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| Thursday, 10 September 2009, 07:44 HKT/SGT | |
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Source: IRG | |
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HONG KONG, Sept 10, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Aug 31 - Sept 6. 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.
Japan
- NEC Corp., Hitachi Ltd. and Casio Computer Co. plan to merge their mobile handset operations. This will create the country's second-largest cellphone maker by shipments after Sharp Corp. The Japanese cellphone makers aim to boost profitability by consolidating operations to save money in a domestic market nearing saturation. A consolidation of the three players would help lessen their spending on development costs and ride out the tough local market. This would also trigger an expansion overseas. That prospect encouraged the investors to snap up shares in the three companies.
- Sony Corp. decided to sell 90 percent of its North American television-manufacturing. The stake in a liquid-crystal-display TV unit based in Tijuana, Mexico and the unit's manufacturing assets will be bought by Hon Hai Precision Industry Co. Hon Hai will still produce Bravia TVs. 3,300 of its factory workers will still remain. Sony will have the balance of 10 percent of the unit. Sony is cutting 16,000 jobs. Eight factories were also closed down to increase its profit. The sale signals Sony may eventually stop making TVs.
- Sony Corp. will boost its joint parts purchases with Sony Ericsson Mobile Communications AB to cut costs and help the struggling cellular phone joint venture. The two already jointly purchase capacitors and will expand the list of products to include components used in both Sony's electronics and Sony Ericsson's cell phones. Sony, which competes with Canon in digital cameras and Samsung Electronics in flat TVs, will notify key parts suppliers of its plan as early as this month and will start joint price negotiations. By increasing their purchasing volumes, the companies plan to bolster their leverage in price negotiations with suppliers.
- NEC Corp. and Motorola Inc. will provide wireless base stations for KDDI Corp's next-generation mobile network. The LTE (Long Term Evolution) standard paves the way for cellular communications speeds on a par with fiber-optic lines, enabling users to download music CD in less than one minute and a two-hour movie in about five minutes. With an eye toward commercializing the technology in December 2012, KDDI will spend 515 billion yen (US$5.5 billion) on related capital investments through the end of fiscal 2014. The cellular service carrier solicited proposals from a wide range of equipment providers, including Chinese and European firms. It has already selected Hitachi Ltd. to build the network's core infrastructure.
- NTT Data Corp. completed its acquisition of 51 percent of Australian ERP services company Extend Technologies Group Holdings Pty. The deal is expected to close in late September. NTT Data is making the acquisition via a Singapore-based umbrella company for the Asian region for a price thought to exceed 1 billion yen. Extend has five locations in Australia, including sites in Brisbane and Sydney, and employs around 120 workers. It had some 2.4 billion yen (US$25.8 million) in sales in the year ended June. Extend will continue to trade with its current branding and staff. The deal is a follow on from NTT Data's 2008 acquisition of Croquet and major SAP global partner, itelligence.
- NTT Data has completed its acquisition of SAP specialist, Extend Technologies. The acquisition involved the purchase of 51 percent of Extend shares.
- Elpida Memory Inc. will raise up to 78.48 billion yen (US$843 million) in a public share offering to secure funds for research and development, capital investment and payment of debts. Elpida will sell 55 million new shares in Japan and abroad, which will boost the number of its common shares by around 39 percent.
- Orders for Japanese equipment used to make semiconductors outpaced sales for the fourth straight month in July as the chip sector inches out of its worst-ever downturn. Back-to-school demand for PCs is helping chip sales scramble up from record low levels, nudging up spending at Intel, the world's largest chipmaker, and helping outlook at memory chip giant Samsung Electronics. Orders for Japanese chip-making equipment rose for the fifth straight month in July to 50.5 billion yen (US$533 million) outpacing sales of 36.8 billion yen (US$389 million), calculations based on industry data showed. The orders were still down 46 percent from a year earlier.
- GMG has established a subsidiary in Japan in order to get closer to its clients and global industry partners by reinforcing its local distribution networks. GMG Japan, headed by Kazutami Ando, is responsible for organizing the distribution of the GMG's software solutions, logistics and technical support.
Korea
- The main engines of growth in South Korea's telecommunication market from 2010 to 2014 will be services built around broadband technologies such as VoIP, IPTV, and mobile data. South Korea is one of the most advanced communications markets in the world with its 75 percent household fixed broadband penetration rate and 86 percent mobile user penetration rate at year-end 2008. Pyramid Research expects the market to rebound and to grow at a CAGR of 4.9 percent during the next five years, generating US$ 29.5 billion by 2014. Due to near saturation in the fixed market, operators are turning to value-added services such as VoIP, IPTV, and broadband applications to create additional revenue streams.
- Sony Ericsson, Alcatel Lucent SA have been shortlisted to acquire Nortel Networks Corp.'s stake in its Korean joint venture LG-Nortel. The four, which include JP Morgan's One Equity Partners and Korean investment firm SkyLake Incuvest, were shortlisted from eight bidders and will start their due diligence. Nortel owns 50 percent plus one share in the joint venture, which makes wireless telecommunications equipment. South Korea's LG Electronics Inc. owns the remainder of the joint venture.
- The number of IPTV subscribers in South Korea exceeded 700,000 in August. During the month 111,459 new customers took up the services to reach a total of 706,706. The total IPTV customer base stood at 400,000. During July, IPTV providers added 4,000 to 5,000 new customers per day but this had recently increased to about 7,000. The Commission attributes the jump in monthly net adds to the government's push to make the services more popular. The government's IPTV subscriber target for this year is 2 million. Currently, three providers offer the services: KT, SK Broadband, and LG Dacom.
- Pixelplus Co's revenue for the second quarter of fiscal 2009 was 4.4 billion won (US$3.5 million). Net income in the second quarter of fiscal 2009 was 30 million won (US$0.02 million). The Company sold roughly 4.7 million image sensors in the second quarter of 2009, which declined 0.2 million from its sale of around 4.9 million units in the first quarter of 2009.
- Samsung Electronics led the market in 3G video cellphone services in China in the first few months of the launch of the service. Samsung leads in two of the categories, TD-SCDMA and CDMA-2000. Samsung secured a 44.1 percent share of the CDMA-2000 market, which is based on 3G video technology. The company also secured 23.6 percent of the market that is backed by the TD-SCDMA technology China Mobile has chartered.
- Samsung Electronics had no intention of pursuing an acquisition of SanDisk Corp. in the future, confirming that the US$5.9 billion deal was dropped definitely. Flash memory company SanDisk last year spurned an unsolicited buyout offer from Samsung for US$26 per share. Samsung dropped its bid in October, citing SanDisk's deepening losses and uncertain outlook. If the deal had gone through, Samsung would have secured advanced technology and a tighter grip on the market for NAND flash memory chips, where it competes with Japanese rival Toshiba Corp.
India
- AT&T could be set to re-enter India's mobile market by acquiring a minority stake in BSNL. BSNL was exploring a possible stake sale to a foreign firm to raise funds to help it compete better against its domestic rivals. AT&T has not been present in India's mobile sector since it sold its 33 percent stake in Idea Cellular following its merger with Cingular Wireless.
Telecommunications
- Bharat Sanchar Nigam Ltd. will award an extension contract worth US$500 million to Telefonaktiebolaget LM Ericsson. Ericsson should supply GSM equipment to maintain 5.25 million subscribers. Ericsson is among the two short-listed vendors for telecommunications company BSNL's 93-million GSM line project worth 300 billion rupees (US$6.2 billion).
- Bharti Airtel Ltd. will be able to launch commercial mobile phone services using 3G technology by October 2010 if a government auction of radio bandwidth is completed in the next 90 days. If the auction happens within 90 days, Bharti Airtel will have the radio bandwidth to be allocated by February-March 2010. India's government set 35 billion rupees (US$714 million) as the starting price for auctioning of one slot of pan-India radio bandwidth for 3G mobile phone services, and will have to complete the auction process in three months.
- Reliance Infratel Ltd. had an agreement to lease its telecom infrastructure to S Tel Pvt. Ltd. The deal may give the Reliance Communications Ltd. unit 10 billion rupees (US$205 million) in revenue over 10 years. Reliance Communications and Bharti Airtel are considering the possibilities of sharing their infrastructure with new players. This will maximize the use of their towers and other assets, and in turn, will increase its revenue in the world's fastest-growing cellphone services market. In sharing the infrastructure, the companies will have huge savings in investment for their launching services. It will help them roll out their services much faster as well. Reliance will provide space, radio transmission and intercity connectivity in six telecom services areas via fiber-optic cables on its telecom towers.
Thailand
- DTAC kicked off a four-month trial period for its third-generation mobile broadband in Bangkok. DTAC is conducting the trial based on high-speed packet access technology over its existing 850-megahertz frequency. The estimation for the cost of trial will be at 100 million baht (US$2.9 million). The trial area will initially cover only certain spots in inner Bangkok and will eventually include other areas in the city. Called 'DTAC mobile Internet on 3G', the trial service allows 2,000 selected users to use DTAC aircards to access mobile broadband from notebook computers free of charge throughout the trial period. The trial will focus on connecting to mobile Internet through computers only and excludes voice and other services.
Indonesia
- PT Telekomunikasi Indonesia is planning to sell its 40 percent in network provider PT Patra Telekomunikasi to focus more on its core business. Patrakom is also 40 percent owned by PT Elnusa and privately owned company PT Tanjung Mustika.
Middle East
- Zain's shareholders cancelled articles that limited individual ownership to 2 percent of the company's capital and restricted public shareholding companies to holding no more than 5 percent. This may caused the foreign or local investor to own a majority. Zain is having a meeting with three international telecommunications companies regarding the sale of its African operations. Vivendi SA wants to have a meeting with Zain regarding its desire of buying a majority stake in the Kuwaiti company's African telecommunications assets. Zain values the assets at about US$10 billion.
Australia
- Telstra Corp's Russell Higgins and Steve Vamos will join the board, which has been through a significant shakeup in the past six months. David Thodey was placed on the top role after former boss Solomon Trujillo left the company. Chairman Donald McGauchie was replaced by Chairwoman Catherine Livingstone. Both had been criticized by some shareholders for damaging Telstra's relationship with lawmakers and regulators. The new appointees will experience a number of significant challenges like working with the government on Canberra's planned A$43 billion national high speed broadband network and potentially tighter regulations.
- Telstra Corp. is planning to cooperate with the Australian government on an ambitious US$36 billion plan to create a high-speed nationwide broadband network, including the sale of assets to the state-controlled company running the project. The new network could transform Australian into one of the world's most wired countries. But it is also expected to have a major impact on Telstra potentially rendering large parts of its fixed-line and cable networks redundant. Telstra has found that historically, consumers won't pay more than about 3 percent of their disposable income on such services.
Topic: Press release summary
Source: IRG
Sectors: Media & Marketing, IT Individual, Wireless, Apps
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