A week in tech

Our weekly round-up of the key news in the technology sector.

A week in Japanese tech

Internet

- The Japanese government drafted revisions to its "e-Japan" programme promoting IT, with the changes emphasizing telecommunications deregulation and strengthening of copyright protection on content such as video images and music. The proposed revisions are aimed at promoting competition in sectors such as high-speed internet services and electronic commerce. The centrepiece of the measures will be deregulation of the telecom sector by reducing the red tape that hinders firms aiming to enter the telecom business.

- Softbank and McDonald's Co. (Japan) have formed an alliance in broadband Internet services. The alliance is expected to focus on installing Net access points via wireless LAN, operated by the Softbank group, at McDonald's 3,900 restaurants nationwide. Softbank, which already offers an ADSL Net access service called Yahoo BB, expects the partnership to increase subscribers to its Net access business. McDonald's hopes to attract more customers.

- The number of individual subscriber lines of Internet Protocol telephone services is expected to more than quadruple to 6.51 million by the end of 2005 from 1.58 million at the end of 2001, according to Yano Research Institute. Corporate users of IP telephone services will increase to 14,000 at the end of 2005 from 3,900 at the end of 2001. The ratio of individual IP users to all telephone users in Japan will rise from 3.1% currently to 12.8% by the end of 2005.

Mobile / Wireless

- KDDI regained second place in Japan's mobile phone market on the strength of its recently launched third generation service, overtaking Vodafone's J-Phone business by 5,000 subscribers in April, the first month of its launch. It said it had sold 330,000 phones for its new high-speed Internet access service in April, surpassing its own target of 280,000.

Telecommunications

- Tokyo Electric Power will expand its residential coverage of high-speed communications services, two years ahead of schedule in fiscal 2003. Japan's top power utility initially planned to expand its fiber-to-the-home network in stages to cover Tokyo's 23 wards by fiscal 2005.

- NTT West will introduce a low-priced high-speed communications service, using an optical fiber network with a capacity of 100mbps. A monthly charge for the service will be set at Y4,300, compared with 9,000 charged for the company's existing service. The move, following NTT EastÆs launch of a similar service for 5,800 yen a month, is intended to compete against the growing number of similar low-priced services offered by communications carriers affiliated with power utilities.

- Waseda University and NTT Comware have launched an organization to develop broadband infrastructure that connects Japanese universities with their overseas counterparts. The participants, which include NEC, IBM Japan and Matsushita Electric Industrial, will develop Internet systems to make it possible to give lectures to students overseas and hold joint seminars with universities in other countries.

Venture Capital/Public Markets

- Japan IPOs continue to rise. IPOs on the Jasdaq over-the-counter market, Nasdaq Japan Market and the Tokyo Stock Exchange's Mothers market are expected to reach a total of 150-160 in 2002, an increase from the 147 firms that listed on these markets last year, approaching or exceeding the 150 level for a third straight year. The high number of start-up IPOs in Japan is due in large part to the unique three-market structure that has encouraged competition between the markets, as well as the strong flow of venture capital into start-ups. Additionally, since Japan's Internet stock bubble was short-lived compared with the US and Europe, the reaction when it burst was relatively smaller.

- Mitsubishi has set up a Y20 billion fund to buy firms and invest in faltering companies. The trading house hopes to take advantage of the growing number of management buyouts aimed at firms undergoing restructurings, mergers and acquisitions. Mitsubishi's private equity investment arm MC Capital will operate the new fund.

A week in Korean tech

Hardware

- Hynix Semiconductor may hold discussions with investors other than Micron Technology Inc., South Korean Minister of Finance and Economy Jeon Yun-churl said. Last week, Hynix's board of directors vetoed a planned $3 billion sale of the company's core memory-chip assets to Micron.

Telecommunications

- The South Korean government will sell its entire 28.36% stake in KT Corp. in a final bid to privatize the country's largest telecommunication company. The government will offer 14.53% of KT's shares to various local investors. Of the amount, about 5.7% will be available to company employees, 2% will be placed with local institutions, 1.83% with individual investors, and 5% with an unnamed strategic alliance partner. The remaining stake will go to local investors in the form of exchangeable bonds.

- KTF has started offering mobile phone services that can carry high-speed multimedia video and data. Known as öCDMA 1X EV-DO (evolution data optimized),ö which can relay data at 2.4 megabits per second at its peak rate, the new technology was introduced for the first time. The service, which includes multimedia messaging, videoconferencing and other data communication services, is being offered in major cities in Korea.

A week in China tech

Internet

- Sina.com will consider acquisitions this year. Sina.com would look at making acquisitions in areas it was already involved in, rather than expanding into print and other traditional media, like Tom Group and America Online. Online ads accounted for 70.28% of the most recent quarter's revenue, while fee-based income was 27.3% of the total. Software sales accounted for the remainder.

Media, Entertainment and Gaming

- The first non-mainland company has secured rights to distribute a movie in ChinaÆs tightly controlled market. China Film Group said it has sold the rights to the American-made movie "Epicenter" to Shanghai Golden Harvest Media Management Co. It marks only the second time in half a century that state-owned China Film has loosened its monopoly on distributing foreign films. The deal allows Shanghai Golden Harvest to earn money only from fees paid by local distributors, not from the more lucrative arrangement of sharing box office revenues.

Mobile / Wireless

- Two Chinese companies in talks to take stakes in EricssonÆs joint ventures in China. Nanjing Panda Electronics and China Putian Information Industry are currently discussing with Ericsson taking stakes in the ventures as part of the Swedish company's restructuring of its Chinese operations. If the deals go through, Ericsson would be the biggest shareholder in the two ventures, though Nanjing Panda and China Putian's specific share allocations haven't been determined yet.

A week in Singapore tech

Mobile / Wireless

- SingTelÆs Asia-Pacific mobile subscriber base increased strongly in the first quarter of 2002 to cross the 22 million mark. Asia's fourth-largest telecom firm said that by March 31, the total number of subscribers at its ventures in Singapore, Australia, Thailand, India, the Philippines and Indonesia stood at 22.29 million » a rise of 13.8% compared with the December 2001 level.

Telecommunications

- Asia Global Crossing will take control of its StarHub joint venture. StarHub Crossing was set up in April 2000, and effectively gave Asia Global Crossing a landing partner in Singapore for its undersea cable network. Singapore's third-biggest mobile operator said both partner companies will continue to work together despite the cancellation of StarHub Crossing, the 50:50 joint venture.

 

A week in Taiwanese tech

Semiconductors

- Taiwan Semiconductor Manufacturing announced plans to double its capacity by 2006 to meet increasing demand for its products. The company plans to spend $2.6 billion this year, much of it to expand capacity that uses the most advanced technology. Taiwan Semiconductor also plans to invest more in advanced chip-assembly technology to ensure that process does not create a bottleneck during the production process.

A week in Hong Kong tech

Internet

- NetEase.com denied it would be acquired by China's No 1 mobile phone-set maker Ningbo Bird. The company had strengthened its cash position with net cash of $65 million and might consider a second listing in Hong Kong or China.

- NetScreen Technologies is expanding across Asia. Six months after its debut on Nasdaq, the company is challenging larger rivals Cisco Systems, Nokia, Nortel and Check Point Software in the region's fast-growing Internet security appliance market. Backed by new products and several alliances, NetScreen plans to generate more than half of its sales from Asia over the next few years. The Silicon Valley-based company was co-founded graduates of Tsinghua University in Beijing. NetScreen develops and sells scalable integrated security systems and appliances that combine firewalls, virtual private networks (VPNs), traffic management and other security functions into one box.

- Hutchison WhampoaÆs stationery arm claims to be Hong Kong's largest corporate office supplier after 21 months of operations. Chief executive Solomon To of bigboxx.com said the company had about 10% market share in a fragmented market estimated to be worth at least HK$3 billion last year. The stationery supplier is the only Internet business among the Hutchison e-Commerce portfolio heading for profitability.

Wireless/Mobile

- Hutchison Telecommunications is bringing the BlackBerry wireless e-mail service to Hong Kong and Macau, marking the Asian debut for the hand-held device three years after it hit the market in North America. Hutchison and Canada-based Research In Motion Ltd., BlackBerry's maker, touted the rollout as a deal that could give them both access to new segments of the wireless market, even possibly in China.

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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