A week in tech; part 2

A round up of tech news in China, Taiwan, Hong Kong, Singapore and Malaysia.

A week in China tech


- With people staying indoors to avoid SARS, China's portals and mobile phone text messages saw a marked increase in traffic as China's 59.1 million Internet users searched for news relating to SARS and the efforts being taken to control it. Baidu, a Chinese-language search engine, saw an overall 9% increase in daily traffic. Sohu.com, a search engine and web portal, reported this month that SARS was its most popular search string, generating 30,000 queries a day. SinoLinx, the news side of the Xianzai.com web information service for foreigners in China, also puts SARS at number one.

Mobile / Wireless

- UTStarcom, the biggest supplier of wireless phone systems to China, said it was two months behind on installing a citywide cordless system in Beijing because SARS quarantine rules had kept engineers from their work. Beijing has quarantined more than 24,000 people in a bid to control SARS, which has infected more than 2,300 people in the city.

- China Mobile and China Unicom subscriber growth slowed due to SARS. China Mobile Ltd. said it had 125.5 million subscribers at the end of April, up 1.7 million from a month earlier. Net subscriber growth for April was lower than the two million users added during March, mainly due to SARS the company said. China Unicom Ltd. said its subscriber growth rate fell to 2.7% for April, the second lowest level for 2002 and 2003. April subscriber growth for Unicom's year-old CDMA service was 6.9%, one of the lowest rates in the system's short history.

- Haier-CCT Holdings will invest 250 million yuan ($30.2 million) to set up a wholly owned mobile phone manufacturing company. The investment will replace Haier-CCT's original plan to provide a Rmb161.3 million ($19.5 million) interest-free loan to its existing handset joint venture with Haier Group, the mainland home appliance giant. Haier-CCT said it had changed its plan because it wanted to better align its capital expenditure plans and working capital needs. The new entity would enjoy import tax exemption and an income tax holiday as a new wholly foreign-owned enterprise.

- Nokia unveiled a mobile phone specially developed by a team in Beijing for the vast Chinese-language market, featuring handwriting recognition and a design inspired by historical icons. The Finnish mobile communications giant said the Nokia 6108, which can recognizes Chinese and Latin character strokes on a touch pad, would be available in Asia-Pacific markets in the third quarter this year.


- The mainland's telecommunications sector will likely be one of the few industries to gain from SARS. According to a study conducted by the policy research unit of the Ministry of Information Industry, the telecommunications industry will see revenue rise by between Rmb4 billion yuan ($483.2 million) and Rmb9.5 billion ($1.1 billion), depending on how quickly SARS can be contained. Although investment in telecommunications equipment and infrastructure would slow down, traffic would increase as people cut down on travel and meetings, according to the director of the Institute of Communications Policy.

Venture Capital / Investments

- The Zhangjiang Hi-Tech Park in the Pudong District of Shanghai has attracted $8 billion of investment in the past three years. Of the total, $6.6 billion came from abroad, said the administration of the industrial park. The output value of the park has totaled Rmb15.4 billion yuan ($1.9 billion) in the past three years. More than 1,000 software companies have been located in the software park in Zhangjiang, including Microsoft, India-based Satyam Computer Services, Japan-based Sony and domestic computer giant Legend. The industrial park expected its software sector to produce Rmb13 billion ($1.6 billion) of output value and $400 million of export volume by 2005.

A week in Taiwan tech


- Macronix International, Taiwan's largest maker of memory chips for electronic games, will sell one billion new shares to help fund expansion and pay debt. The sale, which will increase Macronix's shares outstanding by more than a quarter, would raise NT$5.5 billion ($158.5 million). Macronix, which has posted six consecutive quarterly losses, has NT$3 billion ($86.5 million) in debt maturing in 2006, NT$6.3 billion ($181.6 million) in 2007 and NT$3.1 billion ($89.3 million) the following year, according to Bloomberg data.

A week in Singapore / Malaysia tech

Mobile / Wireless

- Three state agencies are set to acquire a 10.6% interest in Maxis Communication Bhd., Malaysia's largest cellular phone operator, for about Rmb1.3 billion ringgit ($263.1 million) in one of the country's biggest ever secondary market equity placements. Harapan Nusantara Sdn. Bhd. - which owns a 24.3% interest in Maxis - will sell 260 million shares of the phone company at 5.10 ringgit to the Employees Provident Fund (EPF), Kumpulan Wang Amanah Pencen (KWAP), and Tabung Haji. Harapan Nusantara will sell 100 million shares each to the EPF, Malaysia's national pension fund, and KWAP, a civil service retirement fund. Tabung Haji will acquire the remaining 60 million Maxis shares.


- A dispute over foreign access to fiber-optic cables is boiling over in Asia. In Singapore, SingTel owns most of the cables that connect buildings in the city center to cables that send data around the world. SingTel charges other carriers rates that are five or six times higher than in cities such as New York, say international carriers and US trade officials. They contend that the dominant local carrier in other Asian countries charge high rates as well. Singapore Telecommunications Ltd. says its rates are fairly priced. The dispute highlights the intense competition for revenue as international carriers fight to stay afloat at a time when their Asian counterparts, such as SingTel have continued to prosper.

A week in Hong Kong tech

Mobile / Wireless

- Hutchison Whampoa has hinted to the market that it might miss its target of signing up two million third-generation (3G) mobile subscribers in Britain and Italy this year. The conglomerate previously indicated it aimed to sign up one million subscribers in both markets. The company has already started 3G operations in Austria and Sweden, and plans to launch in Denmark and Ireland later this year. Analysts said Hutchison was trying to tone down market expectations for its 3G operations - particularly in Britain. Hutchison was recently reported to have 20,000 subscribers in Britain following its launch in March, trailing its Italian operation, which had more than 50,000 subscribers.

- Hutchison Telecom is set for a summer launch of its 3G mobile phone service in Hong Kong after starting an online pre-registration campaign. Hutchison Telecom's promotion was well received as more than 3,000 users snapped up new mobile numbers during an early-bird sign-up on Yahoo!


- City Telecom may enter the local mobile market in 2006 should the government stick to a plan to open the sector further. City Telecom would consider a market entry should the government proceed with plans to sell more mobile-phone radio spectrum in three years time, according to its chairman, Ricky Wong Wai-kay. While City Telecom is small relative to the leading players, it is one of the most profitable with interim profit of HK$112.9 million ($14.5 million).

- PCCW has applied for a judicial review of an Office of the Telecommunications Authority (OFTA) ruling on broadband interconnection. This marks the first time a telecom operator has challenged an OFTA decision through legal channels, and could change the landscape of Hong Kong's broadband market. PCCW is seeking relief from an OFTA determination on terms and conditions of type two broadband interconnection, through which it links its local loop with rival operators.

- A price war is looming in the long-distance telecommunications market, with Wharf T&T announcing a 75% reduction for calls to China for its corporate clients. The Wharf unit is lowering its mainland calling charge to 17 cents per minute from 67 cents-- its second reduction in four months-- in a bid to grab market share from rivals. The three-month promotional offer is believed to be aimed mainly at the IDD business of City Telecom, whose pay-television services to be launched in summer will be a threat to market-leader i-Cable Communications, a subsidiary of Wharf.

A week in tech is brought to you by FinanceAsia, and IRG, Asia's boutique investment bank to the telecoms, media and tech sectors. More can be found at:

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