DMX: Venture a merger?

This article's return on investment:
- 3G in China is going to be huge
- DMX will be spending S$5 million this year
- Merger with Venture Corporation possible

"I guess we are wanted."

As DMX Technologies await shareholders to approve Venture Corporation's plan to take a 22 percent stake in DMX, CEO Giang Phung is working out how to use the S$70 million they'll receive.

That shouldn't be too difficult, especially given its focus on the Chinese market.

DMX goes 3G

The introduction of third generation mobile telephony in China is a great opportunity for DMX.

Licenses haven't been issued yet, but mobile operators are already conducting software trials.

"We have some information from reputable sources like China Consulting Group that by 2008, there will be about 170 to 200 million 3G users in China," says Phung.

He adds China is ready to issue 3G licenses soon, and hopes to get some contracts in that arena.

Capex

DMX is also planning to head into India, Thailand and Vietnam. That means they'll be spending a little more money this year.

"We are allocating about S$5 million for the total group," says Phung.

"In terms of setting up an office and entering into a country, it would cost you about a million dollars."

Capital expenditure shouldn't pose a problem to DMX, if they have fresh cash from the Venture acquisition.

Merger with Venture?

So how about a merger with Venture?

Phung thinks "anything is possible."

Without elaborating on future plans between DMX and Venture, he believes companies that deal with communication and technology should work closely together to build on their knowledge.

"We take the opportunity, we measure it, we see the benefits and we go and do," says Phung, "So we're very open to Venture."