Tom Outdoor Media Group is offering low-cost licensing agreements to attract second-tier city partners as a strategy to defend its market share when the mainland opens its advertising sector at the end of the year. 'We will leverage on the strength of Tom's branding in exchange for a majority shareholding in second-tier city outdoor media firms,' Tom Outdoor president Li Jian said yesterday. 'It is too expensive for Tom to acquire new companies through equity investment as it would take time to consolidate and integrate the business. 'By using branding licensing agreements, Tom does not have to invest cash in the companies but can share their revenue and profit, so it is a relatively low-risk model.' Tom will be the first company to introduce such agreements to extend its business. Mr Li said Tom Outdoor already had five companies interested in a branding agreement and expected profit of about $10 million on revenue of $70 million from each one. Tom Outdoor's revenue was $369 million last year, a rise of 24 per cent over 2003. The agreements are a departure from its strategy over the past few years when it had invested in 14 firms through cash injections and the issuance of new shares. But Mr Li said the firm intended to expand its footprint outside the mainland through acquisitions. 'We need to maintain growth, so we are considering entering the Asian market by extending our coverage to Hong Kong, Taiwan, Japan, South Korea, Malaysia and Australia,' he said. The first acquisition outside the mainland is expected by the end of the year. Tom Outdoor also saw itself as being able to help Asian-based companies 'to enter the China market, as the China story is still very attractive to them', Mr Li said.