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Tuesday, 1 December 2009, 21:00 HKT/SGT
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Source: IRG
IRG Technology, Media and Telecoms Weekly Asia Market Review

HONG KONG, Dec 1, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Nov 23 - Nov 29. 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

- Korea and Japan have a half of the world's patent for mobile communications. In the Asia Pacific Mobile Industry Observatory released by the GSM Association, Korea accounts for 14 percent of the world's patent for mobile communications technology. With Japan which has 36 percent of the world's mobile communications patent, the both countries in the Asia Pacific region sweep the world's patent for mobile technology. The mobile communications industry also made both direct and indirect impacts on job creation. In Korea, the industry created 277,000 jobs, much higher than Australia's 106,000, New Zealand's 19,000, Hong Kong's 37,000 and Singapore's 40,000.

- Toshiba Corp. will grow its Chinese business by at least 10 percent on the year in 2010 according to Takaaki Tanaka, the firm's chief representative in China. Growth of at least 20 percent is targeted for the social infrastructure segment, which includes a power generation equipment business. This is expected to offset a slump in semiconductors and other electronic devices stemming from falling prices. Toshiba aims to boost its market share in China by accelerating the releases of home electronics and personal computers developed in Japan. The Chinese business posted sales 76.8 billion yuan (US$11.2 billion) for 2008.

- The Yomiuri newspaper reported that Softbank may purchase Japanese PHS services provider Willcom on condition that the company's lenders waive a portion of its 93.5 billion yen (US$1.05 billion) debt. Willcom has about 4 million subscribers. Softbank spokesman Katsumasa Tochihara told Bloomberg News that the report was based on speculation. Willcom said in September that it would seek talks with creditors to reschedule debt repayments.

Korea

- LG Telecom Ltd. won shareholder approval to merge with LG Dacom Corp. and LG Powercom Corp. as it seeks to step up competition against KT Corp. and SK Telecom Co. The merger, scheduled for completion by December, will create a company with annual sales of about 8 trillion won (US$6.8 billion) as LG Telecom seeks to lure customers by bundling high-speed Internet with wireless and fixed-line phone services. South Korea's telecommunications industry has undergone consolidation in the past two years as operators attempt to cut costs in a market where more than 90 percent of people own a mobile phone and nine out of 10 homes have broadband Internet connections. LG Telecom sees the venture to aid it pare costs, including marketing expenses, by 0.8 percent to 2 percent of revenue from next year until 2014. LG Telecom said it will offer 2.149 shares for each LG Dacom stock and 0.742 share for every LG Powercom stock.

- SK Telink said that its annual revenue would reach 303 billion won (US$257 million) with the growth driven by the B2B business. The company is expanding its business from the international call, famous with the identification number of 00700, to the B2B market like the line-rental business, the VoIP service and the nationwide identification number for financial institutions.

- The market share of Korean DRAMs is up 7.9 percent with 57.2 percent worldwide. A market survey shows that Samsung Electronics remains at the top with 35.5 percent market share by sales revenue amount in DRAM market in 3Q. Hynix follows with 21.7 percent to record a 20 percent market share for 4th consecutive quarter.

- Samsung Electronics will accomplish Triple Crown this year in shipment, sales revenue and operating profit this year. A market survey reports that Samsung Electronics is only company among global big 5 to expect plus growth in all 3 growth rates. Samsung is seen to record 219 million units in shipments, up 12 percent from a year ago, and 22 percent and 32 percent increases in sales revenue and operating profit. LGE has shown remarkable growth in sales revenue but is seen to show minus growth in operating profit. Top 3 firms like Nokia, Samsung and LG are seen to record surplus in cell phone business this year but Motorola and Sony Ericsson will have deficit. Nokia, Motorola and Sony Ericsson showed less growth in all 3 areas. But only Motorola, which has changed its fundamentals, will have higher growth in operating profit.

- The South Korean government cooperated with the leading semiconductor manufacturers on a project to develop a next-generation memory chip, an effort to help the country maintain its lead in the industry. The project calls for the government to work with Samsung Electronics Co. and Hynix Semiconductor Inc. in conducting research and development to make the world's first spin transfer torque-magnetic random access memory devices. Samsung and Hynix, which effectively control the world's memory chip market, are vying with Japanese companies to become the first to manufacture a STT-MRAM chip. The market for the advanced memory device with faster processing time is projected to top US$53 billion worldwide in the target year. The joint R&D effort will also give the country an opportunity to gain insight into basic technologies that can further buoy the country's world-class competitiveness in the semiconductor industry.

- Creditors of Hynix Semiconductor Inc. will re-invite fresh bids for a major stake in the company next month and accept letters of intent from potential investors by the end of January. The move comes after Hyosung Group, a midsize South Korean conglomerate, decided earlier this month to drop its bid for a 28.07-percent stake in Hynix Semiconductor. Managers for the sale of the chipmaker will send out invitational notices on the Hynix sale. Nine creditors agreed 100 percent on the resale of Hynix Semiconductor. The invitations, as with the previous ones, will be made only to South Korean companies. The chipmaker was put under joint supervision by the creditors in October 2001, when it faced a credit crunch amid a faltering semiconductor business climate. Starting in 2001 and up to 2002, KEB and other creditors injected US$4.6 billion to bail out Hynix by swapping the chipmaker's debts to stocks.

India

- Sistema Shyam TeleServices Ltd. will invest US$3.5 billion over the next 4-5 years to expand its network in India. Sistema JSFC owns 73.71 percent of Sistema Shyam while India's Shyam Group holds 23.79 percent. The remaining stake is held by some minority shareholders. The company will start mobile-phone services in Mumbai and Haryana service areas by Dec. 31. It currently provides mobile services on the CDMA technology in eight of India's 22 telecom service areas and had 2.1 million users at the end of September. On a sale of fresh shares to the Russian government, Rozanov said the company is awaiting the Indian government's approval.

- Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. had a combined 414.7 billion rupees (US$8.9 billion) as cash and bank balances as on Sept. 30. The proposal for BSNL and MTNL to join a consortium bidding for Kuwait's Mobile Telecommunications Co. is in preliminary stage only and has not reached the stage for initiating the process of due diligence. India's Vavasi Group has been looking for partners to buy a stake in Zain and is trying to add the two state-run operators to a consortium that already includes Malaysia's Al-Bukhary group.

Australia

- Telstra Corp. would not pursue with a planned debt issue in the domestic market after investors expressed caution during discussions while the company faces regulatory uncertainty. The potential issue had sent a crackle of excitement through a fixed income market starved of non-financial bonds but a confluence of regulatory upheaval as the government overhauls the country's telecommunications network and investor caution means Telstra won't seek to borrow locally. The development will be a disappointment for advocates of greater diversity in Australia's debt market, which continues to be dominated by bank issuance as non-financial corporates opt to sell debt at cheaper levels offshore. The potential issue was among the most sensitive discussed in the market in some time and comes in the wake of calls from corporate leaders for Australia to deepen its public debt markets to give companies a local currency funding option.

Topic: Research / Industry Report
Source: IRG

Sectors: Media & Marketing, IT Individual, Wireless, Apps
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