Julian Matthews, Kuala Lumpur
Malaysian Internet TV Firm
Lists on Nasdaq
A local company that offers a system to access the Internet via television has listed on the US-based National Association of Securities Dealers Automated Quotation, or Nasdaq, a first for Malaysia. TecnoChannel Sdn Bhd made its debut in February in a reverse takeover of listed Asia Media Communications Ltd (AMC), through a new US$8.5 million common shares issue. As a result, AMC has ceased all its previous operations, assumed its new businesses and will change its name to MyWeb Inc.com pending shareholder approval.
We chose Nasdaq because it is currently the equity market of choice for technology companies and will give us greater recognition and access to global markets, said TecnoChannel chairman Ahmad Mustaffa Babjee. Nasdaq has seen an upsurge in recent months, mainly driven by technology and Internet-related stocks.
TecnoChannel was formed in April 1997 by three National University of Singapore graduates, who invented a software solution called Thunder to enable Internet browsing and e-mailing using televisions, set-top boxes and remotes or wireless keyboards. Philips Consumer Electronics NV, of the Netherlands, currently markets and sells the system under the MyWeb brand name and has an installed base of about 15,000 users in Malaysia and Singapore.
In its first full year of operation in 1998, TecnoChannel recorded revenues of US$1.2 million, with an operating profit of US$200,000, and has no debt. The company expects to ship more than 100,000 MyWeb set-top boxes this year.
Set-Top Box Market
International Data Corp (IDC) estimates that the market for worldwide set-top boxes will explode over the next few years, with over 5 million units to be shipped in 2000 and 11-12 million units in 2002. The growth of Internet usage will be strongest in emerging markets, where annual growth rates of 38% are expected through 2001, fuelled by heavier use of set-top boxes.
A company producing a similar service, WebTV, was purchased by Microsoft Corp of the US in April 1997 for US$425 million. Unlike WebTV, however, MyWeb is focused on emerging markets in Southeast Asia, China, India, and South America; where the flood of new Internet users is more likely to go online using a set-top box and an existing television set, rather than having to purchase an expensive PC.
TecnoChannel also provides a server solution called ThunderServ for Internet service providers (ISP) who wish to offer Internet access via the television, and operates the MyWeb online service which is an Internet portal providing content and e-commerce facilities to users. TecnoChannel expects to derive its revenue from three sources: licensing fees for Thunder solutions from set-top device manufacturers; ThunderServ solutions from ISPs; and advertising and transaction revenue from its portal service.
In March, Asia Media Com-munications announced a licensing and marketing partnership agreement with Sun Microsystems Inc of the US for the use and distribution of the JavaOS for consumer and personal applications, specifically the set-top box market. Both companies will work toward developing and jointly promoting MyWeb solutions to Internet appliance manufacturers and service providers. In addition, Sun will advertise its products and services on the MyWeb portal service.