The company said in its mid-year report that it expected the losses would reduce by half in the third quarter from the same period a year ago.

TCL said its mobile phone business had just begun to turn a profit. TCL Communications had sold 5.44 million mobile phones to June this year, up 13 percent from the same period of 2005.

But TCL's television business continued generating losses, although 10.88 million color TV sets were sold in the first half, the world's highest sales with a global market share of 11 percent.

The corporation attributed the sector's losses in Europe to ineffective technical and marketing adjustment and inadequate preparation for the shift from cathode-ray tube technology to flat-screens for the European market.

TCL, based in the southern city of Huizhou, went international after acquiring the television and mobile phone businesses of France's Thomson and Alcatel in 2004. The two deals, however, have put a heavy financial burden on TCL Corp ever since.

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