A week in tech

A round-up of all the latest tech news.

Japan

Mobile/Wireless

- KDDI has received an order from Hitachi Communication Technologies for an office-use phone extension system that utilizes 3G cellular phone handsets. The system is to be made of around 1,000 handsets, indoor antenna units, communications equipment and other components. For a monthly fee of 897 yen ($9) per handset, users will be able to place calls and receive calls from other phones in the system for free while within the signal area. Once outside, the handsets will function as normal cell phones, with fees charged for each call. In another development, KDDI will start marketing a cell-phone based diagnosis system for cerebral infraction, given that it is important to provide proper treatment within two to three hours after a person has a stroke. The new system immediately sends diagnostic images of patients to the cell phones of neurosurgeons, located away from their hospital, via KDDI's high-speed data transmission service.

Internet

- Cybird has set its group pretax profit target at 7.2 billion yen ($70 million) for the year ending March 2008, up more than tenfold from the projection for the current fiscal year through March 2005, in its three-year plan released. To achieve the goal, the mobile phone content provider intends to expand its Internet-related businesses such as e-mail advertisements and online shopping. But the plan includes some businesses in which Cybird has little experience and some securities analysts believe there are many uncertainties involved in the plan. For the year through March 2008, revenue is targeted to reach 60 billion yen ($583.3 million), a 380 percent increase from the estimate for the current fiscal year. In addition to the two mainstay businesses, mobile phone content distribution and advertising, the company intends to expand its services related to Edy e-money system. According to analysts, the company has to formulate more credible, detailed programs to convince the market.

Software

- Connect Technologies plans to develop monitoring software for IP (Internet protocol) telephone networks based on a U.S. firm's patented algorithms. The Tokyo-based developer of mobile-phone related software will pay around 450 million yen ($4.3 million) to acquire assets such as patents and trademarks from Winnow Technology. These assets, as well as engineers, will then be transferred to a wholly owned Connect Technologies subsidiary that will be set up. This unit, Winnow Technologies will be capitalized at 150 million yen ($1.4 million) and is slated to begin operating in January. The subsidiary is expected to develop software that efficiently sifts through massive network data traffic, detects eavesdropping, and removes viruses and obstructing data. The product will also manage billing information. The unit will license the software to telecommunications companies and communications equipment makers. It is expected to record sales of 3 billion yen ($29.1 million) and a pretax profit of 600 million yen ($5.8 million) in 2007.

Hardware

- P&P a temporary staffing firm that sends salespeople to volume retailers of consumer electronics on behalf of manufacturers, will list on JASDAQ. Personnel dispatched by the company handle the sale of a wide range of products, including digital home appliances, mobile phones and cameras. In addition to selling products, they also report sales and inventory data to corporate customers once a week as well as other information, such as planned opening of new shops in the neighborhood where they work. P&P forecasts a 7 percent rise in parent-only pretax profit to 290 million yen ($2.8 million) for the year through March 2005, on a 26 percent jump in sales to 4.6 billion yen ($45 million). It plans to launch a new service using a temp staff agency specializing in IT engineers that P&P acquired last year. Initial public offering is 1,000 shares with secondary sales of 1,000 shares.

Telecommunications

- Japan Telecom, a fixed-line telephone service of Softbank Corp. said it has cut calling charges for its discount fixed-line phone service. The move follows rival KDDI Corp.'s announcement that it plans to slash calling charges for customers who have designated the operator as their preferred telecom provider. The company said it will charge 7.9 yen ($0.07) for three minutes for users calling other codes in the same prefecture that have signed up for its residential fixed-line services by February 2005. For calls to other prefectures, it will charge 14.9 yen ($0.1) for the same duration. Both offers will be valid for three years. Japan Telecom's new rates undercut both KDDI and Nippon Telegraph & Telephone's existing offers. If KDDI or NTT further cut their charges by February, Japan Telecom said it will offer its customers equivalent or cheaper rates.

- KDDI is strengthening its outsourcing business in a bid to attract more business and boost revenue. The firm recently merged telemarketing subsidiary KDDI Telemarketing subsidiary KDDI Telemarketing Inc. with KDDI Sogo Service Co., which has handled the building management and insurance agent businesses. The merged entity will be positioned as a strategic subsidiary. The aim is to create a structure that can subcontract a broad range of work, such as facilities management and corporate call center operations. Using the former KDDI Sogo Service's expertise in the insurance and travel businesses, the company expects to attract more call center work from financial institutions. By fiscal 2006, the aim is to raise total sales to 30 billion yen ($291 million), up 70 percent from the current fiscal year.

- Nippon Telegraph & Telephone (NTT), Japan's largest phone company, plans to buy back as much as 458 billion yen ($34.7 billion) of its shares, allowing the government to cut its stake as it raises funds to plug a deficit. NTT, which is 46 percent owned by the Ministry of Finance, would buy back as many as one million of its own shares, or a 6.3 percent stake. The ministry said it planned to sell as many as 800,000 shares in the company. The government is pursuing its first NTT sale in four years through a buyback to reduce the impact on the stock market. A sale of 800,000 shares would reduce the ministry's stake in NTT to 40.8 percent.

Media, Entertainment and Gaming

- Konami, Namco and three other video game producers saw their profits decline in the fiscal half due to lackluster software sales in the dwindling domestic market. Of the seven major game software producers, only Square Enix Co. and Taito Corp. posted higher pretax profits, Konami's pretax profit dropped 48 percent to 11.5 billion yen ($112 million), while Namco's also fell 48 percent to 4.2 billion yen ($41 million). Similarly, Capcom Co., Koei Co. and Tecmo Ltd. all booked profit decreases. The poor showings were attributed mainly to weaknesses in their core software businesses, a clear indication that the Japanese market is shrinking. Square Enix managed to lift its profit on the strength of its highly profitable online gaming business and content distribution to mobile phones. Taito meanwhile pushed up its profit through robust sales of arcade game and karaoke machines. And Konami's sports gym and overseas casino-related business showed gains. For the full year, all except Konami project higher profits and sales. But they are all expected to invest heavily in software development, which will depress their margins for the time being.

- Nintendo Co. said its profits surged in the latest fiscal half, as a stronger dollar during the period boosted its foreign exchange-related gains. Nintendo, the creator of popular game characters such as "Pokemon" and "Super Mario," said group net profit in the April-September period came to 46.4 billion yen ($451.1 million), reversing the year-earlier loss of 2.8 billion ($27.2 million). The company, which began sales of its new portable player the "Nintendo DS" in the US, also boosted its full-year profit forecast due to brisk demand for the dual-screen handheld game machine ahead of the Christmas shopping season. Nintendo reported net income of 79.2 billion yen ($769 million) in the six months ended Sept. 30, reversing a loss of 5.8 billion yen ($56.7 million). Its sales fell 11.1 percent to 188 billion yen ($1.8 billion).

Korea

Mobile/Wireless

- LG Telecom, the smallest of Korea's three mobile phone operators, said that it has reached a settlement with music industry groups in a dispute over MP3 mobile phone sales. LG said the settlement was reached with three music industry groups, including the Music Industry Association of Korea, the Seoul-based lobby group that represents major labels. The mobile phone carrier said that it would sign similar settlements with two other music-related organizations. Under the deal, LG Telecom subscribers would be able download copyrighted songs from third-party music web sites. The service will be offered free of charge to consumers until the end of June next year.

Internet

- Dacom Corp is considering minting a partnership with Citigroup Financial Products to acquire troubled internet service provider Thrunet. Should it go through, the move changes the three-way bidding race for Thrunet into a showdown between Dacom, the long-distance and broadband internet unit of LG Group, and fixed-line telephony operator Hanarotelecom. Before Citigroup's late entry, industry analysts estimated the Thrunet deal would fetch 400 billion won ($383 million) to 500 billion won ($477 million). Thrunet, which is under court receivership, is the third-largest broadband internet operator in Korea with 1.2 million customers and a 10.9% market share as of October.

Hardware

- LG Electronics will focus its plasma-display-panel business on the United States and Europe to become the No. 1 player in the world by 2006, according to a company statement. The company is aiming at 30 percent market share in PDP modules by 2005 and the world top spot in PDP televisions by 2006 with a 20 percent share. The global PDP television market is estimated at 3.5 million units for this year but is expected to almost double to 6.2 million next year and break through 10 million in 2006. LG is currently the second player in the PDP television market after Samsung SDI, with Japan's Matsushita Electric Industrial, in the third place.

China

Software

- AsiaInfo Holdings, Inc., a leading provider of software, solutions and services to telecom operators and enterprises in China, announced that its Board of Directors has authorized a stock repurchase program under which AsiaInfo may repurchase up to 5,000,000 shares, or approximately 11 percent, of is outstanding common stock. AsiaInfo Holdings, Inc. is a leading provider of high-quality software and customer solutions to some of China's largest enterprises as well as many small and medium sized companies in China. AsiaInfo became a leading provider of enterprise solutions in China with the acquisition of Lenovo's non-telecom related IT services business in 2004.

- Mobile value added service provider Sichuan Yingda has selected CPs's Matrix high accuracy location system to drive its enterprise location-based services on China Unicom's network. The commercial agreement will see the Matrix solution used to locate and track vehicles, security personnel and other assets. Sichuan Yingda Technology specializes in wireless Internet services, products and integration. It has recently been selected for a High Tech Enterprise Award by the Chinese government. The company will initially target corporate markets with their location service portfolio. Initial rollout will be in the first quarter of 2005.

- DF China Technology, a leading provider of information technology solutions for logistics and supply chain management industry, announced that reported financial results for the fiscal year ended March 31, 2004. The company reported revenues of US$530,000, and a net profit of US$4.4 million. As of March 31, 2004, DF China Technology posted total assets of US$4.7 million. The company partners strategically with some of the world's most famous enterprises, including IBM, General Electric, Oracle, Hewlett-Packard, Dell, Motorola and China Mobile (Hong Kong) Ltd.

Internet

- Intermost Corporations, a company that focuses on the private equity exchange business and the internet services in China, announced a net profit of $85,973 for the quarter ended September 30, 2004, versus a net loss of $215,738 for the comparable period in 2003. Gross revenue increased 356 percent to $1.9 million. This is the first time in its corporate history that the company has reported a net profit. In collaboration with its strategic partners, Intermost aims to enhance the services to members of the ‘exchanges' with the provision of an electronic trading and information platform and other value-added services like multi-function cards.

- Fueled by massive growth in massive growth in residential broadband demand, China has catapulted past more established western markets to become the world's top spot for ethernet services, according to a new study released by Harvey Reading, the market research division of Light Reading Inc. With 30 million broadband households as of June 2004, China is now the world's biggest broadband market by subscriber count, according to the report. China's service providers are aggressively using the Ethernet to target the residential market - a strategy that has yet to catch on in western markets. FTTX is emerging as the primary broadband access technology in China's urban markets. The emphasis on fiber-based access is not surprising, given that China's cities are dominated by large blocks of new apartment buildings. Most Chinese cities are also well supplied with fiber in the core that can be extended out to these residential blocks.

Mobile/Wireless

- Motorola, the world's second-largest handset maker, aims to regain its lead in the Chinese market by introducing a series of new handsets soon targeting a cross-section of customers. The effort is made as part of its global effort to consolidate its market share and get a better position while fighting rivals such as Nokia, Sony Ericsson, Samsung and LG. Available through the Vodafone Live! and HutchisonWhampoa 3G network, the handsets all offer lighter, compact designs, improved battery life and rich camera quality maintaining picture-perfect large screens. Both Vodafone and Hutchison Whampoa will offer the Motorola E1000. Vodafone will also offer exclusively the Motorola V980 and C980. Many international handset vendors such as Motorola and Nokia are regaining strong momentum in the domestic market by launching new products and lowering handsets prices. Motorola, according to the statement, currently has no intention to conduct mergers or acquisitions with domestic handset makers.

- Vyyo, a global supplier of end-to-end wireless and cable broadband solutions announced that China Mobile has chosen to expand its deployment of Vyyo's solution for cellular and Wi-Fi backhaul, in eight cities in the Jiangsu province. China Mobile is deploying Vyyo's V3000 dual bus solution. This platform provides wireless E1 and IP links that connect cellular and Wi-Fi base useful in dense cellular environment in a major city or in places where wired infrastructure is non existent or expensive to deploy. Jiangsu is a densely populated province with a population of over 70 million.

- China Unicom, the country's second-largest mobile carrier, is talking with CTM, Macao's leading telecommunications service provider, about a potential purchase plan. It was reported that China Unicom has already received permission from regulators to take over 49 percent shares of CTM and negotiations will start shortly. CTM is a joint venture with Cable and Wireless PLC, Portugal Telecom International, CITIC Pacific Ltd and Macao SAR Government. Meanwhile, China Unicom is likely to contact Cable and Wireless PLC, which commands 51 percent of the company's stake. Portugal Telecom International and CITIC Pacific occupy 28 percent and 20 percent, respectively. As a total solutions provider, CTM delivers a wide range of business solutions and technologies. The company has so far signed up more than 370,000 subscribers for fixed-line and mobile telephones. Its annual profit stands at $400 million.

- China Mobile, the country's largest cellular operator, is pondering even tighter control over mobile service providers (SPs). That would create an even bigger challenge for SPs, which have seen their revenues decline in recent months. China Mobile is considering changing its revenue-sharing scheme with SPs, industry insiders said. China Mobile usually takes 20 percent from the revenues generated from SMS (short messaging service) sent via web portals. SPs keep the remaining revenues. China Mobile launched in August a new subsidiary, Aspire Information, which specializes in data service. Industry source said China Mobile hopes to build Aspire Information into a "super" SP that can be merged with smaller SPs.

- An agreement described as the new SMS Inter-link Settlement Agreement has been signed finally by China Mobile, China Netcom, China Telecom, and China Unicom. Expected to take effect early this year, this interoperability agreement had its signing delayed due to differences that were technical in nature and agreements that the parties had internally. The new agreement will enable normal GSM phone users to send short messages (SMS) to Little Smart phone users. Service is expected in China's other provinces (Northern provinces that belong to China's Netcom's area have already started testing) by the end of 2004.

- The number of Chinese handset users exceeded 320 million at the end of October 2004. According to the latest statistics released by the Ministry of Information Industry (MII), the number of Chinese handset users increased by 5.5 million on average of every month from January to October 2004. At the end of October, China had 24.8 handsets for every hundred people. From January to October 2004, 176 billion messages were sent, a year on year growth of 62 percent. The number of fixed-line phone users in China exceeded 310 million by the end of October, an increase of 47.9 million since the end of last year. In another report from Beijing-based research firm Analysys International, China's mobile phone market, described as having experienced an unexpected tumble in the year's second quarter, is said to be back on track. In the year's third quarter, 17.5 million handsets were sold in China, up 10.8 percent compared to the previous quarter, the report said. That number included 15 million GSM phones and 2.4 million CDMA phones.

Information Technology

- Nokia has won the contract to supply the radio communication network for the Ji'nan International Airport in the Shandong province of China. The system will be the first of its kind in the Chinese aviation industry, and it will provide the airport personnel with seamless Nokia, TETRA voice and data services. Around two million passengers travel through the airport each year, and the Nokia TETRA system will vastly improve the airport staff communications, further improving the high-quality of passenger services and personal safety. The deal will see Nokia provide a complete range of digital TETRA professional mobile radio solutions, including Nokia base stations, dispatcher workstations and a large number of Nokia TETRA terminals. Nokia will also provide project implementation and training services.

- Digital China Holdings, a spin-off of China's top PC maker Legend Group, announced its interim net profit had soared by 205.5 percent. The company posted a net profit of HK$95.2 million ($12.2 million) for the six months ended September 30, compared to a net loss of HK$91 million ($11.7 million) for the previous corresponding period. Digital China's turnover was HK$7.6 billion ($974 million) in the first half of the fiscal year, an 8.2 percent jump year-on-year. According to the group, 56 percent of its turnover came from its general IT product distribution business, which recorded HK$4.3 billion ($547.2 million), up 6.38 percent year-on-year. The key growth drivers are consumer IT products, data projectors, desktop computers and accessories. An official noted that since 30 percent of the group's turnover comes from the systems business, the core capabilities of the business were shifting from being product-oriented to service-oriented in order to enhance the company's competitiveness.

Media, Entertainment and Gaming

- Kingsoft, a leading software developer, has selected Junnet as the general distributor of pre-paid gaming cards for Kingsoft's "JX Online" online games in China. Junnet will pay Kingsoft 60 million yuan ($7.2 million) for the right to distribute pre-paid gaming cards for Kingsoft's two online games beginning in 2005 for a period of one year. Federal Software, which is the current distributor of the pre-paid gaming cards, paid 40 million yuan ($4.8 million) in 2003. Kingsoft's distribution agreement with Federal Software will expire this December. At present, Kingsoft's first self-developed online game has approximately 200,000 peak users.

- Thomson said it is teaming with Chinese television and mobile phone manufacturer Konka in hopes of strengthening the position of its displays business in the growing Chinese market. As part of an agreement between the companies, Thomson will acquire an 8 percent stake in Konka, part of which is subject to approval by the relevant Chinese authorities. Financial terms were not disclosed. Thomson said it is also in discussion with other companies to develop industrial and financial partnerships for its display-related activities.

- Tian Tian Online, a subsidiary of China Netcom and Sun Media's 365 Multimedia Holdings Limited, will cooperate in launching a new interactive broadband TV call-in-show entitled "For the Ladies". This new interactive TV show will be broadcast via China Netcom's broadband network and will initially target the operator's broadband subscribers. The show will first focus on subscribers in Northern China, as China Netcom has already a large number of users in the region. The first 3-5 months of broadcast will act as a trial operations period for the show, during which Tian Tian Online and Sun 365 Multimedia will evaluate the project. During this period, viewers will be able to participate free of charge. Once, the trial is over, viewers will be charged services fee for every messages or questions they send in.

- A Chinese television operator in the province of Shandong is preparing a landmark initial public offering in a trial opening for new levels of private and foreign investment in the fast-growing television sector. The planned domestic listing by Shandong TV-net Media Development is the first approved by media regulators for venture directly operating television channels, a business traditionally tightly controlled by the State. Shandong TV-net has the right to run three local channels' scheduling, purchasing, production and advertising. Legal ownership of the channels and responsibility for approving content remains with its parent, the state-run provincial broadcaster.

- Sony Pictures has set up a joint venture television and film co-production unit in China, taking advantage of a loosening of restrictions on the tightly controlled industry. The joint venture with Hua Long Film Digital Production Co., of the state-run China Film Group, which holds a majority stake, has full approval from Chinese regulators, Sony Pictures Television International said in a statement. For the very first time, a Hollywood Studio will be producing television programming specifically for the PRC and global audiences, an official of the China Film Group said. China's media watchdog, the State Administration of Radio, Film and Television, and the Ministry of Commerce gave the go-ahead for the joint venture, to be called Huaso Film/Television Digital Production Co.

- Shanda's stock jumped over ten percent when rumors resurfaced that the gaming company had signed a letter of intent regarding the purchase of China operating rights to Dungeons and Dragons (D&D) Online from Turbine Games. In Shanda's second quarter conference call, an official said the company was negotiating for the Chinese operating rights to a famous MMORPG. Due to the lack of high-profile upcoming online games that had yet to be licensed in China, it had been speculated that the game is D&D. Licensing the still to be completed U.S. MMORPG would be an interesting move, industry insiders say, considering the failure in China of another very popular game in the west, Everquest.

- The9 announced the launch of "World of Warcraft" (WoW) in China. The company said that internal testing of WoW would be launched in the first quarter of next year. The success of WoW will be critical to The9, which has depended on Mu, for all its revenue for a year now. Although the company has a Taiwanese MMORPG, Mystina Online, in testing, WoW, according to analysts, could make or break the Shanghai-based company. According to a statement from Blizzard Entertainment, the World of Warcraft has become an instant success, achieving epic sales figures, with over 200,000 players alone creating accounts in the first day alone in the U.S.

- NC-Sina's Lineage II continued to show strong results in its second week of charging. Over three million players' accounts have been registered already. Sina watchers have been monitoring the game's performance closely, interested to see how the game does after the flop of Lineage I, which was also under Sina's operation. Sina's stock rose 4.1 percent on the Lineage news.

- Tom Online's parent company, Tom Group, saw its fortunes rise and fall as it announced that the company was bidding for a 49 percent share of Shanghai Xinhua Publications Group. A real estate company, Greenland Group beat out Tom in the bidding. This was Tom's third attempt to purchase a share in the regional branch of China's central publishing company. Tom Group bought a 9 percent stake in Jiangxi Xinhua Bookstore in August, and in late October the company ended negotiations with Chongqing Xinhua Bookstore when it failed to secure a majority position.

- Tencent Holdings planned to focus on game offerings and diversify into the Internet auction market to strengthen profitability next year. The Shenzhen-based company hoped to roll out at least one new "casual" online game each month, a mid-sized game such as Monopoly every three months, and one full-sized role-playing game in the final quarter of next year. Tencent, which operates the instant-messaging service QQ, has attracted 930,000 concurrent users to its game portal QQ game. Tencent recently acquired the country's first license to offer radio broadcasting services over the Internet. Users can now listen to Guangdong Radio on the QQ portal.

Semiconductors

- Grace Semiconductor Manufacturing Corp. has landed an additional $90 million in funding. The money comes from investment agreements it has entered with Cheung Kong Holdings and Hutchison Whampoa, in which the two will subscribe shares in Grace. The fund follows strategic investments by flash memory player Silicon Storage Technology Inc., which has put $50 million into the Shanghai-based company since 2001. The infusion will also help Grace combat its chief competitor, Semiconductor Manufacturing International Corp. Grace said it plans to put the funds toward the purchase of additional equipment and R&D.

- Agilent Technologies, one the world's leading providers of semiconductor components, is strengthening its supply bases in China, in the belief that the global semiconductor industry will regain its vitality. Agilent established in February a semiconductor products solutions center and trading subsidiary in Shanghai. The firm is expected to invest $100 million in China over the next four years. The investment will be used to expand Agilent SPG's manufacturing capacity, supply chains, infrastructure and research and development. Agilent SPG has begun searching for more business opportunities involving Chinese companies, rather than simply selling its products to international giants in China.

Taiwan

Internet

- Seednet, one of Taiwan's leading Internet service providers, rolled out bonus packages tied to its "Wagaly Family" (You and Me) Voice Over Internet Protocol Service. The first package involved the purchase of ISP's Wagaly Phone or Internet handset. By hooking up the phone to their notebook PCs, subscribers would be able to make overseas call to at least 10 countries including the U.S., Canada, China, Hong Kong, Japan, South Korea, and the United Kingdom at friendly rates. Designed for the home, Wagaly Talk employs an Internet box that converts a regular phone into an Internet phone. Subscribers who spend a certain amount on their phone bills can get fat discounts on their ADLS monthly fees, said the company.

Media, Entertainment and Gaming

- It has been described as looking like Napster and working like Napster, but Taiwan's Kuro peer-to-peer (P2P) service is said to have something that Napster never had - profit. That profit angers Taiwan's music industry, which has launched another salvo at the popular but legally dubious file-sharing service. The industry groups claim that Kuro has gone past merely acting as the passive middle-man to actively ripping and uploading songs from CDs to its network. Kuro also provides a range of content on its website. Industry observers say Kuro is making a very high margin on its operation, while it claims to spend a lot on staff and research and development.

Telecommunications

- Cisco Systems has signed a memorandum of understanding with Chungwa Telecom Co. Ltd. to expand the delivery and adoption of IP-based managed network services in Taiwan. As part of the agreement, Chungwa Telecom will base its new managed network services on Cisco equipment. In return, Cisco will provide marketing assistance and access to resellers in the region that configure, install and maintain the equipment. The managed network services are targeted towards small and medium sized enterprises in Taiwan.

Hong Kong

Mobile/Wireless

- BT Group is seeking a return to Hong Kong's wireless market by becoming a third-generation mobile virtual network operator (MVNO). A spokesman for the British telecommunications giant said that it was talking to a "few" 3G mobile licensees in Hong Kong - there are only four - on becoming a 3G MVNO, making it the first foreign operator publicly expressing interest in offering high-speed data mobile services using leased capacity from a local network carrier. The government has stipulated that each 3G licensee must reserve at least 30 percent of its network capacity for MVNOs. China Resources Peoples Telephone said it was in talks with Hutchison Telecom about its 3G MVNO.

Internet

- China Resources Peoples Telephone plans to set up a joint venture with its own Beijing-based parent company to expand into internet content and data storage businesses in the mainland. The company was banking on the benefits provided through the Closer Economic Partnership Arrangement (CEPA) to expand into China's telecommunications sector as a new source of growth. Under the bilateral trade agreement, Hong Kong telecommunications firms are allowed to set up 50:50 joint ventures in five telecommunications businesses including Internet data centers, Internet access storage, forwarding services, call centers and content services. Peoples Telephone, one of the six mobile operators in Hong Kong, has seen net profit for the first nine months of this year decline from a year ago, amid intense price erosion in a city whose population on average has more than one mobile account.

- The Chinese Academy of Sciences will set up an Asian open exchange point in Hong Kong to operate a high-speed Internet network interconnecting Beijing and other countries in the region. The exchange point is part of the Global Ring Network for Advanced Applications Development (Gloriad) launched this year. The establishment of an exchange point in Hong Kong will connect Gloriad to other countries in the Asia-Pacific region. Gloriad has seen its data volume reach 200 trillion bits per second. The high-speed network can support data, image and video exchange worldwide for applications such as digital libraries and virtual observatories.

Telecommunications

- City Telecom (CTI), having posted an 81 percent regression in earnings for the year to August, said a new focus on its fixed-line businesses should reinforce earnings next year. The company said its loss-making pay-television operation would break even by the end of next year while recurring revenue from its contract customers for voice and broadband services would lead the group into growth over the next few years. The company's net profit plunged to HK$49.5 million ($6.3 million) from a record gain of HK$257.7 million ($33.1 million) in the previous year. Performance was dragged down by HK$44.5 million ($5.6 million) in start-up losses at its broadband pay-television business and operating losses of HK$65.3 million ($8.3 million) for the voice and broadband services. The magnitude of the percentage decline was distorted by high comparison base in the previous year, when the company recorded an extraordinary gain of HK$84 million ($11 million) from a one-off wholesale telecommunications charge rebate from PCCW.

Singapore/Malaysia/Philippines/Indonesia

Mobile/Wireless

- MobileOne Asia (M1), Singapore's second-biggest mobile phone company by subscribers, said it would begin trials for its 3G mobile phone services. M1 joins rival and market leader SingTel in testing 3G services ahead of a commercial launch within months. The company said about 100 corporate customers would test M1's 3G data card in the first phase of the trial. The data cards will be plugged into laptop computers for wireless connections. The other phase involves 200 consumers and corporate clients using 3G mobile phones for the month of December. 3G mobile technology has yet to gain mass acceptance worldwide, with questions raised about high costs, customer appetite for the services provided and the delayed rollout of 3G-capable mobile phones.

- DiGi.com, Malaysia's smallest mobile operator, had revived a bid to secure a high-speed 3G service license from the government, a report said. DiGi, which is 61 percent-owned by Norwegian telecommunications group Telenor, withdrew from the race for a 3G license two years ago and chose instead to upgrade its technology, which allows 3G-type services to be delivered via its existing 2.5G network. However, the mobile operator now faces increasing pressure after both its rivals, 3G license holders Maxis and Celcom, moved last year to expand their market share by merging with smaller firms. Maxis tied up with TimeCel while Celcom merged with TMCellular, a unit of state-owned Telekom Malaysia. The two companies are expected to spend US$1.9 billion over the next decade to roll out 3G services.

Telecommunications

- SESDAQ-listed ArianeCorp announced that its telecommunications unit in China, Guangzhou Ariane Telecom Technology Co. Ltd. (GAT), will join forces with an international investment group and a Japanese telecommunications and IT services provider to accelerate the growth of its fiber optics network business in China. On behalf of ArianeCorp., GAT has inked a Memorandum of Understanding with Mobile Pro Co. Ltd for a US$300 million investment by Bansec-Lepta Group. Under the terms of MOU, the investment will be undertaken through a new joint venture company to be incorporated and held by GAT, MobilePro and Bansec. ArianeCorp will retain a 53 percent majority control of the joint-venture company (through GAT), while Bansec and MobilePro and Bansec will take the remaining 42 percent and 5 percent stakes respectively.

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