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IRG Technology, Media and Telecoms Weekly Asia Market Review
HONG KONG, Oct 01, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Sep 21 - Sept 27. 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.
- Gartner Inc. again brightened its view for global personal-computer sales this year, saying it doesn't expect as big a decline as it estimated in June, when the research firm also raised its outlook for the industry. The company now expects sales to drop 2 percent to 285 million units this year. It had projected a steeper drop of 12 percent. Gartner still expects to see shipment growth in the fourth quarter from a year earlier. Research director George Shiffler cited stronger-than expected demand, especially in the U.S. and China. Mobile PC shipments regained substantial momentum, especially in emerging markets. For next year, Gartner predicted shipments could rise nearly 13 percent as mobile PC growth continues to gain momentum and desk-based PC sales growth turns positive as consumers replace older models. The projection was an improvement from its June view for a 10 percent rise.
- Online games based on the book Romance of three kingdoms made by Korea, China and Japan will compete. Samgukjicheon (Korea), Jukbyeok (China), and KOEI Samgukji Online have started closed test, waging MMORPG competition. The focus is on which nation will dominate the market. Korea will release Samgukjicheon, which will be serviced by Hanbitsoft and developed by GTen Entertainment. The game will begin service in the second half of this year and describe large scale battles between the three nations. The game features realistic battle scenes and differentiated battle system such as horseback battle.
Japan
- Nintendo Co. cut the top-selling Wii's price for the first time and Sony Corp. lowered the cost of buying its PlayStation Portable player in Japan to help revive industry sales. The motion-sensing Wii's price will fall 20 percent to US$200 in the U.S. The PSP will be 15 percent cheaper in Japan and sell for 16,800 yen (US$185). Nintendo became the last of the three major game-console makers to cut prices as the hardware manufacturers bowed to publishers and retailers, who called for cheaper machines to reverse the industry slump. Global sales of the Wii declined for the first time, while Sony sold the fewest number of PlayStation 3 machines in two years. The price of the Wii, introduced in 2006, will be lowered in Japan and in Europe the following day. Sony's PSP in Japan will be cheaper than Nintendo's DSi player.
- Sony Corp. said it will sell 13 million PlayStation 3 worldwide this year after cutting the price of the video-game console. U.S. sales of the PS3 surged fourfold since Sony reduced the price by US$100 to US$300 in August. Sales of the PS3 are also on a massive trajectory in Asia and Europe, About 24 million PS3 consoles have been sold worldwide since their 2006 introduction. Sales of Microsoft's Xbox 360 Elite machine also climbed after the company cut the price by the same amount last month.
- NEC, Casio Computer and Hitachi will merge their mobile handset businesses by next April, creating the second-largest mobile phone production company in Japan after Sharp. NEC is set to be the dominant partner of the merged venture, called NEC Casio Mobile Communications, with a 66 percent stake. NEC will steer the venture's products aggressively into global markets, such as China and the U.S. The founder and CEO of Japanese mobile research, consulting and development firm Infinita, the merger has taken place in an effort to reinvigorate Japan's struggling mobile market. The mobile industry in Japan had faced severe setbacks as foreign handset models have become increasingly popular and the domestic market has reached saturation.
- Willcom Inc., which provides mobile services using a personal handy-phone system, is planning to ask creditor banks to allow a delay in the payment of some 100 billion yen (US$1.1 billion) in debts because of the decreasing numbers of subscribers. To revive its business, Willcom will have to apply for a type of private rehabilitation which combines features of both a court-mandated liquidation and a voluntary liquidation. The company will aim to turn itself around with the help of a third-party body specializing in private rehabilitation while continuing PHS mobile services. Willcom has suffered continuous drops in contracts, registering a net subscription loss of 30,900 in August. Willcom is considering launching a next generation PHS service dubbed "XGP" in October to boost its market share amid intensifying competition among mobile providers. Since the company will have to invest about 140 billion yen (US$1.6 billion) in the project over the next five years, it resorted to the rehabilitation process as the payment of interest-bearing debts will weigh on it as it copes with losses in net contracts.
- Jupiter Telecommunications (Jcom) has seen its total number of subscribers reach 3.24 million in August, up 11.9 percent, or 344,700, year-on-year. Combined revenue generating units (RGUs) for cable television, internet access and telephony services reached approximately 5.84 million, up 657,600 or 12.7 percent since 31 August 2008. The bundle ratio (average number of services received per subscribing household) increased to 1.80 from 1.79 last year and the cable television digital migration rate went up to 86 percent. Jcom ended August with 2.59 million television customers of which 2.24 million are digital television subscribers. The number of internet subscribers went up to 1.55 million from 1.34 million, and the number of telephony customers climbed to 1.70 million from 1.49 million at end-August 2008.
- The board of Japanese communications firm eAccess has approved a bond issue of 3 billion yen (US$33.4 million). The bonds, underwritten by The Bank of Tokyo-Mitsubishi, carry a coupon rate of 0.9 percent and a term of 3.5 years. The bonds will be placed with qualified institutional investors.
Korea
- SK Telecom Co. will have to sell its entire 30 percent stake in SK C&C via the latter's IPO in November to become a holding company in compliance with the relevant regulation. SK C&C, a technology service affiliate of SK Group, last year planned to go ahead with its IPO in June, but delayed its plan because of a severe economic downturn last year. SK Networks, a global integrated marketing company and one of the sister companies of SK C&C, is also considering selling its entire 15 percent in the company through the IPO.
- KT Corp. will invest 142.7 billion won (US$119.4 million) in energy-saving technologies and the environmental improvement of existing telecommunications facilities to become a eco-friendly technology company. The company will cut its greenhouse gas emissions by 20 percent by 2013. The company will also invest in developing eco-friendly services, such as solutions for green automobiles and eco-buildings, cloud computing, green Internet data centers, green mobile communications and smart grids.
- SK Broadband Co. would boost its profit by improving its bundled product line-ups and wireless services. For the second quarter, SK Broadband had net loss of 41.6 billion won (US$35 million). Its operating loss was 20.4 billion won (US$17 million). Sales dropped 4.7 percent.
- South Korea's computer game exports climbed by 40.1 percent in 2008 year on year, reaching US$10.94 billion. It is the sixth consecutive year for South Korea to maintain a trade surplus in the sector. The computer game industry recorded a surplus of nearly US$7.1 billion last year, as imports of game software totaled US$3.87 billion. Among the total exports, 97 percent are online games, rising by 43 percent from the previous year. China was the largest importer of South Korean computer games, which accounted for 27 percent followed by Japan with 21 percent.
- Samsung Electronics remains cautious about the semiconductor sector's outlook even as the industry emerges from its two-year slump. It expects the current shortage of high-end DDR3 chips used in many PCs and other electronic devices to be resolved in the short term. The average selling price of a 1-gigabit double data rate 2 (DDR2) memory chip that runs at 800 megahertz has risen about two-thirds in the past three months. The price of 1-gigabit DDR3 chips, which can handle data faster than the current mainstream DDR2 chip, has risen about a third in the same period. Major shareholders for Hynix Semiconductor have started the sale process for a US$2.75 billion stake in the memory chip maker and are planning to pick a preferred buyer by the end of this year.
- Hyosung Group has submitted a bid for a major stake in Hynix Semiconductor Inc., the world's No. 2 memory chipmaker. Hyosung with business interests ranging from chemicals to heavy machinery was the only bidder for the 28-percent stake estimated at 3.65 trillion won (US$3.04 billion). Creditors claimed four or five domestic companies had expressed their intent to invest in Hynix. Invitations for bids for the combined 28 percent stake in the company were sent to only 43 South Korean companies. KEB will select a preferred bidder by the end of November after conducting due diligence on Hyosung and receiving a final bid from the conglomerate.
- Opera Software announced its partnership with the Korea-based SK Telecom and offer Opera Mini on several of SK Telecom handsets. Initially available in early October 2009, Opera Mini will launch on the T*Omnia II from SK Telecom. The browser will be available on select smartphones and feature phones. Opera Mini is currently the world's most used mobile Web browser, with nearly 30 million users. Its popularity is due in part to its renowned surfing speeds, which is the result of Opera Mini's compression technology that remotely compresses data before sending it to the phone. To celebrate SK Telecom's introduction of Opera Mini to the Korean market, Opera Software's CEO, Jon von Tetzchner, attended a meeting with Joon-Dong Bae, Executive Vice President and Head of Marketing Division at SK Telecom.
India
- AFK Sistema's Indian mobile business has been valued at US$3.4 billion ahead of a possible investment in the company by the Russian government. The latest version of Russia's federal budget has set aside some US$676 million to buy a minority stake in Sistema Shyam TeleServices Ltd. (SSTL). Russia's stake in SSTL could be 20 percent and cost US$680 million using the latest valuation, which was conducted by Avers. Vedomosti cites a Moscow-based analyst who values SSTL at between US$1.1 billion and US$1.4 billion.
- India signed up 15.08 million new mobile subscribers last month, led by Tata Teleservices, which racked up 3.42 million customer additions. The Telecom Regulatory Authority of India (TRAI) released regulations governing the implementation of mobile number portability (MNP) in India, which will now come into force this year. The regulator revealed that operators in India's 'metro' and 'A' telecoms circles will be required to offer mobile number portability from 31 December 2009, while the regulations will apply to the rest of the country from 20 March 2010. The new regulations include the requirement for operators to complete the porting of a subscriber's mobile number within a maximum of four days, with the exception of Jammu & Kashmir, Assam, and the North East circles, where the process may take a maximum of 12 days.
- Reliance Communications Ltd. will have to file a draft prospectus for the initial public sale of shares in its telecom-tower unit, Reliance Infratel Ltd. The company, which is part of Anil Dhirubhai Ambani Group, will offer a 10 percent stake in Reliance Infratel through the IPO. Reliance Communications is reviving its IPO plan for the unit when India's primary market is witnessing fresh activity after more than a yearlong lull, induced by the global economic downturn. Reliance Infratel's IPO plan was scrapped last year, despite getting regulatory approvals, due to weak markets. It had expected to raise 50 billion rupees-60 billion rupees (US$1.0 billion-US$1.3 billion) at that time. Reliance Communications has now indicated an enterprise value of 820 billion rupees (US$17 billion) for the unit. Excluding debt, this implies an equity value of 670 billion rupees (US$13.9 billion).
- Caretel InfoTech Ltd. has received a two-year contract from Mahanagar Telephone Nigam Ltd. (MTNL), to run a call center for the state-run telecom company's wireless users in the western city of Mumbai. Caretel InfoTech will have to initially have around 200 seats at the call center at Navi Mumbai on the outskirts of Mumbai. MTNL provides fixed-line, wireless and broadband services in New Delhi and Mumbai. The company had 2.5 million wireless users at the end of July in Mumbai, data from the telecom regulator's Web site showed.
Philippines
- Philippine Long Distance Telephone Co. saw profit in the third quarter improve from last year. The company reported net profit of PHP6.91 billion (US$145.5 million). Net profit in the third quarter of 2008 was down 28 percent. Smart ended June with 38.5 million mobile phone subscribers, and contributed PHP48.1 billion (US$1.01 billion) to PLDT's total service revenue of PHP72.9 billion (US$1.5 billion) in the first half of this year.
Australia
- Telstra Corp. and Coca-Cola Amatil Ltd. have signed a 10-year telecommunications service contract designed to help the beverage giant increase revenues, reduce costs and improve productivity. It is Telstra's largest exclusive contract in the enterprise and government sector, and will see it provide a range of services to Coca-Cola Amatil's 130 offices in Australia and become preferred provider for its international operations. Technology innovation is a key component of the deal. Several trials are already underway aimed at improving supply chain management for its vending machines and coolers.
- Canwest Global Communications Corp. will have to sell its 50 percent stake in Australia's Ten Network Holdings Ltd. for A$680 million (US$592 million) to help pay off debt. The price sought indicates Canwest is seeking to sell its shares in Australia's third-ranked TV broadcaster at A$1.30 each. Macquarie Group Ltd. is managing the sale, Winnipeg. Unprofitable Canwest, which owns Canada's Global Television network and National Post newspaper, is ending a 17-year investment in Ten as it continues talks with lenders to restructure C$4 billion (US$3.7 billion) of debt. Ten stock has more than doubled since March, buoyed by a rebounding economy and the success of Masterchef, Australia's most-watched TV show this year with 4.1 million viewers for the July 19 final episode. Seven Network Ltd. has seen its shares slump 12 percent. PBL Media's Nine network is the country's No. 2 broadcaster.
Source: IRG
Sectors: Media & Marketing, IT Individual
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