TAIPEI -- GigaMedia Limited (Nasdaq: GIGM) continues to restructure and has given up being a consumer Internet Service provider to concentrate on being a content provider, and entertainment conglomerate, seen as a high-margin, high-growth online sector.
Webs-TV Digital International Corporation, a Taiwan digital content provider ("Webs-TV") purchased outright the ADSL business of 62,000 subscribers from GigaMedia in a cash transaction totalling US$17.9 million, including approximately $9.7 million for the ADSL ISP unit and approximately $8.2 million in fees for bandwidth, consulting and other support services payable over a defined transition period.
"GigaMedia" expects to record a significant one-time gain in the second quarter as a result of the transaction.
"The ADSL business was a non-core legacy of the old Giga," explained GigaMedia CEO Arthur Wang. "Today we reaffirm our commitment to build the leading Asian online entertainment company."
Through the end of 2006, the Company expects that revenues generated from the provision of such services will largely offset the decline in broadband ISP revenues resulting from this sale.
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