Internet
ò Expedia, the No. 1 U.S. online travel agency, launched a Japanese version of its popular travel site, marking the first attempt at a branded site in Asia by one of the top four U.S. travel agencies. According to PhoCusWright, a travel research company, the number of online travel bookings registered a growth of 31 percent in 2005 and 28 percent in 2006 in the Asia-Pacific region. The study said bookings are forecast to rise by 25 percent in 2007 and 2008. The figures do not include corporate bookings. At present, only about 10 percent of travel is booked online in Japan, compared to the U.S. where almost 50 percent of travel is booked online. Expedia counts among its rivals in the market Priceline, Sabre Holdings, Travelocity, and Orbitz. Some of these companies have achieved a presence in the Asia Pacific region by means of mergers and acquisitions. Travelocity owns the Zuji travel site, which manages its Asia-Pacific interests. Orbitz Worldwide's business in Asia-Pacific is Flairview Travel. Priceline owns 15 percent of an Internet business that offers travel services in Singapore, Hong Kong and Taiwan. Expedia also owns the eLong travel site in China.
ò Softbank announced that it has closed one of the world's biggest whole-business securitizations on record, by way of a US$12.4 billion refinancing of the purchase of Vodafone Japan's mobile business. The company, however, said that interest payments on the ground-breaking deal would cut Softbank's pre-tax profit by 15.9 billion this fiscal year. The extra interest costs are ascribed to the two-month delay completing the deal, during which long-term interest rates have risen. The company did not disclose the rates it had agreed with the financing banks. There are signs, however, that the financing was not that smooth given SoftbankÆs admission earlier that Goldman Sachs, an investment bank with close ties to the company, had quit the syndicate of banks involved in the deal. No comments were sourced from Goldman Sachs even as some analysts believe that the deal could enhance the global interest in whole-business securitizations. Lovels, the law firm advising Softbank, stated that the model might be applicable to JapanÆs entertainment industry, including pachinko gambling parlors, love hotels and amusement parks, since they these are characterized by a steady stream of income.
ò According to figures published by the Recording Industry Association of Japan (RIAJ), legal downloads of music in Japan continued to register growth in the third quarter of the year even as growth appeared to be slowing down. The study shows that the total number of downloads was 91.9 million during the July to September quarter, which is 23 percent higher than the same period last year but only 2 percent above the second quarter of this year. Music obtained by mobile phones, which includes full tracks, ringtones and ringback tones, still dominates the Japanese market and account for the vast majority of downloads. The number of downloads from Internet sites, like iTunes and the Sony-affiliated Mora site, totaled 5.7 million during the quarter, which represents an increase on the same period last year but a decline from this year's second quarter. For the first time the RIAJ categorized the Internet download figures by type of download. Of the 5.7 million downloads in the third quarter about 5.4 million downloads were of singles. There were 260,000 downloads of albums and 86,000 downloads of other paid content, which were mainly music videos.
Mobile/Wireless
ò NTT DoCoMo, Fuji Television Network, Nippon Broadcasting System and other firms announced entering into an alliance to develop broadcast services for mobile telephones. The alliance is said to form a 30 million yen (US$260,000) joint venture to develop multimedia services. The partnership will include satellite broadcaster Sky Perfect Communications and trading house Itochu Corp. Under the agreement, the companies said they will promote a digital broadcast standard for mobile television and call on regulators to reallocate frequency bands to such services when the bandwidth now used for analogue television will be freed up by 2011. Earlier in April, free digital broadcasts for mobile telephones, called One Sag, began in Japan. The service, however, is limited to simultaneous broadcasts of regular television programs. Local regulators disclosed that they may allow distribution of content made specifically for mobile telephones from 2008.
ò Industry sources said that Nippon Telegraph and Telephone Corp. (NTT) are set to reduce charges on calls from fixed-line to mobile phones by about 10 percent in January. It is expected that the new rates will come out among the lowest in the industry; a situation that analysts say might push rivals such as KDDI Corp. and Softbank Corp. to make similar cuts. NTT East Corp., one of the company's two regional units, is reportedly aiming to slash rates on calls from fixed-line phones to NTT DoCoMo Inc. and KDDI's au brand cell phones. The lower rates are seen as bringing down revenues for NTT by a combined 4 billion yen (US$34.6 million) or so each year, in situations where call volumes remain the same.
ò Market sources said that Japanese investors have released some US$8 million into cutting-edge technology, which is being developed by GeoVector in New Zealand, which lets people point their phones to see where they are and search around for information about shops, restaurants and sights. A GeoVector official, however, said that people from New Zealand may be among the last to experience the fruits of the company's work, saying Telecom and Vodafone have lost some of their desire to be at the forefront of innovation. Its first service, a trial developed in conjunction with Japan's second-largest mobile network operator, KDDI, and Japanese mapping company Mapion, enables KDDI subscribers to search for and call up information on 700,000 shops, eateries and other points of interest. Though it has not been actively promoted, it has been downloaded by 2500 KDDI customers. GeoVector said it will soon launch its first commercial application in partnership with NEC, which will let mobile network operators bill subscribers about US$3 a month for the Mapion service and charge advertisers for displaying sponsored links and banner ads on search results.
Media, Entertainment and Gaming
ò Namco Bandai Holdings Inc., Japan's second-biggest maker of video-game software, said it must sell at least half a million copies a game based on Sony Corp.'s PlayStation 3 console to make money on its titles. The company said graphics for the high-definition games cost about 1 billion yen (US$8.6 million) to create, more than double that for Nintendo Co.'s Wii titles. Analysts also said that shortages of the PlayStation 3 may also make it more difficult for software makers to sell enough games. Sony halved shipment targets for the console this year and delayed the European release amid a scarcity for some parts, making it possible that the company may have missed its goal of shipping 400,000 consoles in the U.S. earlier this month. Namco Bandai said it looks to games for the consoles introduced this month by Sony and Nintendo and a year ago by Microsoft Corp. to account for 10 percent of software sales, or 3.1 million units, this fiscal year ending March 31.
Ventures/Investments
ò The TBS and online shopping giant Rakuten have decided once more to put off tie-up talks for a month, marking the seventh delay following an agreement the two companies entered into at the behest of Mizuho Corporate Bank. A hindrance at the moment is RakutenÆs holding of a 19 percent stake in TBS, which TBS insists Rakuten sell before talks are initiated. Rakuten is reportedly not giving up what analysts agree to be a strong bargaining chip. Rakuten bought its TBS shares for 110 billion yen (US$948 million). If it were to sell them now, it would amount to a loss of nearly US$56 million. Following the earlier agreement to discuss linkages with Rakuten in the field of broadband business, TBS has entered into partnerships with other partners, including the Mitsui & Co. trading house, the Dentsu ad agency and electronics retailer Bic Camera to expand its web-based activities. As part of its agreement with TBS in November this year, Rakuten put nearly half its TBS shares in a trust account with Mizuho. This account is due to expire in March. Industry observers note that when the term is up, the possibility of talks may also disappear. Other facts show that, since the beginning of the year, RakutenÆs own share price has declined by two-thirds, thus diminishing its clout in its dealing with TBS.
ò Kadokawa Group, composed of a group of companies engaged mainly in publishing or movies/visual content, and NTT DoCoMo, announced they will form a comprehensive alliance through a capital tie-up. Under the agreement, DoCoMo will acquire 1,031,000 shares in the holding company, or 3.7 percent of total issued shares, for about 4 billion yen (US$34.6 million) through a third-party share allocation. Under the agreement, DoCoMo will also link up with the group companies Kadokawa Shoten Publishing Co., Ltd., Kadokawa Herald Pictures, Inc., Kadokawa Mobile, Inc., Herald Enterprise, Inc. and Kadokawa Media House Inc. The alliance is seen as fusing together Kadokawa's strengths as a major provider of printed and visual content with DoCoMo's huge subscriber base and i-mode mobile Internet service. The parties will develop mobile content related with Kadokawa movies and animation, including original video content developed initially for the mobile environment, prior to release via other media. The parties will also consider possibilities for DoCoMo to join the film-producing project, which Kadokawa manages.
Korea
Internet
ò Shotech, a South Korean developer of online marketing solutions, announced the commercial launching of the English-language services of Hooopy, a platform that enables users to transmit video clips or digital music files in real time to whoever agrees to receive them in advance. An official of the venture start-up said that with this offering, Internet users can become broadcasters with this personalized web communication services. Under the offering, people have to subscribe to the Hooopy site before creating channels, but potential audiences can select any channel without signing-up. Should registered audiences not want to watch the delivered files or hope to check them later, they may reject the data transmission or save the delivered files. It also takes just one click to cancel subscriptions to any channel on a pop-up window, which appears when delivering video clips or other files. A Shotech official projected the Hooopy services will boost audio-visual files generated by ordinary citizens, dubbed user-created content (UCC). The company said it will unveil other versions of Hooopy next year in Korean, Japanese and Spanish after confirming its viability through the English-language product. Shotech is known for its flagship service Mylinker, which boasts of more than 10 million clients. Mylinker is a marketing tool, which allows media outlets, government agencies and online shopping sites to channel various types of data to end-users.
ò Industry analysts are saying that companies are skillfully tapping the popularity of Internet video sharing services, planting advertising spots in the free-of-charge videos created by users. LG Electronics has featured its MP3 player on a series of yoga video clips. Interpark, a major online shopping mall, produced video guidebooks for shoppers and posted them on several web sites. Known as product placement (PPL), it is a long-standing marketing tactic used by marketers to use a real commercial product in media such as movies, TV, soap operas and music videos. Usually, PPL occurs under the premise that it will be featured as a natural part of the work. Most recently, computer and video games have joined in the field of PPL. The Internet is also being experimented with, using in-site product placement as a revenue model. Video-sharing web sites have become highly popular globally over the past two years. Often called video UCC (user-created contents), those sites, such as Tag Story, Pandora TV and Gom TV in Korea and YouTube in the U.S., allow users to upload a few minutes of video clips on a server and show them to anonymous users without charging them. All the big portals such as Naver, Daum and Empas also participate in this business.
ò Skype announced that it will commercially launch Skype-In services, or phone-to-web applications, in collaboration with the country's top online auctioneer, Auction. The service will allow South Korean subscribers of Skype to receive incoming calls from traditional phones or mobile handsets to their personal computers. Under the offering, those who want to use Skype-In are required to sign up at Skype's Korean-language web site free of charge. The offering requires a fee of 13,200 won (US$14) for three-month services or 39,600 won (US$43) for a yearlong membership. With the introduction of Skype-In, the company's service line-up is complete, with services for PC-to-PC calls and PC-to-phone calls, called Skype-Out, which is already available. Earlier last year, Skype was acquired by eBay, the world's leading online retailer, which retains more than a 99 percent stake in Auction.
Mobile/Wireless
ò South KoreaÆs industry officials said the number of mobile phone subscribers in Korea topped 40 million at the end of last week, which means that 82 out of every 100 Koreans now have a mobile phone connection. The development came nearly two decades after analog cellular services were first introduced into the market. According to SK Telecom Co., KTF and LG Telecom, their combined wireless phone subscription base climbed to 40 million, with firms posting an average of 6,000 new subscribers each day. The latest figures put the country's mobile penetration rate at 82.3 percent. In some 30 countries, including many in Europe such as Ireland, Sweden, the United Kingdom and Italy, are now known to have a penetration rate of over 100 percent while many other developed countries have stabilized at around 80-85 percent. In Korea, SK Telecom Co. remains the country's largest wireless carrier with over 20.1 million subscribers and a 50.5 percent share of the market. No.2 KTF has 12.8 million subscribers and 32.1 percent of the market, followed by LG Telecom with 6.9 million users and a 17.4 percent market share. Analysts ascribe to the introduction of CDMA the rapid expansion of the mobile phone users. The number of subscribers surpassed the 10 million mark in June 1998, from 2.8 million in 1996. This then doubled to 20 million in August 1999 and hit 30 million in March 2003.
Media, Entertainment and Gaming
ò SK Telecom Co., the countryÆs largest wireless operator, announced that it would soon unveil 30 kinds of mobile network games including three-dimensional battles, first-person shooters, strategic simulations and one-button games. Company officials described these games as the mobile-phone version of MMORPGs. The company said that most of these games will be launched in the market by year-end. A brand new game title called Lord of D will also be available early next year. Lord of D is a role-playing network game in which multi-users complete various missions and tasks. The operator said it has already initiated the open beta testing of three games. One of these games, ôYou Are Commanderö will undergo beta testing for two weeks and will be launched in mid December. The operator also disclosed that users who want to experience the games can log on to SK Telecom`s Nate service via mobile phones, enter the game zone and open-beta menu. Fees for wireless data and access will be offered for free during the beta period. SK TelecomÆs announcement came after its smaller rival KTF Co. unveiled the countryÆs first mobile MMORPG called IMO, the World of Magic in June this year. IMO, developed by Com2us local mobile game developer has attracted wide interest from domestic wireless subscribers, with the number of IMO users simultaneously logged reaching 1,000 at a maximum.
ò Industry observers note that cable TV has started airing dramas, an area long considered a terrestrial broadcaster-dominated realm. In this market, premium movie channel OCN is seen emerging as the leader. Not long after Freeze, a four-episode series depicting the love of a human and a vampire was aired last month. OCN launched another made-for-cable series, a full-length miniseries composed of 16 episodes titled ôSomedayö, which was launched earlier this month. An OCN official ascribed the rise of popular series to the growing number of households with access to cable TV as the reason the venture was possible. According to OCN in-house studies, 1.6 billion television viewers subscribe to cable TV. Yellow Films, an outsourcing production company that provided Seoul Broadcasting Company (SBS), one of the three major terrestrial broadcasters, said that content is being diffused through various new media channels, rather than terrestrial networks alone. Yellow Film said that if terms are favorable to all parties, they will not persist in the distribution of high-quality content to terrestrial stations but include only other media such as cable TV.
Telecommunications
ò Industry sources indicate that beginning next year, telecom rates are expected to substantially decrease as the government plans to allow big operators to provide discounted package services. This means the country's dominant telecom players KT and SK Telecom will be able to bundle fixed-line or wireless voice with data services at lower prices. Thus far, only small-sized companies have been permitted to offer such package services at discounted prices, a policy geared toward encouraging fair competition in the market. According to the countryÆs Ministry of Information and Communication, demands are escalating for bundled services as telecom companies hope to find new business models, while consumers want to reduce telecom-related fees. The ministry said that, following the consultation; there is a plan to finalize a framework on bundled services without having to change relevant legislation. Analysts are not sure how much KT and SK Telecom will trim prices for the envisioned package services but experts predict the reduction will be large considering precedents set at home and abroad.
China
Internet
ò Yahoo China President Xie Wen resigned after only staying in the job for 40 days. The company said that the reason for resignation was personal. Yahoo China was absorbed by Alibaba last year when Yahoo bought a 40 percent stake for US$1 billion. Following the takeover, Alibaba dubbed Yahoo China as a search engine to compete with Baidu and Google. Yahoo China, however, with its 12.9 percent market share, has remained a distant No.3, compared with 56 percent for Baidu. Since then, Yahoo China has switched back to a more portal-based format, which to experts led to some confusion regarding its identity.
ò 51job.com announced the dismissal of consolidated securities class action complaint filed against the company and some of its directors and senior executive officers. The online job site recalled that in January 2005, complaints were filed in the U.S. District Court for the Southern District of New York, with the complaints seeking unspecified damages on alleged violations of federal securities laws during the period from November 4, 2004 to January 14, 2005. The Court subsequently consolidated the complaints and appointed a lead plaintiff. On November 17, 2006, the Court entered an Order dismissing the action with prejudice.
Media, Entertainment and Gaming
ò Finet Group, a GEM-listed financial news service provider, announced plans to invest some US$30 million the next two years on mainland portals, mobile value-added services and online game operations. Earlier, Finet entered into a memorandum of understanding to spend US$3 million for a 50 percent stake in China PR News, which operates a portal called China Business Press Release Newswire, with an option to take a controlling stake in the future. FinetÆs top official said the company is seeking new funding from shareholders to finance the deal. The China PR News portal has more than 5,000 contacts in the mainland media. Finet posted a net loss of HK$1.6 million (US$206,000) for the year to March on revenues of HK$29 million (US$3.7 million). China PR News has set up partnerships with more than 100 mainland online portals to distribute stock market mandatory disclosures and offer other investor relations services. After the acquisition, Finet said it aims to be more aggressive with its expansion into the mainland Internet market, with the company focusing on mobile value-added services and online game markets. The company said it has a target list of about 20 online game operators in China, each holding 10 million registered users.
ò DVN (Holdings) Limited announced that its wholly-owned subsidiary (DVNS) has entered into a non-legally binding letter of intent (LOI) with Nanchong City Broadcasting TV Network Transmission Center (NCBN) of Sichuan, to establish a joint venture company to develop the digital broadcasting business in Nanchong City, in Sichuan. Under the LOI, both parties intend to set up a joint venture, with DVNS owning up to 49 percent stake and NCBN taking the remaining 51 percent stake. Under the agreement, DVN is expected to be responsible in providing the platform and equipment for the integration of digital broadcasting of the network, while NCBN will inject the relevant rights of the network and equipment. NCBN will also be responsible to procure the JV to become the exclusive operator, providing digital broadcasting and related services to Nanchong City and obtain all approvals from the relevant government authorities. The two companies said the details of the LOI will be finalized once the formal agreement has been signed.
Mobile/Wireless
ò Tencent announced its move to work with the Industrial Bank Company to launch a virtual credit card, considered the first of its kind in China. The two firms said they aim to have the new credit card, dubbed QQ Show Card, combined with Tencent's online payment platform Tenpay to create a new online payment option for users. Under the offering, QQ Show Card is attached to a tangible card and can be used to prepay for shopping items or online value-added services after being connected with a user's QQ number. The launching of this service follows TencentÆs earlier launching of a QQ debit card. The All-in-One-Card was made in cooperation with China Merchants Bank.
Software
ò Kingdee International Software Group announced its aim to generate up to 40 percent of annual international sales from its operations in Singapore, Malaysia and Indonesia by the end of next year. The companyÆs top official said that the sales push with Kingdee's partners into Southeast Asia's SMEs represented an opportunity to become a market leader with enterprise resource planning (ERP) products. The company also noted the absence of a dominant ERP vendor to SMEs in Asia. Industry observers noted that German firm SAP, the worldÆs largest supplier of business management software has tried, but is only the high-end vendor to large enterprises. Kingdee's growth in Southeast Asia has been supported by local technology consultants and software solutions providers such as Malaysia's YGL Convergence, Emation Technologies of Singapore and Indonesian-based Astragraphia Technologies. Kingdee said it plans to boost brand awareness and marketing in Thailand and Vietnam. Between 2008 and 2010, the targets for expansion include India, Australia and countries in the Middle East. Kingdee's first-half revenue went up by 17 percent to 286.7 million yuan (US$36.6 million) from 244.6 million yuan (US$31.2 million) in the same period last year. Kingdee listed in Hong Kong in 2005.
Hardware
ò Industry sources said that Meadville Technologies Group, maker of printed circuit boards and laminates, disclosed its plans to generate as much as US$200 million from an IPO in Hong Kong next quarter. Sources said that the offering will feature both old shares, as part of an employee shareholding plan, and new shares, with the final structure yet to be decided. The funds raised through the IPO are expected to be used for the firmÆs expansion in the mainland. The company, which operates seven factories, is looking to capture more of a global PCB market. According to Japan Marketing Survey Data, the PCB market is expected to grow from 7.5 to 8 percent in 2008. The global market for laminates, which are used in PCB construction, registered a 23 percent growth in 2005. China is expected to contribute 34 percent of world production in 2008, which is expected to hit HK$69 billion (US$8.8 billion) in the same year. The products of Meadville, connect electronic components needed to operate computers, mobile telephones and computer games. According to the market sources, HSBC and Citigroup are arranging the deal, which expects see at least 25 percent of the company floated. No comment from Meadville was available.
ò Kingboard Chemical Holdings revealed its plans to generate up to HK$5.8 billion (US$746 million) from listing its laminates division in Hong Kong. The unit, Kingboard Laminates Holdings, is valued at 11 to 14.3 times expected earnings for this year. Kingboard Laminates controls 32 percent of the mainland market for rigid laminates, more than double the 14 percent controlled by Guangdong Shengyi Scitech, its largest rival. Kingboard holds 10 percent of the global market, the largest share held by a single company along with Japan's Matsushita Electric Industrial, which holds a similar amount. Nan Ya of Taiwan holds about 9 percent. The company said about 60 percent of funds generated by Kingboard will go towards expansion and the rest will be used to repay debt and for general working capital. Industry observers note that global PCB makers have been relocating to China to be closer to the production facilities of electronic goods makers and to tap the lower labor costs offered by the country.
ò Shinhint Acoustic Link Holdings, a manufacturer of headphones and loudspeakers, revealed plans to sell flat speakers. Earlier in June, the company obtained exclusive rights for balanced-radiator technology from NXT, a sound solution provider listed in Britain, to produce flat speakers. It expects to have orders for about one million units in the first year. Shinhint said it is seeking to sell these flat speakers to Royal Philips Electronics of the Netherlands and other makers of liquid-crystal display televisions to boost gross profit margins from the 11.8 percent achieved in the first half of this year. The firm will share profit with NXT. The company posted 53 percent sales growth to HK$465 million (US$59.8 million) in the first half while net profit fell 5.5 percent to HK$7.8 million (US$1 million). The company said sales of its multimedia products, which accounted for 44 percent of revenue in the first half, posted a 24 percent rise to HK$205 million (US$26.3 million), a growth the company ascribed to demand from U.S. customers such as Logitech and Altec Lansing for personal computer speakers. The company looks to continue growth to the company's core division in coming years.
ò Changhong, a premier electronics manufacturer in China, announced that it has initiated a restructuring of its management by moving responsibilities to lower levels. With the restructuring, Changhong is now divided into four strategic units including Black Home Appliance (Multimedia), White Home Appliances, Accessories and Overseas Business. The changes have also brought in an addition by way of Changhong Jiahua, Guohong Communications, Hongwei Electronics, Information Technology and Digital Technology parallel with the four SBUs. The company said it adopted a new pattern for the SBU, transforming each of them into an independent branch, with separate presidents and a board of directors.
Ventures/Investments
ò Market sources said that China Communications Services (CCS), a China Telecom Group company is aiming to generate up to HK$2.8 billion (US$360.1 million) in an IPO and has attracted strong demand from institutional investors. The demand came even after CCS has upped its offer price by 12 percent last week. CCS provides infrastructure, business process outsourcing, content and other services to major mobile operators, including China Mobile, China Unicom, China Netcom and China Railcom. A company official also said that the company has made an investment of about 100 million yuan (US$12.7 million) in preparation work for the new 3G-related technology. China International Capital Corp and Goldman Sachs are the book runners.
ò Langchao and Intel announced the latest Memorandum of Understanding (MOU) entered into by them, which is seen as enhancing the strategic partnership between the two firms. In the latest development on their partnership, Langchao, the top server brand in China, and Intel, the global server giant, will now see Langchao enter Intel's Platform Strategic Review (PSR). With the MOU, the two firms will work jointly on the whole cycle of server products ranging from server platform research and designing to manufacturing and sales. A top Langchao official stated that his companyÆs entry into Intel's PSR is expected to bring an end to the lack of core and competitive technologies in the local server industry and bring Chinese servers into a new era of being domestically made.
Telecommunications
ò Industry sources said that Huawei Technologies, the mainland's largest telecommunications equipment maker, has entered into a deal to sell its stake in a mainland Internet infrastructure venture to partner 3Com and Goldman Sachs for about US$2 billion. Market sources said that 3Com, a U.S.-based computer network equipment maker, is interested in having control of Huawei-3Com because it has almost no presence in the mainland market other than the joint venture. Huawei-3Com's operational income climbed 70 percent to US$324 million in the first half of this year.
Taiwan
Telecommunications
ò Chunghwa Telecom revealed that it is considering an investment in the mainlandÆs broadband Internet and 3G mobile services. As a member of the World Trade Organizations, the mainland is expected to open its telecommunications market to foreign investors to meet its requirements as a new member. Beijing is also expected to award 3G licenses to foreign firms next year. Taiwan at present bans infrastructural investments by Taiwanese telecom companies in the mainland but is expected to relax the restrictions under pressure by businesses hoping to cash in on the massive business opportunities related to the 2008 Beijing Olympics games. TaiwanÆs government has a 35.6 percent stake in Chunghwa. Currently, Chunghwa Telecom provides roaming services in China but the company said it will co-operate with China Telecom, ChinaÆs largest fixed-line operator by subscribers, to allow its subscribers living in China to access Chunghwa TelecomÆs Hinet website.
Media, Entertainment and Gaming
ò Industry sources indicate that TaiwanÆs largest newspaper, Liberty Times, is planning to launch a 24-hour news channel next year, a move that is aimed at responding to the market need for news ahead of the 2008 presidential election. Market researches show that Liberty Times has grabbed some 23 percent of the countryÆs daily newspaper readership in the third quarter, topping Next Media's Taiwan Apple Daily. The cable news channel reportedly plans to spend US$1 billion setting up its infrastructure, looking for staff and securing carriage agreements with the various cable operators, with the launch expected to take place in summer. Market data shows that more than 90 percent of Taiwan households subscribe to pay-television services while less than 50 percent of the population are regular newspaper readers, compared to 80 percent 10 years ago.
Hardware
ò Industry sources said that 3Cems Corp, the printed circuit board making unit of Taipei-listed First International Computer, has plans to more than double the funds it is raising in its IPO to HK$622 million (US$80 million). The company is reportedly doing this by demanding an increased valuation of the shares it intends to sell on the main board next month. The flotation, comprising 344.8 million shares, of which 225 million are new and the remaining 119.8 million existing, will be offered by 3Cems' controlling shareholder, according to a pre-marketing document obtained by institutional investors. The company said it will generally use the proceeds from the IPO to purchase machinery and set up a production plant, and for general working capital. ABN Amro Rothschild is the bookrunner of the offer, while Taiwan's TSC Capital is also helping in the share sale.
Semiconductors
ò MediaTek, a Taiwan-based baseband and chip design company, announced that it has acquired Beijing start-up Pollex for US$13 million, with the acquisition aimed at Pollex's intellectual properties and engineering resources. MediaTek is the leading supplier in China of baseband chips, a key component of mobile phones responsible for communication and control. According to market research firm iSuppli, the company supplied 34.5 percent of the baseband chips used by Chinese original equipment manufacturers of mobile phones last year. JP Morgan indicated that MediaTek's revenues may grow from NT$46.3 billion (US$1.4 billion) last year to NT$53.5 billion (US$1.6 billion) this year. In 2003, the company was acquired U.S.-based Tvia for its video-related MPEG software technology for US$10 million, as well as Inprocomm of Taiwan in 2004 for US$3 million for its wireless local network patents. In 2005, MediaTek took over Taiwan-based Ubec for its short-range wireless, or Bluetooth, related technology for less than US$10 million. Analysts noted that MediaTek focuses on small acquisitions and has spent US$100 million to US$110 million on nine deals, including Pollex.
Hong Kong
Telecommunications
ò Fund managers and analysts consider PCCW's prospects in the high-growth mainland market and the outlook for its share price as dim after minority shareholders blocked Richard Li Tzar-kai's plan to sell his stake. Industry analysts also said that the firmÆs second-largest shareholder China Netcom Group, unprepared for Mr Li's move, considers him now an unwelcome partner. Minority shareholders of Pacific Century Regional Developments, a Singapore-listed firm controlled by Mr. Li, turned down an offer from former banker Mr. Leung, two charities owned by Mr. Li's father Li Ka-shing and Spanish company Telefonica to buy a 22.7 percent stake in PCCW for HK$9.2 billion (US$1.1 billion). Earlier, U.S. buyout firm TPG-Newbridge and Macquarie Bank failed in their bids to buy PCCW assets after Beijing objected to them falling into foreign hands. The two suitors would not comment. With more than 700,000 subscribers, PCCW at present has the most broadband television subscribers of any service provider in the world. In a related development, the PCCW chairman said he would continue to work with the China Network Communications Group (Netcom), which owns a 20 percent stake in PCCW in order to explore opportunities for the company.
Media, Entertainment and Gaming
ò Shaw Brothers (Hong Kong) disclosed that Sir Run Run Shaw, the controlling shareholder of film studio, has distanced himself from talks to sell his 75 percent stake in the company. Earlier, the studio reported an operating loss of HK$7 million (US$902,000) for the six months to September, compared to the HK$2.2 million loss (US$283,000) reported in the same period last year. Its net profit for the half year posted an 18 percent decline to HK$112.9 million (US$14.5 million), compared with HK$137.2 million (US$17.6 million) in the same period last year. The company reported a 34 percent drop in its revenue to HK$20.1 million (US$2.5 million). The sale of the stake is considered significant given the companyÆs stake in TVB. Separately, Sir Run Run personally holds an additional 32 percent stake in the broadcaster. Industry analysts cite the political importance of TVB as making any sale doubly important before the eyes of the State.
ò Analysts noted the strong first-half results from the two newest titles coming from the Hong Kong Economic Times Group, U Magazine, a travel and leisure weekly, and Take Me Home, a community-oriented paper. BNP Paribas stated that U Magazine, with a circulation exceeding 50,000 copies, appears to be a growth engine. The Hong Kong Economic Times Group reported a 5.4 percent rise in its profit for the six months to September to HK$56.3 million (US$7.2 million), with revenues registering a 12 percent rise to HK$400 million (US$51.4 million). BNP Paribas mentioned that the group's advertising receipts, which climbed 12 percent year on year to HK$273 million (US$35.1 million) is substantially higher than the local print media advertising market as a whole, which showed to 4.2 percent growth in the period. The group is behind the Hong Kong Economic Times, the leading financial daily.
Mobile/Wireless
ò The chairman of mobile operator Sunday Communications announced that 99.5 percent of its minority shareholders have approved the sale of SundayÆs main operating assets to parent company PCCW in a deal valued at some for HK$1.9 billion (US$244.3 million). The deal included the sale of assets including the mobile network and the 3G-mobile-telephone license. Huawei Technologies, China's largest telecommunications equipment maker holding 9.9 percent stake in Sunday, also voted for it. Huawei rejected PCCW's offer last year to privatize Sunday because PCCW did not propose to issue dividends after the deal. Sunday, Hong KongÆs smallest mobile operator, reported its net loss widened to HK$270.5 million (US$34.7 million) for the first half, compared with HK$61 million (US$7.8 billion) a year ago, with the firm citing strong competition in Hong Kong.
ò A company spokesperson said that Hutchison Whampoa's 3G-mobile-telephone business in Britain is undergoing a corporate restructuring that will result to the loss of 130 jobs. The change follows the companyÆs denial of rumors that 3UK was going to be a sold to a rival in Britain. Rivals identified include Vodafone of Britain and Telecom Orange of France. Earlier this month, Vodafone, Britain's largest mobile operator, revealed its interest in acquiring 3UK's assets if they are for sale. In the first half of this year, Hutchison's 3G business lost HK$12 billion (US$1.5 billion) before interest and tax.
ò Pointsec Mobile Technologies, a leader in mobile enterprise security, announced the establishment of its headquarters in Hong Kong. The companyÆs regional director stated that the move is a bid to establish a support to Pointsec's growing business in the region and spearhead its China expansion. The official said that by basing the new headquarters in Hong Kong, described as having one of the most mature telecommunications infrastructures in the world, the company will be ôwell placed to respond to the business opportunities in the rapidly developing Greater China marketplaceö. Pointsec offers a range of encryption coverage with support for Windows-based laptops and desktops. It also has Linux-based systems, removable storage media and popular wireless handhelds on the Microsoft, Symbian and Palm operating systems. Its products include Pointsec for PC, data security software for client PCs; Pointsec Media Encryption, data security software for removable media; and Pointsec for Pocket PCs. Pointsec Mobile Technologies has operations in Australia, Japan, Europe, the U.S. and Middle East. Pointsec, which was set up in 1988, said its client base included many of the world's largest organizations, including the U.S. Department of Justice, the U.S. Department of Defense, TeliaSonera and Ericsson, with the company maintaining alliances with Nokia, Entrust and Symbian.
Software
ò Digital Life Institute, a Hong Kong mobile-telephone software developer, indicated that it is looking to its push e-mail-based program to be adopted by mobile operators and telephone vendors who want to boost data revenue. The software, which allows information to be read on handsets, was in development for almost a year. It involves a simple syndication (RSS) information reader for handsets and mobile operators. The Java-based software helps telephone users gather news, entertainment gossip and market information in one reader without clicking on the telephone's Internet browser. The RSS software was launched in Hong Kong this summer through a partnership with the one of the city's largest mobile operators, Hong Kong CSL. At present, Digital Life is also looking for expansion overseas.
Singapore/Malaysia/Philippines/Indonesia
Internet
ò The Singaporean government announced that free wireless broadband Internet service will be available at public areas across the island a month ahead of schedule. The city-stateÆs Infocomm Development Authority also announced that it will a extend the free [email protected] program for three years, which is one year longer than announced previously. With this free service, the number of Internet users in Singapore is expected to grow to about 250,000 in two years. Under the offering, for consumers to log on to the free service, they need to register at the web site of any of the three operators, iCell Network, QMax Communications or SingTel. The service will allow surfing for free, online capabilities for notebook PC, PDA or mobile phones in downtown areas, major town centers, libraries, country clubs and shopping malls. At present, there are some 900 hotspots in Singapore, a number, which is expected to grow to 5,000 by September next year.
Information Technology
ò ictQatar announced that it has signed an agreement with Ecquaria Technologies in Singapore to implement the Qatar Services Infrastructure (QSi) project. QSi, based on Singapore's successful implementation of Public Service Infrastructure (PSI), aims to provide the Qatari government a rich and highly integrated centralized software platform to allow rapid deployment of public e-services via the Internet. The project is the second market following the MOU between Infocomm Development Authority (IDA) of Singapore and ictQatar that was signed in March 2006. The first project was the e-Schoolbag project, which is currently being implemented. Each project involves Singapore information and communication companies.
Hardware
ò Flextronics International Ltd. announced the completion of the acquisition of International DisplayWorks, Inc. (IDW). The enterprise value of the transaction is approximately placed at US$243 million. The two companies see the acquisition of IDW as broadening Flextronics' components business platform, expanding and diversifying the company's components offering, and increasing its customer portfolio. Headquartered in Singapore Flextronics is a leading electronics manufacturing services (EMS) provider focused on delivering complete design, engineering and manufacturing services to automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. With fiscal year 2006 revenues from operations of US$15.3 billion, Flextronics helps customersÆ design, build, ship, and service electronics products through a network of facilities in over 30 countries on four continents. IDW is a manufacturer and designer of high quality liquid crystal displays, modules and assemblies for a variety of customer needs including OEM applications. IDW operates manufacturing facilities in China, with sales offices are located in United States, Europe, Hong Kong, Singapore, and China.
ò Nidec Corporation announced that its Board of Directors has resolved to acquire 466,133,000 shares of common stock and subscription rights for 150,000 new shares in Brilliant Manufacturing Limited in Singapore by way of tender offer. Upon completion of the Tender Offer, Brilliant is expected to become a consolidated subsidiary of the Company. The Company believes that the acquisition of Brilliant, which manufactures base plates and top covers for hard disk drives, will help strengthen the company's flagship hard-disk-drive motor business. Brilliant has established a manufacturing presence in Singapore, Indonesia, Thailand and China.
Telecommunications
ò Actelis Networks, the leading provider of Carrier Ethernet over Copper solutions, announced that BayanTel, a leading provider of voice, Internet and data communication services in the Philippines, has successfully introduced Actelis' innovative EFMplus technology in Manila. The deployment is the first phase in a program to boost local access speeds for businesses and residential subscribers across the Philippines. Actelis' solutions enable BayanTel to seamlessly extend the reach of their services beyond the fiber network, making their services available to the majority of potential customers in the Philippines. The company plans to dramatically expand the reach of its services by deploying Actelis' Carrier Ethernet over Copper equipment, which supports a variety of applications including high bandwidth Ethernet services for business consumers.
Ventures/Investments
ò Business process outsourcing (BPO) firm Paxys Inc's Malaysia-based affiliate Usaha Tegas Group announced its acquisition of a 24-percent stake in New York-based Panther/DCP Holdings LLC, which controls Florida-based service provider PRC LLC. In a statement to the stock exchange, Paxys said that with Usaha Tegas' acquisition of an interest in Panther/DCP Holdings, PRC is now bound to an exclusivity agreement with Paxys, which, in turn, agreed not to compete for PRC's existing clients. The Usaha Tegas Group, the majority shareholder of Paxys, is a Malaysian conglomerate with interests in the telecommunications, media, power generation, oil and gas, hotel and property sectors. PRC, a support services company, providing sales and customer management services through its global network of 32 contact centers. Paxys is the only listed BPO in the Philippines.
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