooperative agreement with SK Telecom's China unit, Via-SK Network, on wireless value-added services.

SK Telecom said it has secured rights to publish two online games produced by Sega Corp. as part of its plan to expand its business into the gaming industry. The South Korean company said it had recently signed a deal with Sega Publishing Korea, the local unit of the Japanese game maker, to release ôSangokushi Taisen Onlineö and ôLet's Make a Pro Baseball Team Onlineö. SK Telecom is in the process of localising the games and plans to begin services near the end of the year after creating a new game portal to be run by its gaming subsidiary. The company is also in talks with Sega to secure rights for additional games, such as "Splash Golf" and "Let's Make a Pro Football Team Online."

SK Telecom has signed an agreement with China Shanghai Media Group to cooperate on new media services. Under the terms of the memorandum of understanding, the two companies plan to partner on services including mobile TV and IPTV. SMG is one of China s major media outfits, with 13 television channels and a host of radio stations. In April, the company received a US$12 million investment from Intel to develop its internet TV service

Samsung Electronics will build its second liquid crystal display (LCD) plant in China after it succeeded in producing 82-inch LCD at the Tianjin Display Plant. Samsung is selecting a place for the construction of the project with scheduled investment of US$500 million. The first batch of 82-inch LCD is expected to service airports and bourses. To meet the increasing market demand, Samsung has released a package of 40-inch, 46-inch, 57-inch, 70-inch and 82-inch LCD in succession.

Samsung Electronics accounted for 31% of all television units, including liquid-crystal display (LCD) and cathode-ray tube (CRT) types, sold in the European market in the first quarter of 2008. Samsung's domestic rival LG Electronics ranked second and Royal Philips Electronics of the Netherlands ranked third, with market shares of 13.4% and 12.7%, respectively, DisplaySearch said, adding that television sales in Europe accounted for 21.5% of all television units sold in the world.


MozillaÆs web browser Firefox has captured a 2%-3% share of China's browser market, up from 1% when Firefox was officially launched in China a year ago. Meanwhile, FirefoxÆs user numbers have doubled from a year earlier, indicating that the rollout of Firefox 3.0 has helped fuel the browser's expansion in China. Having teamed up with internet giants like Baidu.com, and Google, the company is expecting more partners in the near future in a bid to increase its market share further. Firefox 3.0 recorded over 8 million downloads in 24 hours around the world after it was released on June 18, 2008.

Sohu.com will sharpen its focus on internet-based advertising even as it continues to expand its online, multiplayer gaming service. Sohu is seeking growth from its participation in the Olympic Games and from overseas expansion. The companyÆs CEO expects online advertising to grow 45% this year because of huge interest in the Olympic Games, but warns that growth will slow by 20% to 30% next year after the event.

Prosten Technology Holdings, a wireless mobile search provider, saw its user numbers leap to around 120 million as of March 31, 2008, from 10 million in 2006 when it started provide wireless music search services for China Mobile subscribers. Prosten is expected to have 150 million-160 million users at the end of this year. The company hopes to establish a long-term collaboration with China Mobile, which signed a three-year contract with Prosten in 2007. The company, which is currently listed on Hong KongÆs growth enterprise market intends to list on the main board within two years.

The number of China Mobile subscribers increased by 7.491 million in May to reach an all-time high of 407 million. In contrast, China's leading fixed-line operator, China Telecom, suffered a net subscriber loss of 820,000 in May, making it the 10th consecutive month with a net subscriber loss. By the end of May, China Telecom's total subscribers stood at 215 million.

China Mobile last month commenced the construction of 1,500 3G base stations for the TD-SCDMA standard in Shanghai. The company will expand its 3G network coverage, apply wireless broadband technologies such as Wi-Fi and HSDPA, and construct more than 3,000 3G bases in Shanghai by the end of 2008 in a bid to make it wireless city. Meanwhile, its branches in Shanghai, Jiangsu and Zhejiang are going to launch a SIM card with double numbers, which will enable customers to use two telephone numbers in one mobile phone.

About 240 employees at China UnicomÆs headquarters, accounting for 29.3% of the total, will move to China Telecom amid the restructuring of the country's telecom industry, persons in the know disclosed on June 23. The concerned staff members work primarily within departments for CDMA network operation, value-added services, plan construction, network construction, technologies and maintenance.

Datang Mobile Communications Equipment is seeking to team up with Taiwan's MediaTek to expand its presence in the mainland market for TD-SCDMA handset chips. Datang Mobile is considering inviting MediaTek to invest in an affiliate of the Datang group. The newly established affiliate is meant to focus on the development of TD-SCDMA chips for handsets, the newspaper said. TD-SCDMA is a 3G mobile telecommunications standard being pursued in China by Datang, the Chinese Academy of Telecommunications Technology (CATT) and Siemens.

Huawei Technologies expects to sell 70 million units of terminal products this year. According to the company, the units will include mobile broadband equipment, handsets, routers, wireless gateways and ADSL, with a total value of about $4.1 billion. Huawei sold 40 million units of telecommunication terminal products last year, realising a total income of $2.6 billion, which accounted for 16% of its overall income. Huawei sold more than 30 million units of terminal equipment in the first five months of this year, of which 3G data cards accounted for more than 12 million units.

China has ordered the country's phone and internet companies to stop signing up customers in August to focus on providing services during the Olympic Games. The moratorium is part of a series of curbs by the government that also include traffic restrictions and the shut-down of factories during the Beijing Olympics, which begin on August 8. An unidentified spokesman for the telecom industry regulator in Beijing said the restrictions will affect operations in the capital and other cities hosting Olympic events. China Mobile has been told to stop any physical changes to its network after July 20. China Netcom Group Corp will avoid installing equipment from August 1 to August 25, the Associated Press cited an unidentified spokeswoman at the phone and Internet service provider as saying.

Intel Corp has signed a memorandum with the Ministry of Science and Technology of China to set up a Mobile Computing Technique Research Centre. The centre, jointly set up by the Intel Research Centre and Tsinghua University, will focus on the related researches of the whole framework of mobile computing, including the research on new generation end-to-end mobile computing framework, the research on new server, which is used in the mobile distributed computing, and the research on the new application software and operation mode. The centre involves large sum of investment, the top US chipmaker said, but declined to reveal any details.

Semiconductor Manufacturing International Corp (SMIC) plans to sell a stake in the company in less than six months at a much better price than the stock's market value. The chipmaker's financial adviser valued the company at a price range that the potential buyer regards as reasonable. The company has narrowed its search to a single Chinese investor. SMIC, which has shareholders' approval to sell up to a 20% percent stake, will use proceeds from a sale to pay off debt. After posting four quarters of losses, SMIC is abandoning the unprofitable computer-memory chip business to compete against Taiwan Semiconductor Manufacturing Co in producing customised chips for game consoles and mobile phones.


Chunghwa Telecom is planning a NT$20 billion ($658 million) reduction in its share capital this year, returning NT$1.70 to shareholders for every share held. The planned capital reduction will be sourced from its capital reserves that currently stand at around NT$200 billion ($7 billion), a report said. The island's biggest telecom operator plans to cut its share capital by another NT$60 billion-NT$100 billion in the next five years.

NEC recently opened a laboratory in Taiwan to develop WiMAX systems and test the interoperability between different WiMAX systems. The firm will invest NT$20 million ($666,000) into the facility and staff the laboratory with five to six specialists initially. More money would be spent and staff size would be increased to 20 to 40 upon achieving bigger operating scale. The laboratory will initially offer tests of interoperability between end-user WiMAX equipment supplied by Taiwanese manufacturers and NECÆs Paso Wings office-end systems. In the future, the laboratory will double as a systems development centre.

Taiwan is planning to lift in three stages a ban on local LCD makers producing panels in the mainland, permitting older sixth-generation LCD plants in China within four years. The Commercial Times said Taiwan's economics ministry would lift a rule that prohibits local display makers from making seven-inch panels in the mainland as a first step, and then allow them to open 5.5-generation manufacturing factories there. The ministry plans to allow display makers to open sixth-generation factories in China within four years, but only after Taiwan plants using advanced 8th-generation or higher technology have seen steady mass production for six months, the newspaper said, without quoting sources.

Hon Hai Precision Industry is planning to move three production lines for electronic components back to Taiwan, from China. The Taiwanese electronics producer has apparently been influenced by the appreciating renminbi and the increasing labour cost in the mainland. Hon Hai Precision is also working to enhance automation and management of its production lines. Hon Hai Precision's products cover both Taiwan and overseas markets, including Asia, Europe and the US.

Powerchip Semiconductor said its board has approved a plan to raise up to NT$3 billion ($99 million) through a private equity placement to boost working capital. Powerchip would raise the funds by issuing a domestic corporate bond, with a maturity of three years. Proceeds will be used to strengthen its financial structure and boost its working capital. Powerchip and other makers of dynamic random access memory (DRAM) chips, used primarily for PCs, are struggling in the battered computer memory chip market, but some analysts expect the sector to recover in the second half of the year.
Hong Kong

ò Hutchison Telecom Hong Kong expects mobile data services to be the new front in the battle for subscribers, and is turning up the heat on competitors with the sale of Apple's iPhone 3G from next month. The city's biggest 3G mobile telephone operator will launch the iPhone on July 11. Although it has yet to disclose details, the company has launched a marketing campaign promoting services offered, such as mobile television. Market watchers said the iPhone 3G could absorb the company's high-spending customer base, compared with rivals such as CSL New World Mobility, SmarTone-Vodafone and PCCW Mobile. The new Mobile 3.0 marketing campaign was aimed at boosting usage of mobile data services. Updated mobile network services and devices are now ready for the mass market, which could help boost non-voice revenue growth.

ò Credit Suisse sees a number of challenges for the iPhone launch on July 11 in HK, including competing services and devices, more expensive data packages to offset the heavy handset subsidies, and competitors becoming more aggressive with their own handset subsidies and tariffs discounts. The house does not expect the launch to significantly boost earnings for 3 Hong Kong as the number of handsets could be small.

ò Tencent Holdings signed a deal to acquire up to 50 percent stake in MIH India Global Internet Ltd over the next three years, according to the company. Tencent will invest about 52.1 million yuan (US$7.5 million) in the planned acquisition. Tencent, 35.24 percent owned by its controlling shareholder MIH China (BVI) Ltd, is engaged in boosting its business in China which is Tencent's key market. The company is also attaching lots of importance to its overseas business, as an effort to enhance its presence in the potential markets, sources said. Tencent's instant message service QQ owns approximately 597.9 million registered users and 253.7 million active instant messaging accounts at present. MIH India Global Internet is the wholly-owned subsidiary of Nasper Ltd. which is also the controlling shareholder of MIH China.


ò India's Department of Telecommunications (DoT) has acknowledged the failure of its broadband policy and is seeking industry inputs to rescript the sector's growth path. Broadband and internet is one of the worst performing sectors under the DoT, contrasting sharply with the tremendous success achieved in mobile telephony which is clocking a near 8 million to 10 million subscribers every month. The policy collapse is illustrated by the fact that at the end of 2007 India barely reached 10.36 million internet subscribers against the target of 18 million, while broadband penetration touched 3.13 million against the target of 9 million subscribers. The DoT held a meeting with Reliance, Tatas, Bharti, AT&T and Sify to discuss the policy challenges preventing the growth of broadband in India. Mobile phone industry associations COAI and AUSPI were also present.

ò India's DoT is understood to have finalized the guidelines for allocation and pricing of 3G spectrum as per which anyone who fulfils standard UASL telecom license criteria will be able to participate in the auction. Successful bidders who are not UASL licensees would be given a separate UAS license for the service area to provide only 3G services. A separate entry fee shall be payable for grant of UAS license for 3G service besides the 3G spectrum auction prices. This shall be equal to the entry fee of the UAS license of 2005. The guidelines pave the way for foreign players for their participation in the 3G auction.

ò AIS reported that its net new users in the second quarter of 2008 will be lower month-on-month and year-on-year, but expect higher profits for the period. The outlook for the Thai telecom sector has improved this year on hopes that a pick-up in consumer confidence should boost mobile usage earnings and price competition will be less aggressive than in previous years. AIS, valued at US$8.6 billion, has about 50 percent of the domestic mobile market and raised its tariffs in the first quarter. AIS had 25.1 million subscribers at the end of March, up 19.5 percent from a year earlier. It added a net 982,000 new subscribers in the quarter, up from 901,000 in the previous quarter. That compared to 884,000 net additions at rival DTAC.

ò Six Indonesian telecommunications companies have been found guilty of price fixing and Singapore's information and communications industry saw profits soar. Indonesia' competition watchdog found six mobile phone providers guilty of price fixing, which may have cost consumers more than $300 million in additional rates. The Business Competition Supervisory Commission says the companies formed a cartel to keep tariffs for text messaging artificially high. The companies include Telkomsel, Telkom and Smart Telecom. They were given fines totaling more than eight million dollars.

ò Smart Communications said the low income segment of the country's population helps boost its profitability. This year the company was recognized as the country's mobile operator of the year for the second time, having first received the award during the Asian Mobile News Awards 2005. The company attributed the Philippines' success in promoting the usage of mobile phones to the introduction of various innovations in cellular technologies and business models. Prepaid services were further enhanced when Smart introduced micro-tops through electronic loads or Smart Load in 2003. The sachet size of airtime tops in Smart Load now as low as 10 pesos per load has made mobile phone services affordable for many more low-income subscribers.

ò Idea Cellular Ltd. offered 32.4 billion rupees (US$757 million) for control of Spice Communications Ltd. to increase subscribers by a sixth. Idea, owned by billionaire Chairman Kumar Mangalam Birla, agreed to buy a 41 percent stake from Spice Group for 77.3 rupees (US$2) a share and make an open offer for a further 20 percent at a price that's 41 percent higher than Spice's close yesterday. Idea, whose chairman also runs cement and aluminum operations, will sell a 15 percent stake to Malaysia's TM International Bhd. after the takeover. TM owns 39 percent of Spice. Idea will add about 4.5 million customers, closing in on Bharat Sanchar Nigam Ltd., India's fourth-largest carrier. India is projected by the telecom ministry to double its mobile-phone subscribers to 500 million in two years, after having surpassed the U.S. as the second-biggest market this year.

ò TM International will pick up around a fifth of Indian mobile operator Idea Cellular strengthening its presence in the world mobile market, after the 40.8 percent stake takeover of Spice Telecom for 21.8 billion rupees (US$508 million). TM International's 39.2 percent stake in Spice will be converted into Idea shares, and it will pay 72.9 billion rupees (US$1.7 billion) for a preferential allotment of 14.99 percent. TM International is a unit of Telekom Malaysia.

ò Malaysian palm oil company, Sime Darby will not invest in an undersea cable project to carry electricity from Sarawak on Borneo to peninsular Malaysia, saying it did not fit with its business strategy. The Malaysian government offered Sime Darby the chance to take up a 60 percent stake in Sarawak Hidro Sdn Bhd, the owner of the dam project last November. The government also offered Sime the opportunity to own a 60 percent stake in the company building the cable. The cable project is one of the biggest on the federal government's drawing board.

ò Qatar Telecom has completed its acquisition of Indonesia Communications Limited (ICLM) and Indonesia Communications Pte. Ltd. (ICLS), which hold a combined 40.8 percent, interest in PT Indosat Tbk. Pursuant to the previously announced share purchase agreement with STT Communications Ltd, legal ownership of the shares of ICLM and ICLS was transferred from Asia Mobile Holdings to Qtel upon the closing of the acquisition. Based on Qtels interpretation of IndonesiaÆs mandatory tender offer rules, Qtel believes that it may be required to commence a tender offer to acquire the outstanding shares of Indosat (including the shares represented by American Depositary Shares) that are not owned by Qtel.

ò Samsung Electronics and Germany's Siltronic have opened a US$1 billion joint venture 300 mm silicon wafers plant in Singapore, named Siltronic Samsung Wafer. The 300mm wafers are currently the most advanced and largest diameter silicon wafers in commercial mass production. The plant aims to reach a monthly capacity of 300,000 wafers by 2010. The plant, Samsung's first wafer production site outside South Korea, will supply the company's internal needs as well as customers in the U.S., Japan, and Europe.

ò Samsung Electronics is in talks about building a manufacturing plant in the Philippines. Officials of the Clark Development Corp (CDC), which oversees an industrial zone in a former U.S. military base north of Manila, have been in talks with Samsung for some time. CDC president Liberato Laus and other top officials are currently in Korea for further talks with Samsung. Electronics, largely assembled from imported parts, account for over 50 percent of export revenues in the Philippines, which wants to expand its role as a hub for electronics firms seeking low-cost manufacturing bases.

Media, Entertainment and Gaming
ò India's Reliance Entertainment and other investors are in talks with Hollywood's DreamWorks SKG to raise up to US$2 billion to create a movie venture. DreamWorks is looking to raise a total of US$2 billion from investors, US$1 billion in equity and another US$1 billion for new movie projects, according to The Associated Press. Reliance Entertainment plans to invest more than US$500 million in equity.
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