A week in tech: Part 2

A roundup of all the tech news from China, Taiwan, Hong Kong, Singapore and Malaysia.

China

Mobile / Wireless

- China Mobile (Hong Kong) delivers its first dividend, triggering this year's largest one-day share-price gain by the telecommunications firm. The mainland's No 1 mobile operator will pay a final dividend of 32 cents per share, or 20 per cent of its earnings, which rose 17 per cent last year to 32.74 billion yuan. Analysts said a dividend yield of 1.91 per cent was unlikely to fuel further gains. Also, China Mobile is squeezing its capital-spending budget, further increasing the pressure on Ericsson and other suppliers of network equipment. Announcing its annual results, China Mobile trimmed its capital-expenditure budget for 2003 to $5.6 billion from $5.8 billion. The new target represents a 6.7% decline from actual spending in 2002.

- SK seals mobile Internet deal with China Unicom. Under the contract, SK Telecom will provide key wireless-Internet content and services to the joint venture as part of am effort to make inroads into the Chinese wireless Internet market. China Unicom is interested in learning the cutting-edge wireless Internet service technology and obtaining high-quality content through the joint venture deal with SK.

- Shanghai the most important battleground in China for mobile companies, according to a 2002 white paper published yesterday by the city's Telecommunications Bureau. At the end of last year, the city had 6.72 million fixed-line phones, a penetration rate of 41.6 per cent, and 9.12 million mobile phones, a penetration rate of 56.6 per cent.

- Siemens, Nokia, Motorola and Sony Ericsson compete to gain market share in the mainland, the world's biggest handset market, as growth slows elsewhere. Siemens aims to raise its share of the Chinese market to 10 per cent from 4 per cent. Nokia wants to regain the top slot it lost to Motorola last year. Sony Ericsson is targeting China to make up for lost market share in Europe and the United States.

Semiconductors

- Former Huawei employee alleges Huawei had operated software that mirrored Cisco's right down to the "bugs". The document was filed by Cisco in support of its request for a preliminary injunction to stop privately held Huawei and its US subsidiaries from copying Cisco's intellectual property and distributing Huawei's products with the disputed software.

Information Technology

- Beijing government-controlled Capinfo returned to profit last year, with revenue jumping 59 per cent to 237 million yuan. The Internet solutions provider posted a 10 million yuan profit, compared with a loss of 9.9 million yuan in 2001. No dividend was declared. E-government projects contributed 67 per cent to revenue, with the rest coming from e-commerce business.

Taiwan

Semiconductors

- TSMC chairman expects the second quarter will be much stronger than during the first quarter. Morris Chang added that the semiconductor industry overall is poised to perform better in the second quarter. He said his upbeat assessment was prompted by strengthening book-to-bill ratios during the past few months, but he gave no specific numbers.

- Philips Electronics to increase chip outsourcing to three foundry chipmakers in Asia, with priority to Taiwan Semiconductor Manufacturing Co. However, Philips said its doesn't expect to make any new orders for chips in the near term. Over the long haul, the company will farm out as much as 20% to 30% of all chip production, up from 10% currently.

- ProMOS Technologies ends a licensing agreement with Infineon. However, ProMOS said it still had a right to the technology already transferred from Infineon Technologies and held out hopes the differences between the two could be resolved. ProMOS had terminated the agreement, but was still entitled to the use of all technology already transferred, it said in a statement.

Hardware

- Chi Mei Optoelectronics develops color filter technology. Color filter technology is typically licensed from South Korean and Japanese firms. Taiwan is the world's second largest maker of the TFT-LCD panels used in flat-screen computer displays and televisions. The company has set up a joint venture in the Tainan Science-based Industrial Park to produce color filters.

Singapore / Malaysia

Telecommunications

- Internal audit casts doubts on accounting processes at SingTel Optus, with the previous ownership of Cable & Wireless taking the blame. Optus has discounted local reports of the leaked internal audit. The report claims 20 per cent of all money owed to the company should be considered as doubtful debt. Optus has total receivables of about A$620 million.

- Malaysia's Celcom wins shareholder approval for a $1 billion takeover by government-owned Telekom Malaysia. This was despite opposition from long-time partner and shareholder Deutsche Telekom. Telekom Malaysia's takeover of No 2 mobile firm Celcom (Malaysia) will create the country's largest mobile group, but Deutsche is seeking better exit terms.

Hong Kong

Telecommunications

- PCCW reported a net loss for 2002 after previously announced items, but underlying earnings rose on cost cutting. Hong Kong's dominant telecommunications company also retracted a six-month-old pledge to start paying dividends for the first time next year, saying it wants to focus on debt reduction. It did little to allay concerns about its shrinking share of the fixed-line market. PCCW shares dived 4.95 per cent, and analysts downgraded the company's investment recommendation on disappointment about the dividend policy and concerns about potential acquisitions. Separately, HSBC said PCCW's core operating unit will pre-pay $386 million of a loan originally due in February 2008, bank syndicate member on Tuesday, in the latest step by the company to refinance its debt. The prepayment, to be made on March 28, leaves $395 million remaining in the loan tranche due in 2008.

- Operating earnings at Hutchison's telecommunications division improved last year. It has 2G operations in Hong Kong, Australia, India and Israel, and said the division's earnings before interest and tax rose 13.76 per cent to HK$818 million. It had a 34 per cent growth in subscriber numbers to 6.1 million, which contributed to revenue of HK$13.36 billion.

Mobile / Wireless

- Hongkong.com to acquire mainland mobile service provider Palmweb. The IT solutions provider said it would pay no more than $55 million for Palmweb. Hongkong.com will pay for Palmweb in three installments. The first installment of $14 million will be paid after the deal is sealed next month. The following payments would be adjusted with reference to Palmweb's financial contribution.

- Large market for SMS projects drives the expansion plans of Mobileway, a wireless applications specialist. Mobileway's mobile transaction tracker system has been tapped for use in the "verified by Visa" mobile authentication service introduced in the SAR by Bank of China. Launched by Visa and Bank of China, the service is the first to use text-based SMS for payment authentication.

Hardware

- LG.Philips Displays is betting on strong sales from China and other emerging economies to expand its market for cathode ray tubes (CRTs) and fend off the challenge from newer screen technologies. LG.Philips Displays posted $165 million in profits on revenues of $4.4 billion last year. A 5 per cent rise in CRT sales helped the firm withstand competition from makers of thinner screens.

- IBM has over half of the server market in Hong Kong - a first for any vendor in this area, according to IDC. IBM increased its standard Intel architecture servers market share by 12.6 per cent last year over 2001, and topped the market with a 38.6 per cent revenue share. This number was 6.6 points higher than the second-placed vendor.

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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