For investors, especially those who are internationally oriented, one of the most important developments this week is President Bush’s visit to India. As things stand, no one knows what the US wants from India, while the world found last summer that India is mainly interested in receiving US civilian nuclear technology.

To be sure, the president received public advice from the usual suspects, first among them the “serious” British weekly economic publication, which--with its usual pseudo didactic tone--made sure Mr. Bush knew what he should and should not say or "give."

We don't know if the president should listen, as the empire was lost a long time ago. It's doubtful whether British intellectuals remember how to run an empire or, for that matter, remember that in today’s world you must also give not just take, as was customary back in the day.

We'll be writing about the visit and much more on India, its economy, its place in the world and its relationship with the US in upcoming issues. In the meantime, good luck, Mr. President.

Coming off my soapbox, let’s now take a look at some interesting tech-related investment opportunities.

Researching Asia's markets offers, among other things, an excellent opportunity to learn about new developments in the technology sector. One of the newest technologies coming out of Asia is digital mobile TV.

Digital mobile TV has already taken off in South Korea, and will start rolling out around the world next year. It began in 2002 when South Korea-based SK Telecom acquired a million subscribers within eight months of launching its flat-rate streaming-video service. The demand was so high that the company's third-generation (3G) network experienced severe problems and was unable to respond to demand.

South Korea's response was drastic; it invested in a dedicated mobile digital TV network. This new service offers more channels of higher-quality TV than 3G ever could. To refresh your memory, when 3G networks were first unveiled in 2001, streaming video was one of the chief incentives used to lure in new subscribers. Until recently, though, these promises haven't been successfully filled.

The first advanced color handset was the Sony Ericsson T68, which only offered 256-color images in slow motion. Recently, 3G TV service has improved dramatically, with subscribers being able to watch TV on their phones at up to 15 frames per second (fps)--standard TV is 30fps.

Although this is an impressive improvement since 2001 when 3G networks were first unveiled, the service doesn't come close to real TV. If mobile TV continues to add subscribers at the current rate, 3G networks in the US could be overburdened as early as 2007.

The main problem with 3G streaming video is that it eats up cellular spectrum--the video stream has to be duplicated for each person who tunes in. As more people watch, the same amount of bandwidth is being allocated to them. But with mobile digital-TV broadcasting, it makes no difference whether one person or 100,000 people in a given coverage area are tuning in.

The main idea of mobile TV is to directly broadcast digital TV signals to mobile phones (using a totally separate network), just as signals are broadcast to TVs in the house. This way, consumers can receive more channels with better quality, while providers will be able to free cellular bandwidth for other usage. Researchers estimate that by 2010, $7.6 billion will be spent annually on mobile-TV subscriptions.

As with every new application in the telecom/tech area, there are a few different operating standards competing for the new service. South Korea uses the T-DMB (Terrestrial Digital Multimedia Broadcasting), but there are others in Japan, Europe and the US. The good part is that there's extensive overlap among the majority of the standards proposed; therefore, customers won't experience problems like the ones encountered with mobile phone operations in the past.

Despite which system or systems prevail, though, this new market will prove to be promising for semiconductor and handset companies. Texas Instruments (NYSE: TXN) has been active, as have Broadcom (NSDQ: BRCM) and Koninklijke Philips Electronics NV (NYSE: PHG).

On the handset front, South Korean Samsung Electronics (Korea: 005930) and LG Electronics (Korea: 066570) will benefit the most, given the emphasis they've been placing on multimedia phones and the fact that they're ready to offer second- and third-generation TV phones, while their competitors have yet to launch their first.

Taking it a step further, investors should see the telecom and media industries as a continuously evolving one. Specifically, it's quite possible that during the next five years the two industries will become one, offering a suite of products that includes fixed and cellular phone service, as well as TV--in all its forms.

As consumers become more comfortable creating their interconnected/gadget home and life, they'll also demand companies offer total service at good prices and dependable quality.

© 2006 Yiannis G. Mostrous
Editorial Archive

Developed Asia, Western Europe and the US will lead this change. In the latest issue of The Silk Road Investor, we've identified a company in Asia that's at the forefront of this development. Given its growth potential, it should be one of the main winners going forward (see "The Butterfly Effect").