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Tuesday, 22 September 2009, 07:31 HKT/SGT
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Source: IRG
IRG Technology, Media and Telecoms Weekly Asia Market Review

HONG KONG, Sept 22, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Sep 14 - Sept 20. IRG is a financial advisory and investment firm focused on the core growth sectors in Asia with particular focus on the telecommunications, media and technology (TMT) sectors.

- Global shipments of environmentally-friendly mobile phones could reach close to 500 million by 2014. The analyst firm predicted that the growth of the green handset market will be driven more by a shift in consumer demand than initiatives from phone makers. Shipments of environmentally-friendly handsets are expected to reach a quarter of a million this year. If demand becomes widespread, and handset makers are more proactive at recycling phones and introducing environmentally-friendly components into their devices, then shipments of green phones could top 485 million by 2014. However, if the shift in consumers' attitudes towards green phones is less marked, the research firm predicts just 105 million shipments by the same date.

Japan

- Willcom Inc. planning to ask creditor banks to allow a delay in the payment of some 100 billion yen (US$1 billion) in debts due to a decline in subscribers. In order to revive its business, Willcom will have to apply for a type of private rehabilitation which combines features of both a court-mandated liquidation and a voluntary liquidation. The company will aim to turn itself around with the help of a third-party body specializing in private rehabilitation while continuing PHS mobile services. On a net subscription basis, fresh subscriptions minus cancellations. Willcom has suffered continuous drops in contracts, registering a net subscription loss of 30,900 in August.

- NTT DoCoMo Inc. will sell its 16.5 percent stake in Malaysian mobile telecommunications firm U Mobile Sdn. Bhd. to the latter's major shareholder U Television Sdn. Bhd. for US$100 million. U Mobile provides third generation, or 3G, mobile phone services in Malaysia with technological support from DoCoMo and South Korea's KT Freetel Co., which also bought a 16.5 percent share of the company. DoCoMo, whose overseas investment is mainly in Asian telecom businesses, also withdrew from a capital tie-up with Dutch firm KPN Mobile NV in 2005.
- KDDI Corp. will be on the hunt for more acquisitions in Asia as it seeks to boost overseas sales. The firm will take a majority stake in DMX Technologies Group Ltd. through a S$188.4 million (US$133.1 million) investment. KDDI Director of Global Business Development Yasunori Matsuda told the paper that DMX's strong China business was a big draw, as the country is the most important market for KDDI's Asian business.

- Renesas Technology Corp. and NEC Electronics Corp. said their parent firms plan to inject a total of 200 billion yen (US$2.2 billion) as they move toward a merger next April. The merged entity, expected to be called Renesas Electronics Corp., will likely become not only Japan's largest semiconductor maker, surpassing Toshiba Corp., but also the world's No. 3 chipmaker, trailing Intel Corp. of the U.S. and Samsung Electronics Co. of South Korea. Before the merger, loss-making Renesas will first issue shares to its parent firms, Hitachi Ltd. and Mitsubishi Electric Corp. to raise 78 billion yen. The merged entity will then issue shares worth 122 billion yen (US$1.3 billion) to NEC Corp., Hitachi and Mitsubishi.

- Sanyo Electric Co. Ltd. and Dutch navigation device maker TomTom NV said they will team up to produce multimedia navigation systems. Sanyo, which is unprofitable, said that through collaboration with TomTom it can tap into potentially lucrative growth in North American and European markets as the auto industry shows signs of recovery while other Sanyo businesses suffer from weak consumer demand. The firms aim to produce multimedia devices that combine navigation-based functions with other features, such as a DVD player. While navigation systems built into vehicles are commonplace in its home market, portable navigation devices such as those produced by TomTom, often fitted separately to cars after they are sold, are more popular in Europe and North America.

Korea

- LG aims to double its market share for handset sales in Thailand this year through expansion using a new direct distribution channel and the entry into the untapped mid-end mobile phone segment. The South Korean handset manufacturer expects to sell up to 600,000 units this year for a market share of 8 percent, up from 300,000 units sold last year. Pavich Wasanasomboon, marketing manager of LG Electronics Thailand, said fast-growing smartphone demand would fuel the sales. The smartphone market in Thailand is expected to grow by 6-10 percent this year with a total sales volume of 1.5 million units, including phones such as Apple's iPhone, Research in Motion's BlackBerry and handsets based on Microsoft's Windows platform. LG will focus on easy-to-use and affordable smartphones because existing smartphones are expensive and difficult to use.

- Com2uS Co. said the company made it onto U.S. magazine Forbes' list of the best 200 Asia-Pacific small and medium enterprises for the second consecutive year. Com2uS has been listed in Forbes Asia's 200 Best Under a Billion in 2009. The list is an annual compilation of the Asia Pacific's 200 best public-listed corporations with under US$1 billion in revenue. The list was published in Forbes Asia's magazine edition dated September 2009. Com2us was recognized as one of 23 corporations from South Korea on the list, which was culled from an evaluation of 25,326 public-listed corporations across the Asia Pacific.

- Samsung Electronics has partnered with Sigma Designs to provide the SMT-E7200 line of set-top box products. The new set-top boxes are based on Sigma's SMP8654 media processor system-on-chip (SoC) and support Microsoft's Mediaroom client. The new set-top boxes are initially targeted for deployment in Europe.

- The joint venture between Korea's Samsung SDI and Germany's Bosch will have to invest 500 billion won (US$407 million) in an electric vehicle battery plant as part of its bid to gain 30 percent of the global market by 2015. SB LiMotive has broken ground on its factory to produce lithium ion batteries used to power hybrid and pure electric vehicles in the southeastern city of Ulsan. The plant will start production in 2011. The market for eco-friendly vehicles is expected to grow rapidly, boosting demand for batteries to power electric vehicles. Samsung SDI expects the lithium-ion battery market for electric cars to reach US$20.4 billion in 2020 from US$180 million in 2009. Lithium ion batteries are currently mainly used in notebook computers, cell phones, MP3 music players and other portable devices but are increasingly being used to power electric or hybrid cars.

- An analysis report said that Korea's top 3 export items, semiconductors, LCDs and mobile phones - are likely to enjoy being the sole leader at least for six months in the global market. The Federation of Korean Industries released a report of its survey conducted to 92 analysts in Korea about the period of Korean export items enjoying strong competitiveness. In the report, no one has picked six months or less for semiconductors, LCDs and mobile phones, while 37.5 percent said that both semiconductors and LCDs will enjoy the current strong competitiveness for 6 months to 1 year. Those who said that mobile phones will continue to be competitive for 6 months to 1 year accounted for 62.5 percent.

- Samsung Electronics Co. will step up efforts to develop its solar power business, aiming to become a leader in the global solar power market by 2015. The company said it has commenced the operation of a 30 MW-preliminary production line of photovoltaic (PV) cells. Photovoltaic cells, also known as solar cells, make up a photovoltaic module, which is used as a component in a larger system to convert solar energy into electricity for commercial and residential applications. While South Korean electronics makers started their research and development on solar cells a few steps behind their competitors in the U.S. and Japan, they are expected to catch up soon. South Korean manufacturers can easily utilize technologies used in semiconductors and liquid crystal displays (LCDs), as their manufacturing processes are similar.


Singapore/Malaysia/Philippines/Indonesia/India

- Telstra Corp. should separate its fixed-line assets from its consumer business or face curbs on mobile-services expansion, as it reorganizes the industry and will have a A$43 billion (US$37 billion) nationwide Internet network. The company will not be allowed to buy new licenses for wireless services unless it complies with the demands. Telstra is disappointed by the government's unnecessary proposal. The government proposal is an offer Telstra cannot refuse because restricting wireless services would undermine the company's ability to expand in its fastest-growing business. Mobile services overtook fixed-line as the company's biggest business by revenue in the six months ended June. Data sales in the division rose 31 percent, versus the 4.9 percent drop in sales from traditional services.

- NBN Co., the company set up by the Australian government to run its proposed A$43 billion (US$37.3 billion) national broadband network has appointed five key executives as Canberra continues to prepare for the new network. NBN Co. has appointed Jean-Pascal Beaufret, a former executive at Alcatel-Lucent as its chief financial officer. It has also appointed Christy Boyce as head of industry engagement, Greg Willis as head of program delivery and Tim Smeallie as head of commercial strategy. Kevin Brown has been named chief human resources officer and head of corporate services. The appointments come as the government prepares to unveil two key pieces of enabling legislation on the broadband plan: one that will enshrine in law the wholesale nature of the NBN Co.'s operations, and the other that will lay out the regulatory settings needed for the network to succeed.

- Hutchison Telecommunications International Ltd. said 65 percent-owned unit PT Hutchison CP Telecommunications agreed US$422.2 million worth of orders and a service contract with Huawei Technologies Co. for the expansion of its network in Indonesia. Hutchison Telecom will order US$307.2 million worth of equipment and infrastructure from Huawei by Jan. 1, 2011 and an additional US$80.0 million worth by Jan. 1, 2015. Huawei will also provide a three-year service contract to expand the network for US$35.0 million.

- Samart Corp. has been contacted by Singapore's state-owned investment company Temasek Holdings Pte. Ltd. about the purchase of Temasek's stake in Thaicom PCL. While the telecommunications company sees an opportunity to expand its business through Thaicom - Thailand's sole satellite operator - buying a stake isn't currently a priority. Temasek units, Cedar Holdings and Aspen Holdings, own a combined 96.1 percent stake in Shin Corp. Shin Corp, previously owned by ousted Prime Minister Thaksin Shinawatra, holds a 41.1 percent stake in Thaicom. Temasek's acquisition of telecommunications firm Shin Corp. raised political and social controversy as the sale allegedly involved the use of local nominees to keep Temasek's holdings under the legal limit.

- Thaicom PCL earnings should improve due to better utilization of its iPSTAR satellite. The iPSTAR satellite business provides services to 12 Asia Pacific countries, including Australia, Japan and New Zealand. Thaicom, formerly Shin Satellite, was founded by former Prime Minister Thaksin Shinawatra, who was ousted in a bloodless military coup in 2006.

- India's total mobile customer base will be close to 1 billion by the end of 2013, of which 275 million will be 3G services subscribers. The WCDMA spectrum license auction will open on 7 December, while the contest for EV-DO licences and broadband wireless access spectrum will commence two days after the conclusion of the WCDMA auction. Bharti Airtel will launch 3G services by October 2010 if the government awarded spectrum within 90 days.

- ITI Ltd. will get a US$2 billion order from Bharat Sanchar Nigam Ltd. to build a wireless network to offer 25 million connections in western India. BSNL had called bids for the contract and Huawei Technologies Co. was the successful bidder. But the telecom-services provider didn't give the order to the Chinese company following concerns raised by India's security agencies. BSNL gave the contract to state-run ITI without inviting tenders again as a fresh bidding process would have delayed building of the network.

- PT Bakrie Telecom's first-half net profit rose to 72.78 billion rupiahs (US$7 million) due to the increasing customer numbers. Net revenue rose to 1.33 trillion rupiahs (US$137.3 million) during the January-June period as its customers increased by 3.5 million to 8.9 million during the period. The company expanded its service coverage to Bukit Tinggi, Singaraja, Tanjung Pinang, and Metro Lampung during the January-June period, bringing the total areas under its coverage to 73.

- The New Zealand government would proceed with a NZ$1.5 billion (US$1 billion) investment to build a national broadband network together with the private sector, while rejecting counterproposals by Telecom Corp. of New Zealand Ltd. and Vodafone New Zealand, a unit of Vodafone Group PLC. The new network would be established through a new government company, Crown Fibre Holdings that will be operational next month. The government will select 33 regional and national operational partners - to be known as Local Fibre Companies - that will build commercial, open access, dark fiber networks. Crown Fibre Holdings will receive proposals from the Local Fibre Companies by mid-2010.

- Aircel Ltd. has signed an agreement valued at more than US$400 million to share about 5,000 of its telecom towers with Datacom Solutions Pvt. Ltd. Aircel holds 74 percent- has 15,000 towers and operates in 18 of India's 22 telecom service areas. It has licenses to operate in all 22 areas. Aircel has been in the news recently for planning to sell a stake in its tower operations, with firms such as Wireless Tata Telecom Infrastructure and GTL Infrastructure confirming their interest.

- Datacom Solutions, a company jointly held by Mahendra Nahata, managing director of Himachal Futuristic Communications Ltd., and the Dhoot family, founders of consumer goods maker Videocon Industries Ltd., holds a license to offer mobile telecom services in India, but is yet to start services. The deal will help Datacom roll out services across all circles faster. The company aims to start mobile services by the end of this year. Existing mobile operators are looking to share infrastructure with new players to maximize use of their towers and other assets to boost revenue in the world's fastest-growing cellphone services market.

- Maxis Bhd., Malaysia's dominant mobile phone operator, is looking at selling 2.25 billion shares in an initial public offering that may raise about US$2 billion and would be Malaysia's largest IPO in recent years. The company will have to sell 2.075 billion shares to institutional investors and 174.8 million shares to retail investors. The offer represents 30 percent of the company's existing share capital. No offer price has been set, but analysts estimate Maxis could raise some US$2 billion.


About IRG

IRG is a financial advisory and investment firm focused on the core growth sectors in Asia with particular emphasis on the telecommunications, media and technology (TMT) sectors. IRG's Financial Advisory business is underpinned by the decades of experience in Asia of IRG's professionals, resulting in a unique network of relationships with global and Asian corporations, government institutions, and public and private equity investors. IRG has developed and structured many of the largest and most innovative transactions in the key growth sectors in Asia over the last decade. IRG's Investment business is supported by its corporate finance experience in Asia with over US$13 billion in completed public and private markets transactions executed by IRG professionals over their respective careers in Asia. IRG's platform covers Greater China (Hong Kong, China and Taiwan), Japan, Korea, Singapore, Southeast Asia, and Australia. For more information, please contact Juliette Chow at Tel: +852 2237 6000 or E-mail: [email protected]



Sept 22, 2009 07:31 HKT/SGT
Source: IRG

Topic: Research / Industry Report

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