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| Wednesday, 2 September 2009, 11:03 HKT/SGT | |
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Source: IRG | |
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HONG KONG, Sept 2, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Aug 24 - Aug 30. 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.
- Personal-computer makers are entering the smartphone market as it hopes to raise the computers sales even though there are still problems. PC makers are advised to have better relationships with mobile operators for them to sell their products. It will also take time to develop differentiated products. Marketing their own brands will be one of their problems, considering that the consumers already have many choices. If PC makers would gain share, this would caused revenue growth and improvement in overall profitability. Competition in the smartphone segment has increased in recent years with the advent of Apple Inc.'s popular iPhone.
Japan
- Sony Corp. cut the price of its PlayStation 3 console by 25 percent, bowing to demands from game publishers and increasing the pressure on industry leader Nintendo to follow. PlayStation 3's price will be US$299 in the U.S., with comparable reductions in Europe and Japan. Nintendo offers the Wii for US$250 and Microsoft Corp sells its Xbox 360 machine for as little as US$200. Sony chairman Howard Stringer, who rebuffed calls for cheaper prices as recently as last month, reversed course after PS3 sales tumbled to a two-year low. Sales of Nintendo's market-leading Wii dropped for the first time last quarter as the global recession drove down consumer spending.
- Sony's sales of televisions in Japan may exceed its estimate, helped by government incentives to buy energy-saving home appliances. Sales of flat-panel TVs in the world's second-largest economy increased 30 percent in July from a year earlier, the biggest gain in the past two years. The number of sets sold that month increased 54 percent. Sony, the maker of Bravia TVs ranked fourth by shipments after Sharp, Toshiba and Panasonic. Buyers of refrigerators, air conditioners and TVs that meet government-set energy efficiency criteria earn points that can be exchanged for travel vouchers, railway tickets, coupons for rice and other goods.
- Softbank is seeking cooperation with Taiwanese companies to establish a mobile software market platform in Taiwan by end-2009 or early 2010. Softbank is in meetings with Chunghwa Telecom, Far Eastone Telecommunications (FET), and Vibo Telecom. Softbank plans to set-up an open software market for all handset brands and models. The company established the Joint Innovation Lab with Verizon Wireless and Vodafone to innovate mobile value added services.
- Combined sales at NEC Electronics and Renesas had 1.2 trillion yen (US$12.8 billion) last year and a merger would create Japan's biggest chipmaker, surpassing Toshiba with 30 percent of the global microcontroller market. Negotiations between NEC Electronics, which had originally hoped for a merger with either the chip operations of Toshiba or Fujitsu, and Renesas have been rocky. The two companies had earlier targeted an official agreement in July, and had already postponed it once for an August date. The two sides needed to reach an agreement by August to get regulatory approval in time for an April merger. NEC Electronics and Renesas Technology may receive a US$2.1 billion bailout from their parent companies to bring about the merger. The main sticking point in the deal was estimated at about 250 to 300 billion yen (US$2.66 billion- US$3.19 billion). Hitachi Ltd and Mitsubishi Electric Corp would allocate most of the 200 billion yen (US$2.1 billion) in aid being discussed while NEC Corp would shoulder some of the restructuring costs.
- Fujitsu Ltd. said its chip business will record a 10 billion yen (US$107 million) profit next fiscal year as the company cuts costs and outsources production. Sales in the unit will rise to about 310 billion yen (US$3.3 billion) in the 12 months to March 2011. The company maintained its July outlook for a 15 billion yen (US$160 million) loss from the operations this year. Cost cuts at the chip unit will save it 80 billion yen (US$854 million) in two years to March 2011. The company is also selling its money-losing hard- disk-drive business to Toshiba. Fujitsu aims to reduce expenses at the business by 65 billion yen (US$170.8 million) in the 12 months to March 31 and 15 billion yen (US$160 million) next fiscal year.
- So-net Entertainment Corp. will offer a popular Internet game in Taiwan, Hong Kong and Macau through a tie-up with a top Taiwanese game developer. Through game developing unit Gamepot Inc., So-net will license operation of the Livly Island gaming community site to Soft-World International Corp. The Taiwanese firm will operate the Chinese-language site of Livly Island in the new markets through a subsidiary on its community site, Glog City. Players of Livly Island raise small creatures called Livly on their own islands, and communicate with other players by visiting each other's islands. Most of Livly Island's features are available free of charge in Japan, and in the new Asian markets, Glog City members will be able to use the game's basic services at no cost as well.
- Mixi Inc. plans to boost the number of its users to 30 million from 17 million within four years. Mixi expects to attract more users by adding more functions and content to its site, opening up registration and through a marketing campaign. Launched in February 2004, it logs over 15 billion monthly views, a quarter of which are via mobile phones, but the number of its users is still a fraction of those of News Corp's MySpace or of Facebook.
- Epson Imaging Devices Corp. agreed to plead guilty and pay a US$26 million fine for price fixing in the sale of flat-panel displays for cell-phone screens. Epson pleaded guilty to one count of conspiring to fix prices of so-called Thin Film Transistor-Liquid Crystal Display panels sold to Motorola Inc. for use in its Razr phones. The plea agreement, which requires approval by a federal judge, requires Epson to cooperate with the Justice Department's continuing antitrust investigation of the panels. The display panels are used in computer monitors and notebooks, televisions, mobile phones and electronic devices.
Korea
- According to Yonhap News Agency citing the Korean Central Broadcasting Station, North Korea is expanding its telecommunications networks nationwide and will be renovating its broadcasting sector. Fiber-optic cables have been laid to link the capital to all provinces, laying the foundation for digitized telecommunications. The modernization of the broadcasting sector is also being pushed through with full force. The government controlled access to outside information, and fixed the tuning controls of radios and televisions to official stations. North Korea first launched mobile phone service in Pyongyang in November 2002, but banned it after a deadly explosion in the northern Ryongchon train station in April 2004, apparently to prevent word of the accident from spreading. In December 2008., Orascom Telecom, an Egypt-based mobile carrier set up a joint venture in North Korea to establish a third-generation mobile network, North Korea's only cellular network open to individual subscribers. Koryolink, in which Orascom owns a 75 percent majority stake, had 47,863 subscribers at the end of June, more than twice as many as at the end of April of 19,208. The remainder 25% stake of Koryolink is held by the state-run Korea Posts and Telecommunications Corp.
- South Korean chipmakers will likely solidify their leadership while the prices of dynamic random access memory (DRAM) chips are on the rebound. The price of the benchmark DDR2 DRAM chip soared to US$1.41, a 74.1 percent increased compared to January when, it hit bottom at US$0.81. The price of a DDR3 DRAM chip, the improvement on its predecessor, the DDR2 DRAM chip, increased 77.2 percent to US$1.56 four months after it reached a low of US$0.88. As demand for personal computers, especially laptop computers, is growing along with signs of economic recovery, it will have a positive impact on Samsung Electronics Co. and Hynix Semiconductor Co., which have a technological edge over their global competitors.
- LG Electronics will produce more LCD TV panels from Taiwan this year for them to meet strong demand from overseas. The Korean brand plans to replace Sony to be the world's second-largest LCD TV brand. LG claimed that its procurement value from Taiwan this year is expected to be the same as last year's of about US$1.5 billion level. LG will purchase panels from AU Optronics Corp. and Chi Mei Optoelectronics Corp. There has been a global supply shortage of LCD TV panels in recent months, especially the Full High-Definition (HD) or 1080p-resolution 42-inch panels with about 30 percent gap. LG contracts local Ya Hsin Industrial Co., Ltd. to supply locally assembled LCD TV sets using imported TV panels and HD tuners from South Korea. The Korean brand aims to sell 150,000 LCD TVs on the island this year, making it the No. 1 nameplate in the domestic market.
- Samsung Electronics Co. and LG Electronics Inc. will buy at least 40,000 17-inch wide LCD computer-monitor panels every month from LG Electronics' display unit LG Display Co., while LG Electronics will buy back the same number of 22-inch wide panels from Samsung's LCD division. The cross purchase has been strongly encouraged by the South Korean government because it can boost the South Korean manufacturers' leadership in the LCD market.
India
- Deutsche Telekom AG has bought a 17 percent stake in Indian telecommunications firm Devas Multimedia. The company will offer a high-capacity radio network for quick Internet connections in metropolitan areas of India from 2010. The move would focus in Europe and the U.S. in its expansion abroad. Deutsche Telekom Chief Executive Rene Obermann also plans to expand in the developing countries like in Asia and Africa.
- Bharti Airtel Ltd. had allocated US$5 billion from an association of international and local banks, as its merging with MTN Group Ltd. becomes closer.. IDBI Bank Ltd. has offered a US$500 million loan in rupee terms to Bharti Airtel Ltd. to partly fund the telecom company's bid to strike a merger deal with South Africa's MTN Group Ltd. Australia & New Zealand Banking Group, Barclays Capital, BNP Paribas, Citigroup, DBS, Mitsubishi UFJ Financial Group and Standard Chartered are some of the banks signing up to the dollar portion. Bharti and MTN have been is in meetings on a complex cash and share swap for more than two months. The cash and share swap would be at around US$23 billion and will have further extended talks until the end of September. If the deal would be successful, it will result in a telecom giant with combined annual revenue of more than US$20 billion and more than 200 million subscribers. Bharti would have 49 percent stake in MTN. It would also buy a stake directly for cash and will issue global depository receipts besides receiving MTN shares as part of the swap. MTN would buy a 25 percent stake in Bharti for US$2.9 billion in cash plus new shares. Stock received by its shareholders would take the stake in Bharti to about 36 percent.
- India's government approved the exit of state-run Telecommunications Consultant of India Ltd., or TCIL, from Bharti Hexacom Ltd. Bharti Hexacom offers mobile services in the western Indian state of Rajasthan and in some northeastern states. TCIL has a 30 percent stake in Bharti Hexacom, with Bharti Airtel Ltd. holding the remaining.
- India decided on the starting price for auctioning radio bandwidth for 3G mobile phone services in the country and the number of licenses to be auctioned, clearing the path for the much-awaited auction in the world's second-largest mobile telephony market. India's major telecom operators have been keenly awaiting the auction of 3G spectrum, which is owned by the federal government, as it will allow them to offer high-speed telecommunication services that can attract users willing to pay a premium for multimedia capabilities such as e-mail on their cellphones. India will auction four 3G mobile phone service licenses and three worldwide interoperability for microwave access.
Malaysia
- Axiata Group Bhd. posted a 44 percent improvement in its second-quarter earnings and flagged that its return on equity for the year will be moderately higher than its earlier guidance of 4 percent. The mobile operator also has no plans to re-list its Malaysian mobile unit Celcom. A re-listing of Celcom now may impede Axiata's ability to channel the cash. Celcom was de-listed in 2003. Axiata had net profit for the three months ended June 30 increased to 526.8 million ringgits (US$149.4 million). It attributed the improvement to a 532 million ringgits (US$150.8 million) foreign exchange gain and higher revenue from its key operating units. Revenue increased to 3.16 billion ringgits (US$896 million) due primarily to higher income from Celcom and Axiata Bangladesh.
- Time DotCom Bhd. has disposed a 3.6 percent stake in DiGi.Com Bhd. for 604.95 million ringgits (US$171.6 million) via private placement. Wholly-owned unit Hakikat Pasti Sdn. Bhd. disposed of the 27.75 million shares in DiGi at 21.80 ringgits (US$6.1 million) each. The net proceeds from the sale will be used to repay bank borrowings of 552.7 million ringgits (US$156.7 million), and the remainder will be utilized for working capital purposes. Time's 7.1 percent stake in DiGi has been reduced to 3.5 percent.
Philippines
- Republic Telecommunications Holdings Co. (Retelcom) was allowed to suspend payment of outstanding obligations amounting to 1.11 billion pesos (US$231.3 million) by a local court after petitioning for a 15-year corporate rehabilitation program. Retelcom aims to turn itself into a broadband wireless access provider. The group will settle its obligations through debt-to-equity conversion. The group's rehabilitation plan's initial hearing is schedule in Oct. 13.
Topic: Research / Industry Report
Source: IRG
Sectors: Media & Marketing, IT Individual
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