KIT digital has signed a letter of intent to establish KIT China in partnership with Morse Chen, founder and former CEO of Greater China's first premium content IP video portal, Webs-TV (now called Yam.com). KIT digital plans to officially launch KIT China in the beginning of the first quarter of 2011.

KIT China is expected to become the vehicle through which KIT digital will manage its business in the Greater China area (China, Taiwan, Hong Kong and Macau), including service of existing clients in the region, deployment of new clients, customer-driven customization of its industry-leading VX-one software solutions, and the establishment of local channel and re-selling partnerships. Over time, KIT China would also serve as a remote development and delivery center for the company's Prague-based research and development team.

Chen would serve as president and chief executive officer of KIT China, bringing with him 19 years of successful entrepreneurship and business creation, and more than a decade of IP video experience. Chen founded Webs-TV in 1999, building it to nearly US$50 million in annual revenue before exiting the business in 2007.

KIT China is expected to be staffed initially by a 30-person local team centered in Taipei and Chengdu, with KIT digital's pre-existing sales offices in Beijing and Taipei becoming part of the KIT China operations.

KIT China is being established to enhance KIT digital's already strong presence in Asia (and its leadership position in Southeast Asia, the Indian subcontinent and Australasia), where its clients include Astro, CNBC, Express News, ESPN Star, ETV, MediaCorp, Google, NDTV, Reliance MediaWorks, Saab, Sahara, Sanitarium, Sensis, Singapore Telecom, Spirit of Tasmania, Suzuki, Tabcorp, Telstra, TV9, VTV and ZeeTV.

Content owners and network operators throughout Asia have been adopting KIT's VX-one platform, helping to accelerate KIT's growth and momentum in the region. According to Cisco's June 2010 Visual Networking Index, IP traffic in Asia Pacific is expected to grow at a compound annual growth rate of 35% for the foreseeable future. "We expect KIT China to substantially enhance our ability to meet this growing customer demand," said Ashish Mukherjee, KIT digital's head of Asia, "and should help us secure several high-profile customer engagements and strategic partnerships in our pipeline."

KIT VX-one, the company's family of end-to-end software platform solutions, enables enterprise clients to acquire, manage and distribute video assets across the three screens of today's world: the personal computer, mobile device, and IPTV-enabled television set. The application of VX ranges from commercial video distribution to internal corporate deployments, including corporate communications, human resources, training, security and surveillance. KIT's global professional services teams implements and integrates next-generation video management systems in the context of traditional broadcast infrastructure, including automated play-out systems, studio fit-out and outdoor broadcasting solutions.

Under the letter of intent's proposed terms, KIT digital plans to invest US$3.0 million in the formation and launch of KIT China. The terms of the agreement call for KIT digital to retain the vast majority shareholding in KIT China while assuming a minority ownership stake in Xun-Jia Technology, a Chengdu-based digital media development company controlled by Chen. The associated transactions are expected to close by January 31, 2011.