Japanese Tech Stock Weekly Summary

The following is excerpted from IRG's weekly stock report:

Internet

• According to Informa Telecoms & Media’s World Broadband Information Service [WBIS], fiber to the home [FTTH] connections posted nearly a 10 percent growth in Japan in the second quarter of 20072 to account for 36 percent of broadband connections in the country. The study indicated that FTTH is rapidly displacing DSL in Japan, with the total number of DSL subscriptions in the country is going down by about 1.6 percent. Japan accounts for more than twothirds of the global FTTH market and holds 48 percent of the combined FTTH and FTTP (Fiber to the premises) market, according to WBIS. The report noted that South Korea and Taiwan are the two other countries with large FTTP markets. At present, fiber is also rapidly being deployed in China, with the country having an FTTx capacity of 15 million lines, which can be extended to provide FTTH. In Europe, Italy remains the leading country in the FTTH European market, and accounts for 3.4 percent of global FTTH connections.

• ArrowSpan Inc., a global provider of switching wireless Wi-Fi mesh solutions, announced that CAN Corporation, a Tokyo-based wireless Internet service provider, is using ArrowSpan technology to wirelessly extend its fiber-optic backhaul and deliver high-speed broadband services in Nagasaki-Prefecture. With this move, CAN Corp. is able to reach unserved rural subscribers without the logistics problem ascribed to setting up additional fiber-optic infrastructure. According to industry sources, the Japanese government, which owns Japan’s fiber-optic backhaul infrastructure through its national public utility NTT, sees CAN Corporation’s deployment of ArrowSpan-based switching wireless mesh technology an important test case for other rural areas of the country that still need access to high-speed broadband services. CAN Corporation is the provider of Ninjin-Net, an Internet service that enables residents, businesses and government agencies in rural communities to access and exchange information over a wireless network infrastructure. ArrowSpan Inc. develops and manufactures next-generation switching wireless full-duplex Wi-Fi wireless mesh network solutions.

• According to its CEO, Softbank (SFTBF.PK) is in talks with Alibaba to set up a joint venture as early as next year. According to industry observers, the venture is an important for Alibaba following its IPO of US$1.5 billion. To be based in Japan, the joint venture is seen as bringing Alibaba’s services to mobile customers, an area the company is reportedly interested to tap. The deal is also important because Softbank holds a 33 percent stake in Alibaba group. No details about the size of the investment were disclosed.

Mobile/Wireless

• GreenPeak Technologies, a leader in battery-free communication technology for wireless sense and control applications, announced that it has set up a sales office in Tokyo, Japan. GreenPeak also announced the appointment of Yoshinori Furuno to head the new office as Director of Business Development. Prior to joining GreenPeak Technologies, Mr. Furuno was a regional sales director and country manager with Airgo Networks, where he lead the team in developing and managing strategic customer and partner relationships in Japan. He has also held positions at Agere Systems and Lucent Technologies, where he was instrumental in bringing Wi-Fi to OEMs in Japan and the Asia Pacific region. Formed through the recent merger of Xanadu Wireless and Ubiwave, GreenPeak is a leader in battery-free communication technology for wireless sense and control applications. GreenPeak is based in Utrecht, The Netherlands and has offices in Belgium and Tokyo, Japan. GreenPeak is backed by venture capitalists: DJF Esprit [UK], GIMV (Belgium), Motorola Ventures (U.S.) and Allegro Investment Fund (Belgium).

• Sierra Wireless (SWIR) announced that a Fujitsu (FJTSY.PK) notebook computer to be AirCard Enabled with Sierra Wireless embedded modules is now certified and available for use on the NTT DoCoMo (DCM) network in Japan. With the integrated Sierra Wireless MC8780 embedded module, the new notebook offers the latest in mobile broadband network technology to keep customers connected to the information they need from wherever their travels take them. The announcement said this is the first AirCard Enabled notebook computer to be offered in Japan, and its availability coincides with the commercial launch of NTT DoCoMo's new HSDPA "Flat-Rate Data Plan HIGH-SPEED", which allows customers to purchase data service at a single monthly rate. Sierra Wireless is headquartered in British Columbia, Canada with additional offices in California, London, and Hong Kong. Sierra Wireless posted in 2006 revenues of US$221 million.

• Walt Disney Co. (DIS) announced that it will begin mobile- phone services in Japan in spring next year using Softbank Corp.'s network. The service dubbed Disney Mobile is expected to tap the US$81 billion market. Under the agreement, the companies will work together on handsets, services, content development and marketing.

• According to an official, NTT DoCoMo Inc is set to bid at least US$1 billion for a stake in MobiFone, Vietnam's No.2 mobile phone carrier. Japan’s biggest mobile phone operator is reportedly also interested in making investments in other Asian countries, including China, India, Thailand, Indonesia, and Malaysia. MobiFone plans an IPO in 2008 and has plans to sell a one-third stake as part of its move towards privatization. With the move, NTT DoCoMo joins France Telecom and Singapore Telecommunications, which have expressed a similar interest. In a separate development, NTT DoCoMo said it plans to launch two new tariff plans at the end of this month.

Semiconductors

• NEC Electronics Corp., Japan's third-biggest chip maker, announced that it has made an investment worth some 10 billion yen (US$90 million) to begin production of smaller chips for electronics, which include Nintendo Co.'s (NTDOY.PK) Wii console and Sony Corp.'s (SNE) Bravia TVs. The country’s No. 3 biggest chip maker explained the spending as covering the purchase and installation of an ASML Holding NV lithography machine, a device that burns transistor patterns on silicon wafers.

Telecommunications

• Willcom Inc. of Japan and China Network Communications Group Corp., the second-largest fixed-line telecommunications firm in China, announced their forming of an alliance in PHS (personal handyphone system) operations. Under the partnership, CNC is to receive technological guidance from Willcom with the aim of readying its data communications service for the Chinese market before the 2008 Beijing Summer Olympics. The two companies said they will also talk about an international roaming service in which a subscriber can access the partner firm's PHS network when traveling to another country. At present, there are about 93.3 million PHS subscribers in China. WILLCOM, Inc. is a telecommunications company operating a PHS network covering almost all over Japan, and has the largest share of Japanese PHS market.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.