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Friday, 23 October 2009, 16:51 HKT/SGT

Source: IRG
IRG Technology, Media and Telecoms Weekly Asia Market Review

HONG KONG, Oct 23, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Oct 12 - Oct 18. 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 PC shipments in the third quarter increased 2.3 percent from the year before, a sign of continuing recovery. The first quarter was down 6.8 percent as second quarter also declined 2.4 percent. All regions except Japan either met or surpassed expectations in the third quarter, with portable PCs continuing to account for the majority of volume and growth, and Mini Notebooks still making a substantial contribution. The U.S. PC market increased by 2.5 percent in the quarter, with vendors with a solid retail presence the main beneficiaries as HP regained the top spot. In the EMEA (Europe, Middle East and Africa), the quarter decelerated in growth but sees to improve due to continued consumer demand in Western Europe.

- Venture-capital fundraising dropped to its lowest point in six years during the third quarter as financial turmoil continued to buffet universities and pension funds' investments in startup companies. Venture firms raised US$1.56 billion in the quarter. The number of dollars committed was the lowest since the first quarter of 2003, while the 17 investment pools raised were the fewest since the third quarter of 1994. Fundraising in the venture-capital industry has been buffeted by the slowing market for initial public offerings, Ray Rothrock, a partner at Palo Alto, California venture firm Venrock said in an interview last month. There have been only 14 IPOs of U.S. startups since the end of 2007. Fundraising may have fallen to its lowest point this quarter, since several firms have almost finished raising money.


- Elpida Memory Inc., which secured a US$2 billion lifeline in September including public money, is planning to join industry leader Samsung Electronics Co. in a new round of technology spending to widen its lead over smaller Taiwanese makers of dynamic random access memory (DRAM). Spot prices of DRAM are now more than double what they were a year ago. Analysts credit demand rises for cutting-edge chips for high-performance computers as well as procurement by Chinese brokers following the National Day holiday in early October. DRAM prices will peak in the first half of October.

- Japan's Elpida Memory Inc. will raise its stake in its Rexchip, its Taiwan venture with Powerchip Semiconductor Corp to above 70 percent by the year's end. Elpida raised its stake in Rexchip to 64 percent from 52 percent earlier. It has acquired 350 million Rexchip shares from Powerchip Semiconductor Corporation (PSC) as partial repayment of the loan interest and principal to strengthen the management of the consolidated subsidiary's operations. Elpida Memory Co. Ltd. provided PSC with a short-term loan. Elpida and Elpida Memory merged with PSC to settle the loan obligation.

- Japan International Cooperation Agency (JICA) has agreed to finance the construction of a submarine electric transmission cable between Java and Sumatra. JICA will provide a loan of US$1.87 billion for the US$2.2 billion project and PLN, which owns the project, will put up the rest. The loan is for 30 years with a grace period of 10 years carrying an annual interest rate of 0.3 percent. Construction of the 700 kilometer cable project will start in 2011, and it is to be completed in 2016. The project will link the Sumatra systems and the Java-Madura-Bali interconnections.

- Interlink Co. of Japan merged with RegistryASP for provisioning of new gTLD registry solutions and services. Interlink and RegistryASP will be sponsoring the upcoming ICANN meeting Seoul. The two companies will encourage and advocate Asian Internet communities' participation in the new gTLD application as part of the Asia.


- Internet home phone business of LG Dacom will surpass 2 million subscribers this month for the first time in the industry after reaching 1.91million in the end of last month for my LG070 service subscribers. The firm attributed cheap fee system such as free calling to increase, and word of mouth among house makers were effective. Sales revenue was up 502 percent from Won 18.3 billion in 2007 to Won 109.9 billion last year.

- LG Telecom Ltd. plans to merge with its two affiliated fixed-line Internet operators, the latest in an industry-wide move to converge the fixed-line and wireless businesses. The operator is planning on merging with LG Dacom Corporation, a fixed-line Internet operator, and LG Powercom Corp., an Internet service unit.Significance: The merger is essential for LG to compete with its bigger rivals to secure more customers in the nearly saturated local telecom market. LG Group currently owns 37.4 percent and 30 percent stakes in LG Telecom and LG Dacom respectively. LG Dacom has a 40.9 percent stake in LG Powercom, while Korea Electric Power Corporation holds a 38.8 percent stake in LG Powercom.

- The number of South Korean subscribers to real-time Internet-protocol television (IPTV) has topped the 1 million mark, helped by the expansion of infrastructure and improved service quality. KT Corp., SK Broadband Co. and LG Dacom Corp. achieved the landmark, about nine months after the commercial service of IPTV started. IPTV delivers television and movie content real-time through broadband Internet networks instead of using radio frequency or satellite signals as traditional TV does, and also offers video-on-demand (VOD) services. Including VOD subscribers, the number of IPTV viewers totaled 2.01 million.

- Cisco is doing smoothly in investment in Korea. The investment of US$2 billion for 5 years promised by Chairman John Chambers on April will proceed soon. Cisco invested US$40 billion in local venture fund on October 3, and has followed original plan such as appointing head of Global Center, which will be established in Songdo. Recently, it has created separate organization related with Songdo u City business within Cisco Korea. Cisco appointed Jean Louis Maso, worked in India office, as head of GCIU, which will be established in Songdo International Business Complex. Jean is executive of headquarters. He and his family moved to Korea to begin assignment. Global Center is R&D organization, which was stressed by Cisco as the first investment in Songdo. Global Center will develop application applied to u City, cooperate in eco partnership and smart solution, key R&D for Cisco.


- Axiata Group Bhd. expects a price war and potential introduction of per second billing in India to hurt earnings initially but to benefit the company in the long run. Axiata's India-based 14.99 percent-owned associate, IDEA, unveiled a new plan offering flat rates for mobile users in Mumbai and for national long distance calls.

- DiGi.com, which is confident of achieving more than 1.27 billion ringgits (US$376.6 million) in operating cash flow this year, expects its broadband services to contribute a significant part of its revenue in 2011. The company had 11,000 broadband users at the end of June and is targeting to raise that to 30,0000 by year end. No targets for 2010 and 2011 were given. DiGi.com launched the broadband services in March this year.

- The total number of mobile phone users in impoverished Bangladesh has reached 50 million, making it one of the fastest-growing telecommunications markets in the region. The country's telecoms regulator said mobile phone subscribers crossed 50.4 million at the end of September, meaning more than one in three people in one of the poorest countries in the world has a cell phone. Bangladesh issued its first mobile phone license in 1993. Growth was slow in the first 10 years, with total subscribers reaching just 1.5 million in the early 2003. However, the Bangladesh economy has grown rapidly in recent years, fueled by a better-than-expected flow of remittances, and the prices for phone use have fallen sharply due to competition.

- Quippo Telecom Infrastructure Ltd. is looking to raise around US$300 million through a stake sale to pay off its debt. The company holds a 49 percent stake in Wireless TT Info-Services Ltd., or WTTIL, which was earlier named Wireless Tata Telecom Infrastructure Ltd. Wireless Tata Telecom Infrastructure was formed via a merger of the telecom tower operations of Tata Teleservices Ltd. and Quippo in January. WTTIL now has about 25,000 towers. At the time of the deal in January, the combined entity had about 18,000 towers, which gave it an enterprise value of 130 billion rupees (US$2.82 billion). For its deal with Tata Teleservices, Quippo had taken debt, which it intends to retire by raising money through the stake sale. Demand for passive telecom network infrastructure such as towers is booming in India - the world's fastest-growing telecom market by subscriber additions as new mobile providers opt for leasing infrastructure to reduce costs and roll out services faster.

- Bharat Sanchar Nigam Ltd. has given a contract worth 849 million rupees (US$18.4 million) to ITI Ltd. for upgrading its CDMA network, showed a notice on BSNL's Web site. ITI, a state-run telecommunications equipment maker, will upgrade the software for BSNL's mobile switching centers by the end of February next year. A mobile switching center is a unit of the wireless telecom equipment and routes mobile phone calls from one telecom tower to another. The upgrade will allow BSNL to offer full roaming to its CDMA users across the country. The company can only offer mobility within a telecom service area. ITI has partnered with the Indian unit of ZTE Corp., a Chinese telecom equipment supplier for the BSNL contract.

- Telecommunications Consultants of India Ltd., or TCIL, has invited bids for appointing valuers to assess the net worth of its stake in Bharti Hexacom Ltd. State-run TCIL holds 30 percent of unlisted Bharti Hexacom while the remaining stake is with Bharti Airtel Ltd., India's largest mobile-services provider by subscribers. The move to appoint valuers comes after the federal government late August approved the exit of TCIL from Bharti Hexacom, which offers telephony services in six of India's 22 telecom service areas such as Rajasthan and some northeastern states.


- PT Telekomunikasi Indonesia said its operating revenue in the first nine months of this year may increase by about 5 percent due to an increase in subscribers. The slight increase in the revenue could drive the company's net profit higher but didn't give a percentage. Telkom, which has a 65 percent stake in PT Telkomsel had 86 million subscribers at the end of September, up 42 percent.

- PT Telekomunikasi Indonesia will increase its focus on information, media and educational entertainment services, aiming over the next five years to nearly triple its share of industry revenue from the three sectors. Telkom will allocate about US$2 billion for capital expenditure this year, and a similar amount for 2010, which will be used to fund acquisitions and expand its business organically. Telkom may also seek strategic partnerships in the three sectors. Telkom hopes by 2014 to increase to 60 percent its share of industry revenue from the information, media and educational entertainment sectors. Telkom currently has about a 22 percent share of revenue in those sectors. Telkom's shift in strategy will also comprise the divesting of units that don't contribute to its core business.


- Malaysia's Media Prima Bhd. may soon sell its loss-making 70 percent-owned unit Primedia to Philippine Long Distance Telephone Co. (PLDT). The Malaysian free-to-air TV station has so far recognized accumulated losses of 68.1 million ringgits (US$20.2 million).


- MobileOne Ltd. said that its third-quarter net profit fell by a marginal 0.7 percent due to lower service revenue. Net profit for the quarter ended Sept. 30 was S$34.2 million (US$24.5 million). Operating revenue for the quarter was S$188.4 million (US$135.2 million).


- Thailand's National Telecommunications Commission said that the minimum price tag for the upcoming auction of 3G telecommunications service licenses will likely be below 10 billion baht (US$300.3 million). The NTC commissioner said the NTC isn't looking to charge a license fee of hundreds of billions of baht for the 3G service. The NTC targets to auction four 3G licenses in the second week of December. The commission has finalized details of the auction documentation and related regulations, which were put to a public hearing late last month. However, there is a risk the auction may be delayed again due to political pressure amid strong opposition by labor unions of state-owned TOT PCL and CAT Telecom, which accused the NTC of lacking legitimacy to call for the auction.


- Geoff Booth, the head of Telstra Corp.'s National Broadband Network engagement team, believes an agreement acceptable to both the company and the Australia government can be reached on the planned A$43 billion (US$39.6 billion) network. Booth reiterated that the company supports the government's vision to build the new network, and has been in talks with the government and NBN Co. the company set up to run the new wholesale-only network for some time. Many analysts expect Telstra to sell large parts of its fixed line network, including pits and ducts, to NBN Co. The new fiber network will eventually leave large parts of Telstra's copper network redundant.

Topic: Research / Industry Report
Source: IRG

Sectors: Media & Marketing, IT Individual, Wireless, Apps
From the Asia Corporate News Network

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