Leverage Tri-networks Integration to Create New Business Opportunities
HONG KONG, April 4, 2011 /PRNewswire-Asia/ -- TCL Communication Technology Holdings Limited ("TCL Communication" or "the Company", together with its subsidiaries referred to as "the Group"; HKSE stock code: 02618) is pleased to announce the acquisition of fixed line business from TCL Communication Equipment (Huizhou) Co., Ltd. ("TCL (Huizhou)"), a wholly-owned subsidiary of TCL Corporation, which is the ultimate controlling shareholder of the Company, at a consideration of RMB 120 million. This enables TCL Communication to enter into new fixed line business sector.
This acquisition represents another important milestone for the Company following its recent integration of certain technologies for the production and sales of Mobile Intelligent Terminal Devices (MID). This also underlines the Company's efforts to broaden its business scope and establish a compelling full product line in order to leverage the development of Tri-networks Integration.
The integration of wireless and fixed line businesses is a prevailing trend in the industry that a number of renowned telecommunication operators have begun operating both businesses concurrently. Major world's top-tier operators such as Deutsche Telekom and France Telecom, have approached to the Group of their needs for "Integrated Products", "Cross-over Products" and "One-stop" services, whereas the three major operators in the PRC, namely China Mobile, China Unicom and China Telecom, are also operating in wireless and fixed line businesses. The Group has been engaged in the design and manufacturing of wireless telecommunication equipment in order to capture market demand of the trend. The transaction was an important step for the Group to enter into fixed line market. This initiative serves to meet the needs of the customers and the market as well as to enhance and consolidated strategic partnership and to explore new market potential for business opportunities and profit drivers.
The fixed line business has long been one of TCL Corporation's well-established core business. Currently, the fixed line business of TCL (Huizhou) possesses profitable capabilities. This acquisition will enable the fixed line segment to optimize R&D, production, sales and treasury management to make full use of its expertise in supply chain management, R&D, product design and finance management to allocate right resources of both fixed line and wireless businesses, so as to enhance economies of scale and create synergy. For instance, the Group can utilize its strong R&D team to improve the technology level of its fixed line products, or leverage its experienced European design team to enhance the outlook of fixed line products. The management is confident that the fixed line business will become another competitive profit centre of the Group. Meanwhile, the fixed line business has a solid customer base comprising well-known operators and distributors in the PRC who operate both wireless and fixed line business, which is conducive to the Group's further expansion particularly with regards to its existing customer base and sales of fixed line products in overseas markets through its own sales network to create cross selling opportunities.
The Tri-networks Integration is undoubtedly a brand-new concept in the telecommunication industry in recent years. This refers to the convergence in the course of evolution from telecommunication network, analogue television network and internet to broadband network, digital television network and next internet generation in terms of technical functions, business scope, network interchange and resources sharing, which enable the provision of various services including voice, data and TV to end users. The Tri-networks Integration not only integrates voice, data and video channel business, but also provides more diversified value-added service such as online video, IP phones, video frequency mail, online games, etc, which broadens enormously the business scope of the Group's conventional operations. The accelerated implementation of the Tri-networks Integration will provide more room for growth in the market in respect of industry development and create more business opportunities by enabling cheaper and easier information exchange and applications.
Upon the completion of the acquisition, the Group will obtain the sole and exclusive right to use the trademark of TCL Brand in relation to fixed line telephone and related devices. TCL Brand has strong reputation in consumer electronics market in the PRC, which enables the Group to fill the gap in fixed line brand and open up full range of terminal communication product markets. It can obtain the relevant technology, people and production equipment to further develop advanced and user-friendly products such as home entertainment and communication terminal, smart living and commercial telecommunication terminal as a solid foundation to enter into Tri-networks Integration market.
The Group's financial performance in year 2010 was impressive in terms of sales volume, turnover and net profit with breakthrough achievements. Shipments in the first two months of year 2011 continued to be robust although the Company's management remains vigilant for any changes in the market ahead. We are committed to seeking out new business opportunities and new growth drivers to further enhance our profitability while at the same time maintaining our competitive edge. Tri-networks Integration is undoubtedly an excellent market opportunity. As Dr. Guo Aiping, Chief Executive Officer of the Group, once said, "The Tri-networks Integration is one of the key strategic developments in the PRC in the coming years. As a leading enterprise in the communication technology industry, TCL Communication shall work proactively to capitalize on opportunities arising from the Tri-networks Integration. This acquisition of the fixed line business is only the first step of our plan for entering the Tri-networks Integration market."
About TCL Communication
TCL Communication Technology Holdings Limited (stock code: 02618), together with its subsidiaries design, manufacture and market an expanding portfolio of mobile and internet products worldwide under two key brands - TCL and ALCATEL ONE TOUCH. The Group's portfolio of products is currently sold in the PRC and over 120 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific. TCL Communication operates its highly efficient manufacturing plants and R&D centres in various provinces of the PRC with headquarters in Shenzhen, China. For more information, please visit its website at http://tclcom.tcl.com.
For further enquiries, please contact Hill & Knowlton Asia Ltd:
Email: tclcomm@hillandknowlton.com.hk
| Agnes Suen Tel: (852) 2894 6251 / 9050 5406 |
Bianca Tse Tel: (852) 2894 6319 / 9363 7702 |
