A week in tech, October 17-23

A roundup of all the latest tech news.

ò NTT Communications (NTT Com) announced that it has entered into an agreement with Videsh Sanchar Nigam Limited (VSNL), a leading Indian telecom and internet service provider. The agreement will allow NTT Com clients traveling in India to use the Tata Indicom Wi-Fi network of wireless broadband access points for international roaming. With the agreement, the roaming service does not require any additional subscription or startup fee. Currently, NTT Com also has international roaming arrangements with KT (South Korea), Maxis (Malaysia), StarHub (Singapore), British Telecom (UK), Telecom Italia (Italy), Telestra (Australia) and the T-Mobile Group (USA, Austria, Czech Republic, Germany, Netherlands and UK). The companies are all members of the Wireless Broadband Alliance (WBA), an industry alliance encompassing telecom operators, equipment makers and service providers in Asia-Pacific, the Americas and Europe. NTT Com is a co-founder of the WBA and currently the only Japanese member.

ò NTT Corp. said it will launch a web site leasing service for companies that will allow them to use the site for videos and other promotional material. The service is expected to enable small or midsize companies lacking the knowledge to create their own web sites to upload videos related to their products on a leased cyberspace.

ò Comel Co., a fully owned subsidiary of Softbank Telecom Corp., and Vanten K.K. announced that they have developed what they claim to be JapanÆs first wireless digital signage system. The new system supports 3G mobile communications technology called High Speed Downlink Packet Access (HSDPA) and allows content such as advertisements and information to be shown via the Internet on displays set up at commercial facilities, railway stations, airports and bus terminals. Comel and Vanten are companies into digital signage. Softbank Telecom is affiliated with Softbank Corp.

ò Sanyo Electric disclosed that it has changed its mind about selling its semiconductor subsidiary. Sanyo said the decision was made after the talks with Advantage Partners LLP fell through. Industry sources said Advantage Partners failed to raise sufficient funds to buy Sanyo Semiconductor Co. Earlier, Sanyo granted Advantage Partners priority negotiating rights on the sale as the fund proposed the highest acquisition price in bidding held late August, and had been negotiating a deal since then. According to industry analysts, the decision of Sanyo not to sell Sanyo Semiconductor is likely to force Sanyo to review the current restructuring plan, which calls on the company to sell loss-making operations like manufacturing of chips and mobile phones.

ò Sony Corp announced that it has agreed to sell its production facilities for the computer chip of its PlayStation 3 game console to rival Toshiba Corp. The deal is estimated to be worth more than US$1 billion. Analysts see this move of Sony as part of its efforts to concentrate more on its core electronics business. Sources said the Sony and Toshiba are forging a joint venture to produce high-performance semiconductors.

ò The countryÆs Ministry of Information and Communication (MOIC) is planning to introduce a measure that would require key telecommunication service providers to adopt a tougher merger standard. The ministry is calling the companies to consider the mergerÆs impact on public interest. Industry analysts expect the measure to counter foreign hedge funds or short-term profit takers from acquiring and eventually disinvesting in Korean telecoms. The concern of the measure covers the following: whether a merger would harm public interest; whether the merger would increase the efficiency of the economy by increasing employment, and whether the merger would facilitate the local economy and foster small and medium companies.

ò LG Electronics reported a surge in its earnings in the third quarter of this year, with the company attributing the rise to solid sales of mobile handsets and other digital goods in global markets. LG said its net income hit 339.2 billion won ($369.3 million) in the three months to September, compared with 22.7 billion won ($24.7 million) it posted a year earlier.

ò Hynix Semiconductor announced its plans to resume its non-memory business, three years after the firm sold its non-memory unit in 2004. Hynix said it will resume its system integrated circuit (IC) business, with the aim of expanding its business portfolio. Industry sources said the company has plans to work with an outside non-memory chip design company to produce non-memory products using its existing 200 mm wafer production lines. Hynix Semiconductor Inc. reported a 56 percent decline in its third-quarter net income to 168 billion won ($183 million).

Information Technology
ò According to the Korea Information Society Development Institute, South KoreaÆs IT exports are expected to post an 11 percent rise in 2008 compared to 2007 to hit US$139 billion. According to the instituteÆs top official, the countryÆs outbound shipments of communication-related parts and devices are expected to register growth whereas those for information and broadcasting are seen as declining. The group said that IT production is also projected to rise by 6 percent next year to reach about US$300 billion.

ò According to industry sources, Samsung Corning is set to put up a production plant for indium tin oxide (ITO) production in Taiwan. Observers note that Samsung Corning has been aggressively growing its ITO market share to Taiwan panel makers in recent years with Chunghwa Picture Tubes (CPT), HannStar Display and color filter (CF) maker Sintek Photronic among its customers. The sources estimate that Samsung Corning holds about 10 - 15 percent of the ITO market in Taiwan. In South Korea, the company has already supplied ITO to one of its parent companies, Samsung Electronics, and the JV of Samsung and Sony, S-LCD, for production of LCD panels at eighth-generation (8G) plants.

ò Tencent announced that it has set up Tencent Research Institute, a core technology platform for the company. The company disclosed that the center, the setting up of which has involved more than 100 million yuan ($13.3 million) in investment, will be focused on developing practical Internet technology for the coming years. Tencent has also set up research institutes in Beijing, Shanghai and Shenzhen, all of which will focus on studying six major areas of storage technology, data mining, multimedia, Chinese language processing, distributed networks and wireless services.

ò According to market sources, Industrial and Commercial Bank of China has made the latest investment in business-to-business Internet services provider Alibaba. Media sources also indicate that Alibaba is going to initiate a road show to raise $1 billion. Sources said Alibaba has introduced five basic investors this time, which are expected to invest some $145 million to purchase AlibabaÆs shares. Part of the condition states that the five investors must not sell AlibabaÆs shares within two years.

Media, Entertainment and Gaming
ò CDC Games, a business unit of CDC Corporation, announced that its parent company, CDC Corporation, has filed a lawsuit in the South Korean courts against Mgame, the developer of Yulgang. The lawsuit is for breach of contract and alleges that Mgame has broken contractual obligations that the company owed to CDC Corporation by failing to provide certain financial and operating data and other information which Mgame is required to provide to CDC Corporation as a shareholder of Mgame. In March 2007, CDC signed a definitive agreement to make a strategic investment in Mgame. As a result of this investment, CDC became Mgame's largest external shareholder while extending its license of Yulgang to 2010. The lawsuit in South Korea is in addition to the lawsuit CDC Games has filed in the courts of Hong Kong against Mgame for breach of contract, stating that Mgame has not been providing adequate technical support of Yulgang, and Mgame has not been supporting CDC Games in their efforts to combat pirate servers.

ò Shanda Interactive Entertainment announced that the holders of its $275 million of convertible notes have exercised their right to require the online video game company to repurchase some of the notes. With this move, Shanda said it will reacquire some an estimated $15 million of the zero coupon senior convertible notes due 2014. Shanda said it also exercised its right to redeem all of the remaining outstanding convertible notes, which have been valued at about $260 million of notes.

ò According to market sources, Giant Interactive Group Inc is getting ready to initiate marketing a US IPO worth up to US$800 million. The deal is described by industry observers as the largest capital raising in ChinaÆs online game industry. The Shanghai-based company is reportedly selling a 20 percent stake valued at from about $700 million to $800 million. The company looks to trading its shares on the New York Stock Exchange, with Merrill Lynch and UBS handling the listing.

ò China Unicom officially announced that it will enter the bidding of the fifth 3G license in Hong Kong. According to the Office of the Telecommunications Authority (OFTA), it is currently reviewing the qualification of each bidder and it is expected to auction the 3G license at a base price of HK$76 million ($9.8 million) by the end of this month. It is said that the owner of the license will be entitled to spend one year laying down networks in Hong Kong and launch CDMA 2000 based 3G service in the area before November 20, 2008.


ò Global On, a WiMAX operating licensee for the northern region of Taiwan, announced its decision to change in its corporate name to Global Mobile. With the change, the company also disclosed that it has set up a WiMAX digital content alliance in preparation for beginning its WiMAX operations. According to its chairman, Global Mobile will increase its paid-in capital from NT$1 billion ($30.6 million), the required minimum level for a WiMAX licensee, to about NT$5 billion ($153.4 million), an estimated amount needed for infrastructure construction. For the capital expansion, Global Mobile plans to invite investment from providers of digital content, makers of network and communication hardware, and operators of online platforms in Taiwan, mainly, as well as foreign enterprises with certain strategic value to the company. The WiMAX digital content alliance counts among its members Era Digital Media, Eastern Broadcasting, Videoland and Soft-World International. These members are expected to become shareholders of Global Mobile.

ò According to a company filing with the Taiwan Stock Exchange, Power Quotient International (PQI), a memory module maker, has added additional investment at its China-based subsidiary, which specializes in the production of infotainment devices for automobiles. The company announced that it looks to making another investment worth $1 million in the subsidiary, which it established with a China-based automobile design company in March 2006. PQI said the China subsidiary will invest in the development of in-car entertainment system devices.

ò Sources from Macronix International cited the huge orders from Nintendo for game console-use chips as the reason for the company t outsource more 8-inch and 12-inch production. Given this development, the company forecasts its sales to likely go over NT$3 billion ($81.8 million) in October.

ò According to a filing with the Taiwan Stock Exchange, Tatung has bought a 16.2 percent stake in Proview by way of an investment of NT$652 million ($19.9 million) through Tatung's subsidiary San Chih Semiconductor. Market sources also indicated that Tatung has secured three seats on the board of directors at Proview. In a related development, TatungÆs top official announced that the company would begin the shipment of LCD TVs to Proview using panels from Chunghwa Picture Tubes (CPT).

Hong Kong

ò Hutchison announced the launching of its 3G services through its Macau mobile operation Hutchison Telephone (Macau) Limited. The company said that Hutchison Telecom Macau has deployed WCDMA technology with backing from the expertise of Hutchison Telecom and 3 Group. The launch will bring about services that include the range of multi-media content services with attractive tariff plans and handset choices together basic voice communications.

ò The Office of the Telecommunications Authority in Hong Kong announced that, after the expiration date for bidding of radio spectrum for the provision of CDMA 2000 mobile services, only PCCW-HKT Telephone Limited submitted application. With the Hong Kong company meeting all the pre-qualification requirements, PCCW-HKT technically becomes the Provisional Successful Bidder under the terms and conditions of the auction. PCCW-HKT is required to pay the Spectrum Utilisation Fee of HK$76 million ($9.8 million) and provide to the Telecommunications Authority (TA) a Performance Bond of HK$150 million ($19.3 million) by November 2007 before it will be declared as the Successful Bidder.


ò Cable & Wireless Europe, Asia and the US (C&W) announced that it has given an extension to its global telecom services agreement with Malaysia-based TM Bhd in a bid to further expand its presence in Asia. With the move, TM will remain as a communication infrastructure provider with access to C&WÆs international multi-protocol label switching (MPLS) backbone and thus will provide C&W access to its MPLS network in Malaysia, South Asia and the Middle East. The agreement extension is expected to see both companies setting up a network-to-network interconnect infrastructure (NNI) to leverage on each otherÆs extensive MPLS networks for wider coverage.

ò Axesstel, Inc. who specializes in the design and development of fixed wireless voice and broadband data products, and PT Smart Telecom announced a two year supply agreement estimated to be worth $68 million. The agreement covers joint marketing and volume commitments for Axesstel phones and wireless broadband USB modems, with an option to purchase Axesstel enhanced feature phones and 3G gateways part of the agreement. Shipments of the phones and USB modems are scheduled to begin this month and continue over the next two years. Smart Telecom is a new cellular telecommunication provider in Indonesia providing services for retail and corporate customers in more than 50 cities in Java Island and will soon cover all regions in Indonesia.

ò Bayan Telecommunications (Bayan) disclosed that its wireless landline service is expected to help the rise of its landline business. The Philippine telco said Span, BayanÆs wireless loop service is predicted to hit 100,000 subscribers by the end of this year, which will boost the firmÆs landline subscriber base by a third. According to Bayan, it has spent some 1.5 billion pesos ($34 million) since 2005 for its Span service, which at present serves about 70,000 clients. The telco estimates about 25 billion pesos ($566.7 million) needed if Bayan aims to cover the entire country with its wireless landline service.

ò According to industry sources, Smart Broadband Inc. (SBI), the wireless broadband unit of Smart Communications Inc., is buying some assets of Mindano-based Cruz Telephone Co. Inc. (Cruztelco) for 371.3 million pesos ($8.4 million). A company spokesperson described the acquisition as not only allowing the company to boost its services in Mindanao but also making it possible for the company to offer wireless Internet to clients.

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