A week in tech

A round up of all the latest tech news from Asia.



- En-Japan Inc., an internet job information service provider, is seeking to boost parent-only-pretax profit to ¥6.9 billion ($63 million) in the business year to December 2008, up 290% from 2003, company sources said. The Tokyo-based company, which has so far focused on ads for mid-career hires, hopes its new business of handling ads designed to recruit college graduates will help it attain the earnings targets. En-Japan took over the new business from an affiliated firm in June. The company expects the operation to chalk up sales of ¥870 million ($7.9 million) in the current year, but post a pretax loss of ¥100 million ($0.9 million) mainly due to personnel costs.


- Oracle Japan has announced that it has begun marketing the Oracle E-Business Special Suite Special Edition (EBS-SE) with the newly developed Kanban Template primarily targeting Japanese auto parts manufacturers operating in China. EBS-SE is a suite of solutions that enable users to manage customer interactions, ship orders, collect payment, and other tasks using a single database. With the number of Japanese auto parts manufacturers entering the Chinese market lately increasing, Oracle Japan has bundled EBS-SE with the new kanban (just-in-time) production solution module. Kanban production is the mainstream manufacturing method in the auto industry today. The new solution pack, including hardware and installation and first-year maintenance costs, sells for ¥25 million ($228,000).


- Softbank Corp. will enter the fixed-line telephone business in December using its own infrastructure. The Japanese internet business company did not specify a target for subscriber numbers or an investment amount. The firm will build relay facilities in the telephone stations operated across the country by the former telecommunications monopoly, Nippon Telegraph & Telephone Corp. Using the new facilities and the existing service network of its telecommunications subsidiary, Japan Telecom Co., Softbank aims to offer fixed-line services at a cheaper rate than NTT.

- Shares of Japan's telecommunication giant Nippon Telegraph & Telephone Corp. dropped on concerns that an up-and coming rival could deal a blow to its business by offering cheaper fixed line services. Investors sold shares of NTT, as well as Japan's second largest telecommunication carrier KDDI Corp., following a report that internet business company Softbank Corp will start a fixed line phone service in December that charges 10%-20% lower base fees than NTT.

- Global Access Ltd. plans to begin offering a 10 Gbps Ethernet leased line service between Tokyo, Nagoya and Osaka in September. The telecommunications firm will charge ¥10.8 million ($99,000) a month for a Tokyo-Osaka line around three times the fee it charges for its existing 1 Gbps Ethernet leased line service. The 10 Gbps service, which comes with a bandwidth guarantee, will also be offered for Tokyo-Nagoya an Nagoya-Osaka communications at ¥7.2 million ($66,000) a month. Global Access believes the high bandwidth will attract demand from television stations, internet service providers and R& D institutions.



- eBay offered about $530 million to buy the remainder of South Korean affiliate Internet Auction as it pushes deeper into Asia. The world's biggest online auctioneer agreed to pay key institutional shareholders $325 million to raise its stake in South Korea's industry leader to 86% from 62%. Internet Auction has 9.9 million subscribers, more than 20% of the country's population, and had 2.5 million items up for auction at the end of June. Internet Auction competes with Daum Communications, LG e-shop and Interpark in providing fixed-price online shopping. EBay has zeroed in on Asia's emerging market, battling auction rival Yahoo! in China and elsewhere in its quest to meet Wall Street's growth expectations.

- Korean online music website Bugs said that it is negotiating with Chinese internet companies to set up a Chinese joint venture for China's online music market. Chinese internet portals Sina and eTang are potential partners. According to officials of Bugs, the joint venture would include a $100 million investment, with the Chinese partner investing 30%. Negotiation results will be released by the end of this month. Bugs also hopes the joint venture can start services by the end of this year and list on NASDAQ in the future.


- KT Corp., Korea's largest fixed-line and broadband internet carrier, will invest W18 trillion ($15.6 billion) by 2010 in new growth businesses such as next-generation mobile communication and home networking. The announcement comes after the former state fixed-line monopoly disclosed plans to increase its revenue to W27 trillion ($23 billion) by 2010 from W11.6 trillion ($10 billion) in 2003. The company denied speculation that KT may absorb its mobile affiliate KT Freetel Co. and internet portal unit KT Hitel Co. to enhance their competitiveness. The number of fixed-line customers in Korea declined to 22.8 million at the end of 2003 from 23.4 million a year earlier. Meanwhile, the number of mobile phone customers has been continuing to grow, reaching the 35 million mark this year. Mobile phone customers surpassed fixed-line connections in 1999.

- The government picked three consortia, respectively led by SK Telecom Co., KT Corp. and Dacom Corp., to take up trial operations of new networks for converged telecom and broadband services. The broadband convergence network is designed to provide internet access at speeds of 50 Mbps to 100 Mbps, about 50 times faster than current conventional services, with nationwide coverage. The network infrastructure is expected to provide the backbone for future communication and computing services, such as internet protocol version 6 (Ipv6), next-generation mobile telephony, radio-frequency identification technology and other advance solution. KT controls more than 95% of Korea's fixed-line market and 51% of the broadband internet market. SK Telecom controls 18.7 million of Korea's 35 million mobile-phone customers representing a market share of 51.6%.



- Electronic signatures will carry the same legal weight as seals and handwritten signatures in business transactions on the mainland starting from April. E-commerce has been growing rapidly, and with domestic revenue amounting to $60 billion last year, and there have been growing calls for legislation to protect those involved in online transactions. An electronic signature is a unique sequence of characters, a scanned-in signature, a fingerprint scan or other form of personal code with which Internet users can prove their identity. The Law on Electronic Signature was signed at the end of a Standing Committee meeting of the National People' Congress. Under the legislation, people convicted of forging electronic signatures, falsely using another person's signature or stealing passwords containing e-signatures will be punished under criminal law, while infringements resulting in financial loss will be subject to civil law. The legislation stipulates that providers of online signature certification must be approved by governments and will be liable for claims by clients if the regulations are violated.

- Baidu's acquisition of hao123.com has become the focus of the 2004 China Internet Conference and Asia-Pacific Region Digital Technology Exposition. It is being reported that Baidu is now the official holder of the domain name registration record for hao123 despite the fact that Baidu has kept the issue decidedly low key and refused to disclose any details about it. Most domain name researchers are taking this as proof that the Chinese acquisition has been settled, and that Baidu will dominate not only Chinese web page searching but also web page browsing.

- Dangdang.com, China's largest online Chinese book retailer, is said to be regretting its decision to turn down Amazon's takeover bid hoping to get higher prices, after its rival, Joyo.com announced its merger with Amazon. Earlier in April, Amazon offered $150 million to buy a 70 to 90% stake in Dangdang. After four months of talks, the Chinese bookseller officially announced it was turning down the offer. They claimed the company needed an investor but not a buyout. Two weeks after the announcement and without the knowledge of Dangdang, Amazon bought Joyo with $75 million. But Dangdang was not optimistic about the union of Amazon and Joyo, and said the companies would need years to adjust to each other's very different management and operation styles. The company said it has stepped up plans to seek an initial public offering on the NASDAQ stock market in 2005, two years earlier than its original plan. Experts, however, are worried about Dangdang's future. An analyst said that unless it is able to get huge funds, Dangdang will lose to the competition. Market researcher IDC reported that Chinese consumers spent $4.8 billion in online shopping last year. The figure is expected to grow to $14.6 billion by 2005.

- Rumours are back once more in the Chinese media that Yahoo! has been having secret discussions with Sina about a possible merger, and that their negotiations are finally making some ground. Reports are saying that Yahoo! will incorporate Sina into its own fold, after which Sina would then take in Yahoo! China in return. The CEOs of each side, so far, have stated that they know nothing about this issue. It is, however, generally thought in the industry that such a merger is quite likely since the two sides are so complementary to each other. Yahoo! is mainly involved in searching, e-commerce, email and instant communications, while Sina emphasizes news and event reports. Both are also listed companies, which would make it easier for them to undergo the necessary capital procedures. Despite these factors, it is believed also that the two companies would face difficulties on the Chinese side. As Sina is very influential in spreading information, it is not known whether Chinese policy-makers will allow the incorporation.

- eBay's Chinese subsidiary Eachnet is considering launching a B2B trading site to challenge Alibaba' home territory after the latter launched it auction site, Taobao. An Eachnet official told the press that the company might expand its services to small and medium enterprises (SMEs). The cost of online trading is much lower than that of offline trading, which could be attractive to SMEs. Eachnet would be happy to provide such a platform for SMEs. Eachnet has never defined itself as strictly C2C portal.

Mobile / Wireless

- An independent supervision organization, the State Telecommunications Management Commission, is planned to supervise the country's telecommunications fee system. The China Academy of Telecommunications Research, under the Ministry of Information Industry, said that the telecom industry is in need of effective and efficient supervision as the sector is currently exposed to fierce competition and rampant price wars. The panel is being jointly established by the Ministry of Information Industry, the State-owned Assets Supervision and Administration Commission and the State Development Reform Commission.

- China Telecom will adopt a cautious approach to the introduction of its third-generation (3G) mobile network after it receives its license, a strategy that will greatly reduce its capital-expenditure budget. According to the company, its 3G capital expenditure will be substantially lower than the amount that the market is talking about, after its announcement of a 28.1% increase in adjusted first-half profit - to Rmb1.5 billion ($179 million)- from the 20 provinces in which the company operates. Industry watchers had speculated that China Telecom was facing a Rmb90 billion ($11 billion) bill to build a nationwide 3G network, using WCDMA technology.

- A mainland company formed to promote TD-SDCMA, the home-grown third-generation (3G) mobile-phone technology, is seeking additional funding amid lingering doubts about prospects for the standard. Royal Philips Electronics - which formed T3G Technology along with the mainland's Datang Telecom and South Korea's Samsung - says its it is confident the standard will be among those chosen when the central government issues 3G licenses, expected by the middle of next year. The central government has put off issuing 3G licenses, leading industry watchers to speculate the delay is to give TD-SDCMA time to develop. Philips had S$7.5 billion in mainland revenue last year, up from $6 billion in 2002.


Information Technology

- Hon Hai Precision Industry said it posted an 18% year-on-year rise in first half profit on the back of its strategy to increase outsourcing and cut costs. The company, one of the world's largest contract-manufacturers of information technology and communications products, reported net profit of NT$13.3 billion ($389 million), up from NT$11.3 billion ($333 million) a year ago. Sales rose 28% year-on-year to NT$174.3 billion ($5.1 billion). The company would continue its components, modules, moves and services (CMMS), strategy to increase outsourcing and upgrade competitiveness.

Hong Kong


- Several Hong Kong mobile operators are eyeing push-to-talk services but are reluctant to follow New World Mobility's lead until the industry adopts open standards that will allow competing handsets to communicate with each other. New World Mobility will be the first operator to launch the walkie-talkie service, which enables instant communication with the one or more users at the touch of a button. The company has chosen Nokia as its vendor and plans to introduce four handsets made by the Finnish phone maker in the third quarter. At present, Nokia handsets can talk only to other Nokia phones, raising concerns among operators who do not want to be locked into using a single vendor. Rival Motorola also provides push-to-talk technology, but on a different standard. The company expected the Open Mobile Alliance, a standards-setting group, to adopt a global push-to-talk technology by the fourth quarter next year.


Mobile / Wireless

- Frost & Sullivan says there is a growth potential in Singapore market for mobile technology. The development of mobile data applications in Singapore is still lagging behind but by the end of this year when 3G rolls our more advanced applications, multimedia downloads, location-based services and enterprise solutions will take off in Singapore. One challenge though is how to differentiate data offerings. All three service providers - SingTel, StarHub, and MobileOne - in Singapore are providing relatively similar mobile content application. Another is the heavy reliance on messaging applications rather than on entertainment apps.

- Indonesia's second-biggest telecommunications company Indosat announced a first-half net profit of $77 million, a 78.5% year-on-year rise, due to growth in its cell phone business. It said sales increased 30.7% to Rp5.1 trillion ($546.7 million), with the cellular business up 51% to Rp3.37 trillion ($363.4 million). The company said its mobile phone services attracted 1.4 million new subscribers during the first half, ending the period with 7.4 million users, up 70.6% from a year ago. According to Indosat official, the cellular sector had showed better than expected results and was now the company's main focus.

- Smart Communications, the largest mobile phone operator in the Philippines will enter a highly competitive Hong Kong market using a business model that many others have tried with little success. Smart will sell voice and text services as a mobile virtual network operator (MVNO), leasing capacity from CSL. It will target an estimated 180,000 Filipino workers in Hong Kong, 87% of whom already own a mobile phone. The Philippines operator is challenging conventional wisdom that Hong Kong's market is simply too tough for MVNOs to survive in. Virtual operators account for just 1% of all voice revenue.

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