Japanese Tech Stock Weekly Summary

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

Internet

• According to media sources, KDDI Corp. (KDDIF.PK) and Willcom Inc. have secured a license from the Ministry of Internal Affairs and Communications to offer wireless Internet access that is at least 13 times faster than their current offering. With the license, the companies join South Korea's KT Corp. and Taiwan's Far Eastone Telecommunications Co. in offering wireless Internet based on WiMax technology. An earlier report said that Wireless Broadband Planning Inc., a newly established company which is 32 percent owned by KDDI, will invest 144 billion yen (US$1.2 billion) over six yeas to build a network. The other members of Wireless Broadband include Intel Corp., Kyocera Corp. and East Japan Railway Co.

• Internet Initiative Japan Inc. [IIJ] (IIJI) and NTT DoCoMo (DCM) announced entering into a preliminary agreement, which will see IIJ as the first mobile virtual network operator [MVNO] to use DoCoMo’s 3G FOMA network. The sources said details of actual operations are still being discussed. Under the agreement, IIJ plans to offer corporate customers an Internet connection service that supports HSDPA 3.6 Mbps high-speed mobile data communications starting in January 2008.

• According to NTT DoCoMo, InterTouch, a provider of broadband Internet services to hotels, has agreed to acquire MagiNet for US$150 million. NTT DoCoMo is the parent company of InterTouch. The Singapore-based InterTouch at present serves about 400 hotels in 45 countries. The deal is expected to see InterTouch expand its services to about 950 hotels in 63 countries. As part of the agreement, NTT DoCoMo said it will invest US$191 million in InterTouch to provide it with the funds to acquire MagiNet and to service debt. The acquisition is scheduled to be completed in February 2008.

• Rakuten Inc., an online shopping mall operator, disclosed that it would have to contend with an additional cost of 23.8 billion yen (US$210.1 million) for its credit card business to comply with tighter lending rules. Rakuten is not expected to post an annual operating loss with this oneoff charge. The company reported a 19.7 billion yen (US$172.5 million) operating profit in the nine months to Sept. 30.

Mobile/Wireless

• Mobile Content Networks [MCN], the world's leading mobile search management solutions provider, announced the launch of Uta Search, a music search service available from the home page of Yahoo! Japan for Mobile's market leading portal. The company said Uta Search is the first of several Digital Content Search channels that MCN will power for Yahoo! Japan for Mobile. The offering is available to nearly 80,000,000 mobile users across the NTT DoCoMo and KDDI/au wireless networks. Yahoo! Japan for Mobile, a subsidiary of Yahoo! Japan, provides a wide range of Yahoo! Japan portal services to mobile subscribers accessing Wireless Internet services. Ventures/Investments • Dubai International Capital announced that it has bought what it has described as a substantial stake in Sony. The investment firm owned by the Dubai government did not disclose the financial details of the investment. This marks the first time the Dubai fund has made an investment in Japan. Analysts see this move as indicating a trend of the oil-rich states for diversification of their wealth.

Information Technology

• AT&T Inc. (T) announced that it has secured a contract with NYK Logistics, a Japanese logistics and transportation firm, to offer local and long-distance voice services and other communication services to 70 NYK locations worldwide. Industry observers said that the services from AT&T are expected to boost the performance of the firm’s network applications. Under the agreement, AT&T will deploy a Virtual Private Network to connect NYK's global operations. NYK will also utilize AT&T's Managed Internet Service for its operations. NYK Logistics, one of the world's largest shipping companies, provides warehousing and distribution, freight forwarding, supplychain consulting and IT services. The financial details of the contract were not disclosed.

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