A week in tech

A round-up of all the latest tech news.



- Goldman Sachs announced that it would invest 25 billion yen ($219.4 million) in a new mobile service that eAccess plans to launch next year in Japan. A firm that wholesales broadband service to companies like KDDI Corp., eAccess is seen as one of the firms that will be awarded a mobile license by the Japanese government. The license is expected to be given later this year. With this move, Goldman becomes the second-largest investor in the mobile service after eAccess. It joins Carlyle Group, which acquired with Kyocera Corp. last year telecom service provider Willcom Inc., in the telecoms business. The investment brings eAccess closer to achieving the fund worth 100 billion yen ($878 million) that it aims to raise.


- The Ministry of Internal Affairs and Communications said it would introduce low-cost telecommunications service that would enable cellular phones to double as cordless handsets for fixed-line phones by the end of fiscal 2007. Leading to this technology, the ministry said it has decided to unify the phone numbers for both types of phone. The service is expected to drastically reduce cell phone fees by allowing users to communicate by way of fixed lines when at home or at work. In a separate report, Vodafone KK and Japan Telecom Co. said they have entered into negotiations to offer a service to corporations in which cellular phones can double as cordless handsets for fixed-line phones when users are indoors.


- Sanyo Electric announced its plans to downsize its consumer products semiconductor businesses and focus more on what it considered to be profitable operations. The company's net loss in the year to March is expected to widen to 200 billion yen ($1.7 billion), which is twice the firm's forecast of 92 billion yen ($810 million), figures that are ascribed to inventory valuation losses and the increase planned job cuts. Japan's third-largest consumer electronics maker said it would cut 15 percent of its global workforce, shutter plants and diminish its debt by half in a restructuring plan aimed at bringing it back to profit. The report said Sanyo would concentrate its resources into profitable operations such as battery and industrial equipment divisions and scale down audiovisual equipment and white goods segments.

- Sony was placed on review by Moody Investors Service, with the firm citing doubts about the troubled electronics company. The review is saying that Sony's mid-term business plan would not work to regain the strong profit and cash flow generation patterns. Moody stated that analysts were not generally impressed by the plan, underscoring its lack of vision or creativity.

- Meiji Electric Industries, a wholesaler of factory automation equipment, announced its plans to go public on the JASDAQ Securities Exchange. The Nagoya-based company relies on the Toyota Motor Corp. group for some 40 percent of its sales. For the current year through March, Meiji Electric expects to post a group pretax profit of 1.7 billion yen ($15.6 million), a 23 percent increase brought about by strong sales of equipment and the increasing sales of high-value-added systems. The company predicts its sales to rise 10 percent to 52.1 billion yen ($459 million), which the company is ascribing to the 30 percent increase in business with the Toyota group. It expects to raise 1.7 billion ($15.6 million) in the IPO, with 1.2 billion yen ($10.5 million) to be set aside for the repayment of its debt.

- Sakura Internet, an Osaka-based firm that offers maintenance services for Internet-linked server computers, announced its plans to go public on the Tokyo Stock Exchange's Mothers market for start-up companies. Sakura, aside from renting out inexpensive servers, also provides a "housing service", which provides a data center rented out so that its clients can have space required for their Internet access communication lines among other things. This service accounts for about 30 percent of the company's total sales. Sakura expects 190 million yen ($1.6 million) in pretax profit, a 44 percent increase from a year earlier, in the current fiscal year ending March 2006, on sales totaling 2.6 billion yen ($23 million).

Information Technology

- Corporate investment in information technology is likely to rise in fiscal 2006 as more companies increase their capital spending from fiscal 2005 levels, according to Yano Research Institute. The survey said that 44.3 percent of firms have kept their IT spending flat in fiscal 2006 compared with fiscal 2004. Firms project 39.2 percent in fiscal 2006, compared with the 35 percent deciding to leave IT spending as it is. Maintenance and upkeep of existing system accounts for 52 percent of IT spending in fiscal 2005. Investment in new systems contributes about 31.1 percent in fiscal 2005. The research firm said that many companies are looking to improve business efficiency, raise productivity and boost sales efforts by making changes in their existing systems.


- Six medium-tier information technology firms announced their plan to outsource software development to China. The companies, which include Softbrain, TDC Software Engineering and Daiwa Securities Group affiliate Denko Denshi Tsushin, said they aim to surmount the financial and technological difficulties faced by smaller companies if they outsourced development overseas work on their own. The labour costs of Chinese software engineers are one-third or less than those of their Japanese counterparts, which make the total cost of software development in China at least 50 percent more economical.



- VK Corp, a South Korean mobile handset maker, said it has agreed with a North Korean company on a partnership that will jointly develop software for mobile phones. Under the agreement, Samcholli Technical Co. said it would send research engineers to VK's Beijing-based laboratory for two years to work on the development of Korean-language software for global system for mobile communication (GSM) handsets.

- South Korea's Ministry of Information and Communication said it gave a consortium called KMMB the sixth license for land-based digital television service on mobile phones. The ministry said it granted a terrestrial digital multimedia-broadcasting (T-DMB) license to KMMB, a consortium of some 30 small- and medium-sized equipment manufacturers and digital content providers.



- Dubai Internet City (DIC) has set up an office in China, a move that is part of its plan to expand aggressively in international markets. The company said that the office in China is there primarily to support DIC tenants in the expansion of their businesses in China, while at the same time serving as a marketing window to attract investment in Dubai. DIC described its plan as an ambitious global plan that will see Dubai's hi-tech free zone setting up business and marketing support centers in various parts of the world.

- China Mobile and Shanghai Media Group announced their partnership, which would allow the feeding of television content over mobile phones. The service will be delivered through China Mobile's 2.5-generation, GPRS-based data and multimedia platform called Monternet. The agreement would make China Mobile the country's first mobile operator to offer an Internet television service. After China Telecom, China Mobile is also the second telecommunications operator to team up with Shanghai Media.

- The new rules aimed at "improving regulation" over the news posted on the Internet were released under the Internet News Information Service Management Rules. The new rules stipulate, among other things, that organizations posting news and information on the Internet must not touched on certain areas. Eleven in all, these areas include news that would endanger state security, state secrets that have not been declassified, or reports that caused ethnic violence. Included in the "forbidden zones" are news challenging the state's religious policies, or those that preach cultist or superstitious beliefs. Under the new rules, Chinese firms are banned from engaging in joint Internet publishing ventures or partnerships with foreign organizations.

- Bokee announced that it has raised over $10 million from four global venture capital firms, in what is considered to be the largest investment to date in this sector. The investors are some of the biggest and successful names of Internet venture capital: Softbank Asia Infrastructure Fund (SAIF), the leading Chinese private equity firm that also funded Shanda; Granite Global Ventures, which funded Alibaba and Hurray!; Mobius Ventures, which funded Yahoo! Japan as well Technorati and Feedburner, two blog-related companies; and Bessemer Venture Partners, the institutional investor behind Verisign and Skype. Bokee is the largest and fastest-growing service provider in China. It has more than 2.5 million bloggers.


- China Mobile has awarded Nortel Networks of Canada $150 million worth of contracts this year for the expansion of its digital wireless network in six regions. With the expansion, China Mobile's network would see an increase in its subscriber's capacity by 3.4 million to a total of about 18 million. Nortel has already deployed wireless networks in 17 of China's 31 provinces and municipalities.


- Microsoft and International Finance Corp (IFC) announced their investment of a combined $35 million in Chinasoft International. Following the signing of the investment agreements separately with the two companies, Chinasoft said it expects to boost its outsourcing orders from Microsoft from $1.2 million this year to $5 million. Chinasoft reported revenues of 22.4 million yuan ($2.7 million) from its outsourcing services in this year's first half. From its software solution provision, the company generated revenues of 136.1 million yuan ($16.8 million).


- Lenovo Group announced the speeding up of consolidation with IBM's PC business and the setting up of a unit in India. In the first stage of its consolidation process, Lenovo Group's original business and the former IBM business were running separately under the names of Lenovo China and Lenovo International to lessen the confusion that drastic changes would bring upon customers and the organization of the company. Lenovo said it would build unified management platform for product design and development, supply chain and sales. The computer giant said it would reorganize its regional organization and set up five regional headquarters. Aside from existing bases in the United States, Europe, Middle East, Africa and the Asia Pacific region, Lenovo revealed it will set up a China regional unit, a result of the consolidation of Lenovo China and Lenovo International.


- Huawei Technologies announced the signing of a commercial contract valued at $30 million with mobile operator AZ Communication Company Ltd (AZCOM) of Cambodia. Under the contract, Huawei will provide and install on CDMA equipment the transmission and supporting systems for AZCOM CDMA 2000 1X project. This will enable AZ Communications to build the first phase of its new CDMA mobile and business wireless in Cambodia. Aside from being the biggest supply contract ever entered into by Huawei in Cambodia, the contract is also the largest single supply contract for CDMA 2000 1X technologies. The Shenzhen-based Huawei Technologies specializes in the research and development and customization of network solutions in fixed, mobile, optical and data communications networks.


- The Shanghai Science and Technology Investment Corporation (SSTI) announced the establishment of the first Israel-China venture capital fund. According to the Ministry of Industry, Trade and Labour of Israel, China has been declared as one of four preferential export markets for Israel and said the venture is an "excellent tool" for consolidating Israeli business ties in China. SSTI, China's first state-owned venture capital company, has invested in some 40 Chinese companies to date. Together with Polar Communications Ltd. and Israeli entrepreneurs, SSTI founded the Israel-China venture capital fund, which is expected to have up to $100 million. The group disclosed that two acquisitions worth $10 million are already on their first phase of planning. The fund will concentrate on the acquisition of Chinese biotechnology and telecommunications enterprises and companies, targeting those that are medium-sized and export-oriented.



- Infineon Technologies of Germany and its partner, Nanya Technology of Taiwan, announced their plan to list their joint venture, Inotera Memories, on the Taipei Stock Exchange. According to the two companies, the proceeds from the initial public offering would be used for the building of a second production plant for the company, which makes computer chips. The Munich-based Infineon did not give out details of the planned IPO.

Hong Kong

Media, Gaming and Entertainment

- SEEC Media Group said it is about to complete an agreement that will allow it to launch mainland editions of Time's People magazine and Sports Illustrated. The deal, expected to be realized by the end of the year, marks the first time the American media giant has awarded the license for the operation of its magazines to a third party outside the US. Under mainland regulations, foreign companies are not allowed to publish and sell their titles in China. The law allows them only to partner with mainland publishers and participate only in circulation and advertising-related functions. The mainland partner is the one responsible for editorial operations. SEEC Media is the owner of financial magazines Caijing, Financial Weekly, Securities Weekly, New Real Estate and Successful Marketing.

- i-Cable Communications said it has cut its subscription rates by almost half, with the new subscription plans allowing users to select from mini packages priced between HK$120 ($15.4) and HK$160 ($20.6) a month, instead of the HK$308 ($39.7) price tag on a package that had nearly 100 channels. Hong Kong's biggest pay-television company said it has reorganized its programme line-up with an offering of more than 20 mini-packages, featuring news, movies, entertainment and exclusive coverage of English Premier League football. The new packaging is aimed at competing with Now Broadband TV's pay per channel pricing mechanism.

- Ruili Holdings disclosed its investment plan of more than HK$10 million ($1.2 million) to be earmarked for the production of 30 digital movies each year. The move is aimed at responding to the threat of internet downloads that have affected the local film industry. The use of digital media is seen as one way of avoiding the piracy issue, with movies stored on the hard disk and can be sent via satellite or broadband with a protective encryption code for each cinema. Digital movies can be distributed also through all channels such as cinema, television stations and mobile phones, which can generate more income without the additional cost.



- Genesis Microchip, an acknowledged world leader in the development of image processing technologies for flat panel monitors, TVs and other consumer display products, announced the opening of its newest office in Singapore. The office is strategically located in Singapore's International Business Park, which is in close proximity to important customers like Dell, Philips, TTE, Toshiba and other major world OEM subsidiaries located in the South Asia region. Genesis system on-a-chip solutions are used worldwide by display manufacturers to produce visibly better images in devices like flat-panel displays, digital TVs, projectors and DVD players/recorders.

- Indonesian private television station ANTV announced the deal it struck with premier Asian television network Star TV. Under the deal, Star TV, a Hong Kong-based satellite and cable operator, will buy 20 percent of the national network of Indonesia. ANTV will retain control of 80 percent of the shares. The cooperation between ANTV and Star TV is expected to improve the Indonesian network's broadcasting capacity, human resources quality, and technology and business development through the use of the funds it will receive. For Star TV, the deal will give it a stronger foothold in Asia's third most populous country.

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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