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Newsletter e-business Center PwC&IESE
ICT Impact Analysis on Organizations and Their Surrounding Environment

http://www.ebcenter.org
16-31st July, 2005
ZOOMING IN
Telefónica Takes a Stake in China Netcom
Commentary by Josep Valor, IESE professor
REPORTS
Children and Adolescents Lead Older People to Use ICT
TREND HUNTER
Mobile Tones, Now With a Built in Excuse
Europe Rejects Patents, for the Time Being
Yes to Home Theater, But How?
 
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ZOOMING IN
Telefónica Takes a Stake in China Netcom
César Alierta, the President of Telefónica, recently announced that the Group intended to enter the Chinese telecommunications market now that the Chinese government is partially opening up the sector to liberalization. That mission has just been accomplished. Telefónica paid out 240 million dollars for 2.99% of the China Netcom Group (CNC). This stake will soon rise to 5%, for which Telefónica will hand over another 160 million euros. Their aim is to set up a strategic deal to collaborate on different fronts and place a Telefónica representative on the Chinese operator’s board.
A few months ago Telefónica opened an office in Peking but now is when the Spanish operator really starts to take on the most powerful market in the world. Although the initial percentage could seem tiny, nothing is really small in a country with 1,300 million inhabitants.

Commentary by Josep Valor, IESE professor

With a client base of about 90 million subscribers, China Netcom Group Corporation (CNC) is the second fixed line telecommunications operator in China, behind China Telecom. This makes Telefonica’s new stake in China Netcom something to keep in mind, although for now the stake is just under 3%.

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REPORTS
Children and Adolescents Lead Older People to Use ICT

Title: Infancia y adolescencia en la Sociedad de la Información
Source: Observatorio de las Telecomunicaciones y de la Sociedad de la información Red.es
Date: June 2005
Abstract: Homes with children and adolescents are much more likely to intensively use ICT. This is what has come to light in a recent Red.es report, which was carried out among a sample of 3,500 homes in Spain.
When there are children in the home, mobile telephones abound (92.8%), while in homes without children this figure drops dramatically (71.9%). On the other hand, 60% of homes with children between 6 and 15 have at least one computer, while in homes without children this figure hardly reaches 40%. However, as one can expect, the greatest differences between one type of home and the other lie in equipment like video consoles and DVDs, which are overwhelmingly present in homes with children.
The report also researches into the individual use of these technologies. Half of the children between 10 and 15 have mobile phones. Between 16 and 17 this figure shoots up to 78.4%, surpassing that of the over eighteens (64.6%). As far as Internet use goes, 83.9% of adolescents have surfed the Net at some time; 66.3% of children have also done so. However, more than half of all adults (55.2%) have not surfed at all.
The research includes a benchmark of the average cost per home in ICT services (fixed phone, mobile, Internet and paid TV): homes with children spend 63.1 euros a month, three euros more than homes without children (60.1 euros per month). However, the tendency is inverted when we talk about homes with three or four contracted services. This is due to the fact that the average expense for each service is much less when contracted in packages and by cable, which are by far the most used forms in families with children. All told, the results throw up the existence of a positive correlation between a home with children and the attitude of adults in the face of the new technologies.

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TREND HUNTER
Mobile Tones, Now With a Built in Excuse

Imagine you are late for work. Calling from your mobile phone to say you are stuck in traffic is one option. But if you were to add to that the background noise of a snarling traffic jam, the excuse would sound irrefutable. Background noise, supplied by companies like Olemóvil, forms part of a market that moves around 4,000 million dollars worldwide, of which 300 million dollars can be directly attributed to the United States, according to data from Consect.
The now famous tones and polytones have jumped into the charts and even the croak of the Crazy Frog Axel F went higher than some groups like Oasis and Coldplay, in spite of the fact that online music stores, like Apple’s iTunes, charge 99 cents per song, while mobile phone tone suppliers have been known to change up to three times that price for a 15 second tone.
This user demand for music has forced the phone makers and operators to pay more attention to this market; they have turned mobile phones into genuine MP3 players. However, it seems that the transfer of music files from a mobile phone to a PC is flawed with technical difficulties. This, together with the lack of defined standards, will delay devices like the iPod from being replaced by mobile phones.

Articles in New York Times (Free registry required)
News in BBC

Europe Rejects Patents, for the Time Being

At long last the European Parliament has rejected the directive that allowed the registration of patents for inventions used by computers. This decision could bring to an end the debate that had large enterprises – with the exceptions of Red Hat and Sun – up against small and medium sized companies and associations in favour of open source software.
While the European Information, Communications and Consumer Electronic Technology Industry Association (EICTA) and companies like Alcatel, Ericsson, Nokia, Philips or Siemens insisted that the Directive on Patentability of Inventions used by computers would drive “innovation, employment and investment, those who detracted from the measure stated that it would only restrain innovation in companies with few resources.
Although the aim of the directive was to provide legal security and unify the concession of patents in the European Union, most members of the European Parliament seem to think that the directive does not go far enough to guarantee legal security for patent owners or new inventors. 
It remains to be seen whether this is the end to the question. Although Joaquín Almunia, the Commissioner for Economic and Monetary Affairs, said so, Benita Ferrero-Waldner, the Commissioner for Foreign Affairs, stated that “if the Parliament asks us to put forward a new proposal, we will discuss it and see what our future procedure is like”.

News in VNUNet and Financial Times
Articles in BusinessWeek and eWeek

Yes to Home Theater, But How?

Both Dreamworks, with Shrek 2, and Pixar, with The Incredibles, have had an unexpected setback in the sales of their respective DVDs. Pixar’s shares fell by 14.7% in just one day after the announcement that the sales of their latest DVD were not so incredible as expected. Is this the end of the golden era of DVD?
Hollywood should pay attention to the Internet download phenomenon if it does not want to make the same mistakes as the music industry. The more it ignores the Internet and puts off the arrival of a legitimate alternative, the freer piracy and illegal downloading of films will feel. According to the IDC, film downloading from the Internet has multiplied eightfold in the last two years to reach five million files per day worldwide.
The reaction has come from Morgan Freeman. His production company, Revelations Entertainment, and Intel will set up Clickstar, a service that will enable fee-paying users to download films even before they are launched in DVD. It is the same concept as Apple’s iTunes but for films. Sony also says that it is preparing its own “film iTunes”. Meanwhile, Microsoft is developing a new peer-to-peer (P2P) proprietary technology called “Avalanche” with which it hopes to topple BitTorrent. It seems that some film producers are anxiously awaiting its arrival as this new system, according to Microsoft, could revolutionize the commercial distribution of films (as well as other content) over the Internet.

Articles in News.com, Wired News and Financial Times (Payment service)
News in Usa Today, Yahoo! and Technewsworld 

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