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Wednesday, 28 October 2009, 21:43 HKT/SGT
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Source: IRG
IRG Technology, Media and Telecoms Weekly Asia Market Review

HONG KONG, Oct 28, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Oct 19 - Oct 25. 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.

- Sales of personal computers in the Asia-Pacific region rose 17 percent from a year earlier to 23.4 million units in the third quarter. Major government contracts in China and Taiwan boosted the July-September sales, which were up 18 percent from the previous quarter. The IDC data, which doesn't include Japan, covers 16 markets including India, South Korea, Australia, Singapore, Malaysia, the Philippines and New Zealand. China's Lenovo Group retained its ranking as the region's number one PC vendor with a market share of almost 20 percent during the September quarter, followed by U.S. based Hewlett-Packard at 18.3 percent.

- Global IT spending will decline 5.2 percent from a year ago to US$3.3 trillion. Garnter had anticipated a 4 percent decline earlier. Gartner expects healthcare, utilities and government IT spending to drive the recovery. Spending won't return to 2008 levels until 2012. IT is recovering rapidly in China due to its own stimulus program. Recovery is not expected in the U.S. anytime soon. Spending in emerging markets might prop the industry next year.

Japan

- Nintendo Co. might reduce its earnings forecast. Annual profit will lessen for the first time in six years due to the fall of Wii console sales and stronger yen. Net income at Nintendo might lessen 11 percent to 249.3 billion yen (US$2.7 billion) this fiscal year, the first drop since the 12 months ended March 2004. The company lowered the price of Wii's in September. Nintendo had 300 billion yen (US$3.3 billion) net income this year. Global sales of the Wii fell for the first time. Sony Corp. sold the fewest number of PlayStation 3 machines in two years.

- Sony Corp.'s PlayStation 3 outsold Nintendo Co.'s Wii console for the first time following a US$100 price cut, helping the U.S. video-game market end six consecutive months of declining revenue. Hardware, software and accessory sales in the world's largest video-game market increased 1 percent to US$1.28 billion last month. Sales of PS3 are more than doubled to 491,800, while those of the Wii declined 33 percent to 462,800. Microsoft Corp.'s Xbox 360 sales gained 1.6 percent to 352,600. Sony's reduction of the PS3 price on August helped reverse an industry slump that had been exacerbated by the absence of new hit games. Industry revenue declined 13 percent through September. Microsoft reduced the price of the Xbox 360 Elite by US$100 to US$300 and Nintendo had 20 percent price cut for the Wii.

Korea

- LG Telecom Co. said its third-quarter net profit fell 6.7 percent from a year earlier, largely because of higher marketing costs. Net profit in the three months ended Sept. 30 fell to 92.7 billion won (US$78.6 million). Its operating profit lessened 9.7 percent. Sales climbed 5.6 percent due to the increase in the number of subscribers for its mobile Internet services. The mobile carrier's marketing expenses in the third quarter rose 25 percent because of the fierce competition among telecom firms. South Korean telecom firms have aggressively stepped up marketing activity in the past few quarters, seeking various ways to boost profits in one of the world's most saturated and fiercely competitive markets, by developing products bundling fixed-line, mobile and Internet services.

- LG Powercom Corp. said its third-quarter net profit declined 54 percent from a year earlier on a rise in marketing fees. Net profit stood at 8.44 billion won (US$7.16 million) in the July-September period, down 54 percent from 18.34 billion won (US$15.4 million) a year earlier. Its bottom line rose 17.8 percent on quarter. The third-quarter bottom line was slightly above a market consensus of 8 billion won (US$6.7 million). Sales climbed16 percent on-year to 374.6 billion won (US$316.5 million) but operating profit sank 51 percent. The smaller-than-expected decline in Q3 earnings and the on-year rise in revenues were attributed to the increased number of subscribers to the company's broadband Internet and Internet phone services. LG Powercom registered the highest net increase of new subscribers among broadband Internet providers during the July-September period. As of end-September, it secured 2.46 million subscribers compared to 2.38 million in the previous quarter.

- LG Dacom Corp, South Korea's No. 2 fixed-line carrier, said that its third-quarter earnings rose 3.2 percent from a year earlier on strong Internet-based business. Net profit recorded at 42.4 billion won (US$36 million) in the July-September period. Its bottom line lessened 7.4 percent on-quarter. Sales increased 17.2 percent on-year to a quarterly record, with operating profit gaining 2.6 percent. The increase in Q3 earnings was attributed to the growth in Internet-based telephone and Internet-protocol television (IPTV) services, as well as its online business units. LG Dacom's Internet-based services division saw the largest annual increase in revenues among its business segments, with sales from Internet phone services and IPTV soaring 76 percent.

- LG Telecom Ltd. said its third-quarter earnings fell less than expected from a year earlier on decreased marketing expenses. Net profit was 92.7 billion won (US$78.7 million) in the July-September period, down 6.75 percent. Its bottom line, however, rose 141.75 percent from the second quarter. The third-quarter bottom line was above a market consensus of 90.4 billion won (US$76.4 million). Sales climbed 5.64 percent on-year but operating profit dropped 9.61 percent. The smaller-than-expected decline in Q3 earnings was attributed to reducedreduce marketing costs and handset subsidies. LG Telecom said that its third-quarter spending was down 14.1 percent from three months earlier.

= SK Telecom has signed an agreement with Bell Laboratories Inc. to jointly develop post-fourth generation (4G) communication technologies. The company said the memorandum of understanding (MOU) calls for merging communication networks with information technology. The tie-up will allow SK to develop key technologies in smart communications networks, expected to lead the next phase in mobile telecommunications. Such an arrangement can lead to greater efficiency and lower costs in services. South Korean companies have led growth in the current fourth-generation wireless technologies and have engaged in aggressive efforts to maintain their edge in the future.

- SDI Co. had its biggest profit in five years due to the record shipments and sales of the product and gains from its mobile-display unit. Third-quarter net income increased 48 percent to 87 billion won (US$75 million). Sales declined 9 percent. Profit from rechargeable batteries might still climb in the next two years. The company might also expand its market share until at least 2011. Bayerische Motoren Werke AG selected SB LiMotive Co. to make car batteries for its electric vehicles for eight years starting in 2013. SDI had profit of 82.9 billion won (US$7 million) on sales of 1.31 trillion won (US$1.1 billion).

- Samsung SDI posted a better-than-expected quarterly operating profit, helped by robust growth in rechargeable battery sales and narrowing losses from its plasma panel business. While the short-term profit momentum is limited due to its unprofitable plasma business and competition in lithium-ion batteries, the South Korean company is set to become a key beneficiary of future growth in electric car batteries and new organic displays for smartphones. Samsung SDI expected demand for lithium ion batteries, used in mobile phones and notebook PCs, to grow 12 percent in the fourth quarter from the third, led by seasonal strength in notebook computers. Global plasma panel demand is likely to increase 13 percent in the October-December period.

- Lotte Shopping will have to acquire Chinese supermarket operator Times Ltd. in order to expand its business in mainland China, reports qq.com citing unspecified Korean media. Lotte announced in a notice on the South Korean Stock Exchange that it will invest US$635 million in a Hong Kong subsidiary for its China business.

India

- Subex Ltd., an Indian telecommunications software and products maker, reported a narrower fiscal second-quarter loss, helped by lower exceptional items and cost controls. Consolidated net loss for the July-September period was 32 million rupees (US$689 million). Net sales fell almost 23 percent. Total expenditure fell 24 percent, helped by lower personnel cost and other expenses. Losses from exceptional items narrowed to 21.90 million rupees (US$471 million). The company said the exceptional items included exchange differences from restatement of foreign currency convertible bonds and intra-group foreign currency loans and advances. Sales at the company's products unit - which accounts for more than three quarters of its total revenue, fell 20 percent.

- Tech Mahindra Ltd. said its second-quarter consolidated net profit fell nearly 44 percent, partly because of interest costs. Net profit in the July-September period was 1.69 billion rupees (US$36.4 million). The company's revenue fell 2 percent. Interest costs during the quarter were 816.2 million rupees (US$17.6 million). The company had no interest cost in the year-earlier quarter. The average of estimates in a Dow Jones Newswires poll of eight analysts was for net profit of 1.63 billion rupees (US$35 million) on revenue of 11.25 billion rupees (US$242 million).

- Sterlite Technologies Ltd. posted a nearly nine times surge in its second quarter net profit, helped by lower costs and a large number of orders as clients shrugged off recessionary woes. The Pune-based company, which makes optic fiber and cables, also said it may raise its EBITDA outlook by 15 percent due to the strong order inflow. Net profit for the July-September period rose to 546.7 million rupees (US$11.8 million). Net revenue in July-September declined 30 percent. Orders, particularly in the power segment, were under pressure in a weak global business environment as clients held back spending due to a lack funds. Sterlite now has greater earnings visibility as clients are taking decisions on projects that were put on hold as a result of the global economic meltdown.

- India's federal Cabinet allowed Norway's Telenor ASA to raise its stake in a telecommunications joint venture with Indian real estate company Unitech Ltd. to as much as 74 percent. The cabinet committee for economic affairs gave approval for Telenor Asia, a unit of Telenor ASA., to raise its stake in Unitech Wireless Tamilnadu Pvt. Ltd. initially to 67.25 percent. The company may take a stake of up to 74 percent subsequently in the joint venture with the investment that is licensed to offer telecommunication services in India. It has licenses to offer services in each of India's 22 telecom service areas. Indian laws require all investment proposals above 6 billion rupees (US$129.1 million) to be approved by the Cabinet, before it is presented to the federal investment promotion body. Federal cabinet approval would allow it to raise its stake.

- Gemini Communications Ltd. has emerged the lowest bidder for a Bharat Sanchar Nigam Ltd. contract to provide equipment for broadband services in rural areas. Bharat Sanchar has shortlisted four companies for the contract and Gemini quoted 9.83 billion rupees (US$211.4 million). China's ZTE Corp. quoted 10.65 billion rupees (US$229.1 million), Harris Stratex Networks Inc. bid 10.94 billion rupees (US$235 million) and Israel's Alvarion Ltd. quoted 11.01 billion rupees (US$237 million). The contract is for supply of 7,000 base stations to Bharat Sanchar for its broadband services based on the worldwide interoperability for microwave access or WiMax technology in rural areas.

Australia

- NBN Co. Executive Chairman Mike Quigley said the Australian government-owned telecommunications company, established to run a planned national high speed Internet network, is looking at all options for potential acquisitions that could kick start the A$43 billion (US$39.6 billion) project. Telstra Corp., Singapore Telecommunications Ltd.'s Australian unit Optus, and Canada's Axia NetMedia Corp., may be interested in participating in the broadband project, potentially by selling existing assets into the network in exchange for equity. Australia's Communications Minister Stephen Conroy told the committee that NBN Co. could make acquisitions even before a A$25 million (US$23 billion) implementation study into exactly how the network will be built, operate and be financed is completed.

Topic: Press release summary
Source: IRG

Sectors: Media & Marketing, IT Individual
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