Global Dispatches

European Official Raps German Telecom Plan

BRUSSELS -- A European commissioner last week threatened legal action against Germany if its government passes a telecommunications law as the measure is currently drafted.

The draft law would grant a so-called regulatory holiday to Deutsche Telekom AG, giving the Bonn-based company a temporary exemption from European Union rules designed to open the telecommunications market to competition. The idea behind the proposal is to provide Deutsche Telekom with time to absorb the cost of recent investments.

But in a speech at the Bitcom conference here, Viviane Reding, the European commissioner who is in charge of telecommunications issues, warned that the EC would "start infringement proceedings against Germany if the draft should become law without substantial changes."

"The commission is concerned about all obstacles to competition, whether today, tomorrow or in the long term," Reding said. "We therefore do not accept monopolistic situations, even if we are promised that they would only last for four or five years."

The German move could also trigger copycat actions in other EU countries, Reding said, adding that the approach "sets a very dangerous precedent."

-- Paul Meller, IDG News Service

Vendor Shuts R&D Subsidiary in India

BANGALORE, India -- Pervasive Software Inc., a maker of database and integration software, disclosed last month that it was closing its development subsidiary here and consolidating the operations into its Austin-based facilities.

In a statement, Pervasive CEO John Farr cited the complexity of managing an offshore operation, as well as increasing labor costs and employee turnover. Pervasive also said it plans to hire up to 20 technical workers in Austin over the next several months. The company had employed about 50 people at the unit in India.

The move didn't surprise Siddharth Pai, a partner at Houston-based consulting firm Technology Partners International Inc. Pai said smaller companies such as Pervasive can't easily realize savings from offshore operations. Businesses setting up development or services operations in India often miscalculate the amount of management bandwidth and effort required to make them successful, he added.

Pervasive's withdrawal from India follows a similar decision by Apple Computer Inc., which shut down its Bangalore support center in May, just a month after it opened with 30 staffers.

-- John Ribeiro, IDG News Service

Microsoft Faces Fines Over Antitrust Ruling

BRUSSELS -- The European Commission today will likely propose fines amounting to as much as €460 million ($576 million U.S.) against Microsoft Corp. for failing to comply with an antitrust ruling imposed by the EC two years ago, sources said.

A final decision on the fines could be made by the EC as soon as July 12 if competition regulators from the European Union's 25 member states support the commission's proposal, they said.

The EC ruled in 2004 that Microsoft had abused its dominant position in the operating systems market, partly by denying competitors access to documentation for its Windows protocols. The possible fines stem from a subsequent ruling last December that the software vendor had yet to comply with the EC's mandate that it submit the required technical documentation.

Commission spokesman Jonathan Todd declined to comment on the draft decision but confirmed that its release was imminent.

"Any fine would be unjustified and unnecessary," Horacio Gutierrez, associate general counsel at Microsoft Europe, said in a statement. He added that Microsoft has committed "massive resources" to meeting the requirements of the 2004 ruling and is working to meet a July 18 deadline for handing over the last of seven installments of documentation.

Microsoft could be fined even if the documentation satisfies regulators, said a person close to the case. "Even if they change their ways, that doesn't get them off the hook for the period starting last December," the source said.

-- Paul Meller, IDG News Service

EBay Adopts New Strategy in Taiwan

TAIPEI -- EBay Inc. said it plans to lay off most of its workforce in Taiwan and turn over its local online auction operations to an Internet portal operator based in Taipei.

The San Jose-based company plans to shut down its own auction site in Taiwan and jointly launch a new site with PChome Online Inc. PChome, which will also close its Web site in favor of the new one, will run the day-to-day operations of the joint venture.

"We'll lay off most of our workforce, but some of them may be able to find work at the new company," said a spokeswoman for eBay Taiwan. The unit has about 40 employees.

The spokeswoman declined to say why eBay, which entered the Taiwanese market in 2002 via an acquisition, is now teaming up with PChome. She said that the companies have yet to set a date for starting the joint venture.

-- Dan Nystedt, IDG News Service

Intel Invests in Four Chinese Firms

TAIPEI -- Intel Corp.'s venture capital arm last week disclosed investments in four more companies through its $200 million (U.S.) China Technology Fund, bringing to 12 the number of investments it has made in the country since the fund was set up in June 2005.

The latest businesses that Intel is investing in include Montage Technology Co., a chip designer in Shanghai; Star Softcomm Pte., a vendor of PC management software in Beijing; Winking Entertainment Ltd., a developer of software for 3-D online games in Shanghai; and Campus Media Group Inc., which runs an advertising network in university cafeterias across China.

Altogether, Intel Capital has invested in more than 50 companies in China since 1988.

-- Dan Nystedt, IDG News Service

Briefly Noted

  • Research In Motion Ltd. said it will soon launch its BlackBerry wireless e-mail service in Taiwan, via a deal with Taipei-based Taiwan Mobile Co. Waterloo, Ontario-based RIM wouldn't disclose pricing information or specify a launch date, saying only that the service will become available this summer.

    -- Dan Nystedt, IDG News Service

  • EMC Corp. said it will open a software development center in Shanghai that is expected to employ 100 workers by year's end and 500 by the end of 2008. EMC didn't disclose the planned cost of the new facility but said it is part of an overall investment of $1.2 billion in global research and development.

    -- Steven Schwankert, IDG News Service

  • The Philippine House of Representatives has allotted 100 million Philippine pesos ($1.8 million U.S.) to provide wireless Internet connectivity for the country's lawmakers. In a speech last week at the VoIPCon conference in Pasay City, House Speaker Jose De Venecia said the effort will transform the House of Representatives into a hot spot for wireless voice over IP.

    -- Lawrence D. Casiraya, Computerworld Philippines

  • Nokia Corp. in Espoo, Finland, and Giesecke & Devrient GmbH, a Munich -based maker of smart cards, have set up a joint venture that will develop and operate a secure electronic payments service for cell phone users. The service will support phones equipped with near-field communications technology for short-range wireless transmissions, the two companies said.

    -- Nancy Gohring, IDG News Service

  • Toshiba Corp. said last week that it plans to build a ¥2 billion ($17.2 million U.S.) factory near Bangkok, Thailand, that will make chips for consumer electronics equipment and mobile phones. Construction is scheduled to begin this month and be completed by next March. The Tokyo-based company's Toshiba Semiconductor (Thailand) Co. subsidiary will operate the plant, which is expected to employ about 900 people.

    -- Martyn Williams, IDG News Service

Global Fact

  • $16B: Projected spending on outsourcing in 2010 by companies in the Asia-Pacific region, excluding Japan. Last year's spending totaled $9.58 billion.

Source: IDC, Framingham, Mass.

Compiled by Mike Bucken.

Copyright © 2006 IDG Communications, Inc.

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