ò The Tokyo Stock Exchange said it will delist Livedoor from its Mothers market as early as next month. The action comes after the countryÆs Securities and Exchange Surveillance Commission has reportedly decided to file a complaint against the internet company and five suspects, including LivedoorÆs former head Takafumi Horie. The procedure will have TSE placing first Livedoor on the liquidation post for one month to inform investors of the action, then delisting the shares, the delisting taking place possibly in April. Falsifying financial statements is one of the acts specified in the exchange's delisting standards as it has grave implications for investor decisions and the fair management of the market. Livedoor was previously put on the liquidation post in January, when Horie and others were first arrested. The TSE did not go so far as delisting then because charges brought against them at the time were not covered by its delisting standards.
ò Hikaku.com, an operator of price-comparing web sites, announced that it is listing on the Tokyo Stock Exchange's Mothers market for start-ups, marking the first time a company established with less than 10 million yen ($84,000) in capital has gone public. The company earns revenue from online affiliate advertisements, receiving fees when viewers of the ads either buy the advertised products or request product catalogues. Hikaku.com was capitalized at 2.5 million yen ($21,000) when it was founded in August 2003. It currently has 23 million yen ($193,000) in capital. The company's web site currently allows a comparison of 44 kinds of products and services, including financial products, insurance and travel-related services. Hikaku.com aims to increase the varieties of products and services comparable on the site to 300 within three years. In January, the web site attracted 900,000 visitors. The company expects a consolidated pretax profit of 250 million yen ($2.1 million) in its current business year ending in June, a figure representing a 140 percent rise from a year ago when its book-closing was only on a parent-only basis. The expected profit increase is expected to come from growing revenue from affiliate ads brought about by an increasing number of visitors to the web site. Hikaku.com said it plans to use the about 1.8 billion yen ($15.1 million) to be raised through the initial public offering to expand its server capacity and as an operating fund. Monex is the lead manager for the IPO.
ò KDDI Corp announced on that it would begin in July a combined fixed-line and mobile telephone service for companies. To do this, KDDI has developed the E02SA, a handset that is compatible with wireless-LANs (local area networks). The handset can be used as a mobile phone outside the company and for internal-line service inside the company. KDDI will team up with system configuration companies and promote the phone to corporations as a way to reduce communication charges. The handsets can also make use of a fixed-line service when calling an outside line from within the company.
ò NTT DoCoMo Inc. said it has registered 162,300 new subscribers on a net basis to its cellular phone and PHS (personal handyphone system) services in February, besting other firms for a third straight month, according to the Telecommunications Carriers Association. DoCoMo's performance is attributed to strong sales of handsets targeted at the winter shopping season. The figures are also seen as index for a good start for new models introduced that month. KDDI added 160,200 new contracts on a net basis. Its au cell phone service attracted 275,100 subscribers, while its Tu-Ka service lost 114,900 customers. Vodafone KK, which is in talks to be sold to Softbank Corp., got 12,200 subscribers, a number that shows weaker growth than the month before. The results show that the gap is widening between Vodafone, the third-largest cellular provider, and industry leader DoCoMo and No. 2 firm KDDI Corp.
ò NEC Corp. said it has developed a semiconductor laser technology that may lead to the development of next-generation, high-speed supercomputers. The laser, which converts electrical signals into light, connects LSI (large scale integrated) circuits with each other via optical signals, making it possible to transmit data at a speed of 25 gigabits per second, the fastest ever achieved. With existing laser diodes, the maximum data transfer speed has been limited to 10 gigabits per second. The present generation of supercomputers, including Japan's Earth Simulator, which until recently was the world's fastest, is designed to use electrically connected LSI circuits. NEC hopes that, with the new laser technology, Japan will be able to take the top spot from the U.S. in the race to make the fastest supercomputers.
ò Fuji Photo Film disclosed its plans to issue 200 billion yen ($1.6 billion) in euro-denominated convertible bonds in a bid to increase its production capacity for polarizing sheet film for LCDs, as well as go into acquisitions and cover restructuring costs. The plan will have the firm issuing two types of bonds: one at a variable interest rate that matures in March 2011, and a fixed-rate instrument set to mature in March 2013. The bond issuance will be conducted using a new technique developed by Nomura Securities Co. A special-purpose company established in the Cayman Islands will purchase the convertible bonds. Nomura will sell to individual investors bonds exchangeable for Fujifilm shares and backed by the convertible bonds. This is the first time since 1983 that the company is seeking to procure funds through equity financing.
ò South KoreaÆs three mobile phone operators announced additional customer numbers in February, a figure boosted by growing numbers of subscribers to new terrestrial DMB service and strong early-year demand. SK Telecom, the market leader, said it added a net 79,125 customers in February, bringing its total to 19.6 million. KTF gained a net 82,323 users to 12.4 million by the end of February, increasing its market share to 32.2 percent. The third-largest operator, LG Telecom, added a net 56,136 subscribers to raise its total to 6.6 million. The total number of mobile phone users in the country was 38.7 million last month, representing about 81 percent of the population. The number of subscribers to terrestrial DMB phone service stood at 34,000 with KTF, 17,000 with LG Telecom as of the end of February.
ò LG Electronics said it would start to supply WCDMA-based DVB-H phone for Hutchison. Buying the rights for broadcasting FIFA World Cup through DVB-H, the Italian operator will show all the games through DVB-H handset from June. Earlier, LG said it successfully demonstrated its WCDMA-based DVB-H phone in Milan late last month. LG-U900 is capable of mobile broadcasting for over two hours and video calling. DVB-H is a mobile TV standard developed by a Nokia-led project and in rivalry with DMB and Media FLO supported by Korea and the U.S.-based Qualcomm, respectively. In a separate report, LG Electronics announced that it would launch its DMB (Digital Mobile Broadcasting) phone business in Europe with the first release of handsets in Germany in May. The LG-V9000 model is compatible with EuropeÆs GSM (2G)/ GPRS (2.5G)/ UMTS (WCDMA) (3G) services. LG said it is introducing the LG-V9000 in Germany not only to coincide with the launch of the country's DMB service but also just in time for its hosting of the 2006 World Cup. In separate report, Strategy Analytics (SA), a research institute, has predicted that the size of the global mobile TV phone market, which currently totals 8 million units, will grow to 120 million units by 2010, a figure that will stand for 10 percent of handsets worldwide.
ò Samsung Electronics announced that it supplied Cingular Wireless, the largest GSM operator in the US, with WCDMA phones (GH-ZX10). This marks the first time that Samsung provides the WCDMA service in the region. Cingular starts the first commercial WCDMA service in North America this month. After what it considered as the success in the world WCDMA market including Europe last year, the South Korean handset maker expects the debut in the US market will be the start of sales growth in the regional market. The company is planning to supply HSDPA phone to the North American market soon.
ò People in their 20s and 30s were a major user group of terrestrial DMB phones launched in January this year, according to market research firm Atlas Search. The study also indicated that demand for the new handsets was also significant in non-metropolitan areas, where service has yet to be introduced. The research firm surveyed 1,000 mobile phone sales stores nationwide, and found that some 78,000 units of T-DMB phones were sold through February this year, with young people in their 20s and 30s accounting for 87.5 percent of the customer base. People living outside the metropolitan area took 13.6 percent of the total, indicating potentially strong demand for T-DMB handsets in those areas. T-DMB service is now available only in the metropolitan area.
ò KTF, the nationÆs second largest mobile operator, introduced a new service where professional disc jockeys recommend ringtone, ringback tone, and karaoke on subscribersÆ requests. The service, named Magic music DJ, offers one-on-one advice from professional deejays about mobile music contents. Another service sends out text messages about up to date entertainment news and DJ recommendation weekly to subscribers. Receiving subscriber request, deejays give answers by text messages and subscribers would log on to the mobile Internet, Magic, to download recommended contents. The music recommendation and music box services are free of charge.
Media, Entertainment and Gaming
ò Industry sources said the British government and business organizations wish South Korean game firms to invest in England. The entire European market is valued around $9 billion by next year. Of the total value, the online game market and the mobile game market are expected to account for $650 million and $1 billion, respectively. The report said that the British government considers games as one of the innovative technology industries, and that it plans to invest 320 million pounds ($552.3 million) in the industry for the three years. With some 25 percent of game development in Europe being conducted in England, the country is considered one of the worldÆs three game powerhouses.
ò Samsung Electronics says it has developed the worldÆs first 10-megapixel-camera phone, which provides almost the same picture quality as professional cameras. A picture taken with a 10-megapixel resolution remains sharp even when blown up to calendar size. According to its top official, Samsung aims to increase the companyÆs market share from 12.7 percent to 14-15 percent this year. The company also said the global WCDMA mobile phone market will grow from 40 million units last year to more than 80 million this year, and Samsung Electronics aims to sell more than 10 million of the third-generation phones alone.
ò KT, South Korea's largest fixed-line and broadband operator, announced the signing of a deal with a local shipbuilding company to provide it with maritime communications service. The deal was signed with Hyundai Heavy Industries and calls for KT to offer satellite-based maritime communications to its vessels operating around the world from late April. Hyundai Heavy is reputedly the world's top shipbuilder.
ò Alibaba said it would continue to concentrate on integrating the Yahoo China operation as it rules out plans for new acquisition or stock listing in near future. According to its top official, Alibaba has almost finished the reorganization of Yahoo China's business by projecting all its resources to develop the online Chinese-language search engine. Alibaba.com acquired Yahoo China together with a package of Yahoo China's assets that includes Yahoo's search technology, the Yahoo China web site, its communication and advertising business, as well as 3721.com, a Chinese language search engine. As part of the acquisition agreement, Alibaba also obtained $1 billion of investment from Yahoo as well the exclusive right of using the Yahoo brand. Under the deal, Yahoo will take 40 percent of Alibaba's shares even as it retains 35 percent of voting rights in the company. In January, Alibaba announced an investment of Rmb30 million ($3.7 million) to invite three renowned Chinese film directors to shoot an advertisement for the search engine business. Alibaba.com runs online commerce sites that link foreign buyers with Chinese wholesalers. Its popular consumer auction site Taobao.com competes with the Chinese arm of eBay Inc.
ò According to an official with the Standardization Administration of China (SAC), the Chinese government has unanimously agreed to strongly support a homegrown wireless broadband technology in competition against Intel. At the centre of the news is Wired Authentication and Privacy Infrastructure (WAPI), a solution to the security loophole of the existing 802.11 standard of wireless local area networks (WLAN). Seen as in direct competition against 802.11i dominated by Intel, the technology is waiting for final voting to determine whether it is adopted as the international standard. Developed by IWNCOMM, a private company in Northwest China's hi-tech center Xi'an City, WAPI has attracted wide attention from both the domestic and overseas IT markets for its sound security to wireless networks. The Chinese government has attached great importance to the technology and has organized joint meetings of concerned ministries. Sources say a unanimous agreement has been reached to support WAPI internationally.
Media, Entertainment and Gaming
ò Focus Media said China's emerging outdoor television media industry is expected to double in size this year as advertisers focus on the young customers. The outdoor television network company reported for the 12 months to the end of last year a 130 percent rise in its revenue to $68.2 million, with income reaching $23.5 million. The company has installed 45,000 television displays in the lift lobbies of commercial buildings in 70 cities; 27,000 of its displays are in more than 4,000 retail outlets. About 1,200 advertisers, such as mobile-phone service provider China Mobile and technology product vendors Siemens and Sony, use Focus Media's channels. Currently, home-based TV advertising remains the dominant mainland market, with a share of more than 75 percent. Advertisers, however, are turning to outdoor networks to broaden their campaign exposure. With each commercial shown on Focus Media's network aired about 60 times a day, it is seen indeed as generating a much better response than traditional commercials. The company sold more than 4,600 30-second time slots in the fourth quarter of last year, up 9.6 percent on a quarterly basis.
ò Focus Media also announced that it has entered into a definitive agreement to acquire 100% of Dotad Media Holdings ("Dotad"), a leading mobile-phone advertising service provider in China. Since Dotad launched its WAP-based advertising delivery service in 2004, the company has taken about 80% of the WAP-based advertising delivery market in China, based on the traffic volume through Dotad's platform. All of the top 100 wireless value-added service providers in China are customers of Dotad and it has developed a database of approximately 70 million WAP users, covering approximately 90% of all WAP users in China. Under the agreement, Focus Media will acquire a 100% of the equity stake in Dotad for $15 million in cash and up to $15 million in the form of Focus Media ordinary shares (valued at $50 per ADR, each of which represents 10 Focus Media ordinary shares) contingent upon Dotad's meeting certain earning targets in 2006 and 2007, for an aggregate potential payment of up to $30 million. All of the Focus Media ordinary shares in discussion will be in the form of new shares.
ò SpongeBob SquarePants, a cartoon series, grabs the top spot as the No. 1 cartoon program in China after just four weeks on air. The show debuted in China on CCTVÆs kidsÆ channel, with the programÆs audience made up mainly of children. According AGB Nielsen Media Research, from Jan. 29 to Mar. 3, 2006, 35 percent of SpongeBob's audiences are aged between four and years old. Viewers aged between 24 and 34 years old come at 25 percent. The figures indicate that the top cities tuning in to the cartoon are: Chongqing and Tianjin with an average rating of 11.4 percent, Chengdu with an average rating of 4.3 percent, Hangzhou with an average rating of 4.7 percent and Beijing with an average rating of 4.4 percent. In February, China announced a ban on TV shows and movies that blend animated elements with live-action actors, a move said to be in an attempt to nurture local animators. SpongeBob SquarePants, however, was not affected since the program is entirely animation. The countryÆs main television and film regulator, State Administration of Radio, Film and Television (SARFT), the countryÆs main TV and film regulator warned broadcasters and theaters that cartoons including live characters could no longer be shown.
ò Legend Holdings, the parent firm of Lenovo Group, announced its plans to spin off its mainland commercial property subsidiary in Mainland China as a real estate investment trust in Hong Kong. The parent firm said it may consider listing Lenovo in the US. Hong Kong-listed Lenovo acquired US computer giant IBM's personal computer operations for $1.25 billion last year. Legend Holdings said is in talks already with a foreign investment bank about spinning off Raycom Real Estate Development, which has about Rmb2 billion ($248.4 million) of commercial property assets and rental income. Legend said it was considering dual mainland and offshore listings citing the US listing for Lenovo a priority. Lenovo's share of the mainland personal computer market went up to 34.5 percent in the third quarter of last year, compared with 26.3 percent in 2004, according to IDC. The company's global market share was 7.2 percent. DBS Vickers Securities said any plans to list Lenovo in the US would be more about brand building rather than for fund generating.
ò Sources from Guangdong Province disclosed that its electronic information (EI) industry in generated Rmb958.6 billion ($119 billion) in gross industrial output value in 2005, making its EI industry the No. 1 in China for the 15th consecutive year. The output value of GuangdongÆs EI industry accounted for one third of the countryÆs total output value of the EI industry in 2005. During ChinaÆs tenth Five-Year Plan (2001-2005), the provinceÆs EI industry saw a year-on-year increase of 31 percent on the average. The output value of EI industry contributed to 8 percent of the provinceÆs GDP.
ò China Telecom Corp, the parent of Hong Kong-listed China Telecom, announced its plan to spin off its telecommunications services and engineering arm in several Chinese provinces in a share offering worth $200 million to $400 million. Lintech, by being a wholly owned subsidiary of China Telecom Corp's Guangdong Telecom Industry Group, could be included in the new listed company. The company is expected to launch a broadband telephone service to mainland telephone numbers through its Hong Kong partners such as Citic Pacific's telecommunications arm CPC Net, targeting enterprises with businesses in the mainland. This would make China Telecom the first mainland operator to sell a broadband Internet telephone service in Hong Kong to fixed-line numbers in China. By using a broadband telephone box and connecting it to the Internet and a traditional telephone device, users can place calls to the mainland without paying international rates. In turn, mainland telephone users will be able to reach broadband telephone users in Hong Kong or overseas and be charged the price of a local call. In Hong Kong, operators such as City Telecom (Hong Kong) and New World Telecom have already launched broadband telephone services for local fixed-line numbers.
ò The business revenue from the ChinaÆs communication industry hit Rmb55.3 billion ($6.8 billion) in January, a figure that stands for a 10.8 percent growth over the same period last year, according to statistics from the countryÆs Ministry of Information Industry. Within that figure, the business revenue from the telecom industry registered a 10.7 percent growth to Rmb50.1 billion ($6.2 billion). The ministry said the business revenue from the postal industry went up by 11.3 percent to Rmb5.1 billion ($633.6 million). The report shows that in the first month of 2006, the number of fixed-line telephone users went up by 2.5 million to hit 352.9 million and the number of mobile phone users grew to 5.3 million to reach 398.7 million.
ò PChome Online, SkypeÆs Taiwan partner, announced the launching of Skype v2.0, which offers video in addition to VoIP services. The company said that with the launch, it is providing tailored Skype services for the needs of local customers. These services include SkypeRing for the download of ring tones and screen graphics, Skype phone yellow pages, interactive voice response and special VoIP solutions specifically for to business users. PChome expects to expand the PChome-Skype user base from three million registered users and 270,000 paying subscribers currently, to 5 million and over 400,000, respectively, by the end of this year. PChome said it has plans to increase marketing of Skype-enabled hardware under the IPEVO brand of its U.S. subsidiary.
ò Hutchison Telecommunications International Ltd (HTIL) disclosed its plans to spin off Hutchison Essar on the Mumbai stock exchange in what is expected to be the biggest share sale for HTIL's parent Hutchison Whampoa this year. The company also dismissed any idea that Orascom, an Egyptian telecom, may derail its planned listing for its 61.8 percent-held Hutchison Essar. Hutchison Essar covers 16 of India's 23 licensed regions and is valued at $6 billion by a former shareholder. HTIL already consolidated 61.8 percent from Hutchison Essar's profit after it restructured the unit earlier this month. India is HTIL's top market out of its seven-market portfolio, contributing about 41 percent of the group's revenue last year. With total subscribers growing 59 percent to 11.4 million, India's operating profit posted an 87.2 percent rise to HK$2.5 billion ($322 million). Its total revenue went up by 64.1 percent to HK$24.3 billion ($3.1 billion).
ò A small trial network of TD-SCDMA, China's homegrown third-generation mobile phone standard, will be set up in Hong Kong soon, according to Hong Kong Wireless Technology Industry Association. The trial is considered the first to be held outside Mainland China and is seen as boosting ChinaÆs efforts to export the standard. TD-SCDMA trials are already taking place in Beijing and Shanghai. The government has said it will push development of TD-SCDMA domestically and abroad. A spokesman for the Hong Kong Wireless Technology Industry Association said the Hong Kong government had preliminarily agreed to grant a trial license for the network and allocate the spectrum for the testing platform of TD-SCDMA, which will be located in the Hong Kong's Cyberport. The association said the trial, which is expected to last from two to three years, is valued at about HK$20 million (US$2.5 million), and will be funded by the Hong Kong government, private industry players in Hong Kong, and Datang Mobile Communications Equipment Co., one of the key developers of TD-SCDMA in China. Datang said it would cooperate with Hong Kong on TD-SCDMA although the form of cooperation is still being negotiated. In a separate report, a spokesperson for Hong Kong's Office of the Telecommunications Authority confirmed they have received application for a trial license of TD-SCDMA, which is still pending approval. TD-SCDMA has never been used in a commercial network, not even in China.
Media, Entertainment and Gaming
ò MiTV, MalaysiaÆs pay-TV operator, announced its plans to invest M$1 billion ($269 million) to roll out a 3G-mobile services network within two years after winning a license recently. The company said it would raise fund by way of its existing shareholders and through vendor financing. In the long run, MiTV said it has plans to float the firm on the stock exchange, with the company not specifying a timeframe. MiTV and fibre-optic cable network operator TIME dotCom were awarded the remaining two 3G licenses by the government as part of an effort to develop a competitive mobile virtual network market in the country. Two 3G licenses were issued in 2002 to the country's top two telecommunications firm, Maxis Communications and Telekom Malaysia. Malaysia has more than 16 million mobile phone users, giving it a penetration rate of more than 60 percent among its 26 million people. MiTV is part of the Berjaya Group. The company said it would begin rolling out 3G services by the end of the year in phases, with the project aimed to cover 80 percent of Malaysia by 2008.
ò The announced tie-up between Pacific Internet and PCCW-HKT Networks Services, a unit of Hong Kong-listed PCCW Ltd. is seen as connecting their separate private networks to offer wider coverage for their customers. The partnership is expected to broaden PacNet's coverage to include China, Japan, South Korea, Indonesia, Taiwan, the UK and the US and boost the internet service providerÆs revenue. Earlier, MediaRing, which has a 4.8 percent stake in PacNet, gave an offer that valued PacNet at $110.6 million. Vantage, which is currently PacNet's largest shareholder, disclosed that it is also interested in the internet company. Vantage said it might buy up to a 51 percent stake in PacNet in a process that could take about two to three months. Both Vantage and MediaRing are aiming to capitalize on the growth of Internet-based services such as Internet telephony, or voice over Internet Protocol (VoIP), in the Asia-Pacific region. Over the last four years, PacNet's net profit has climbed to $6.5 million in 2005, while its revenue registered a 13 percent rise to $102.5 million. Analysts are expecting PacNet to branch into wireless broadband services soon.
ò SingaporeÆs Temasek Holdings said it has bought a 9.9 percent stake in India-based Tata Teleservices for an undisclosed sum. Tata Teleservices is part of the Tata Group, an Indian conglomerate. Temasek's move makes it the latest foreign company to take a stake in India's telecommunications sector after the government has liberalized investment, raising the cap on foreign ownership in domestic telecom companies from 49 percent to 74 percent. Last October, Vodafone Group PLC paid $1.4 billion in cash for a 10 percent stake in Bharti Tele-Ventures Ltd., India's largest mobile phone operator by subscribers. Singapore Telecommunications Ltd., which is majority owned by Temasek, has about a 30.8 percent stake in Bharti. India's mobile market is one of the fastest growing in the world. Total customers for India's nine GSM mobile operators grew 5.1 percent in February to 65.1 million from 62 million in January. Tata Teleservices, which uses CDMA, has over 8.4 million of the market's 27.8 million CDMA customers.
ò Telekom Malaysia, MalaysiaÆs major phone provider, announced the acquisition of 49 percent of IndiaÆs Spice Communications for $178.8 million. The acquisition brings the Malaysian firm into what is described as the worldÆs fastest-growing mobile phone market. The privately owned Spice operates in the northern Indian state of Punjab and southern Karnataka state, two of the 23 regions making up IndiaÆs mobile market. It has 1.8 million users, or 2.2 percent of a market of roughly 85 million mobile subscribers. Telekom Malaysia bought the stake from Deutsche Bank and Ashmore Investment Management. The purchase is seen as helping Spice restructure US$215 million in existing debt. Analysts say the deal values Spice at 15.4 times its EBITDA, a figure high even in Asian terms. Malaysian telephone firms are increasingly turning overseas for growth as they face a rapidly saturated market at home, where mobile phone penetration is about 68 percent. India is attractive because mobile phone ownership is surging in AsiaÆs third-largest economy, in part because it has the worldÆs cheapest local mobile call rates.