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Taiwan Telecommunications Report Q4 2011
Business Monitor International, Oct 2011, Pages: 111
BMI's Q411 update on Taiwan's telecommunications market incorporates new operational and financial data from the country's leading telecoms operators – Chunghwa Telecom, Taiwan Mobile, and FarEasTone – for Q211, as well as ad hoc data published by APBW. In addition, the report refers to the most recent market data published by the regulator, the National Communication Commission (NCC), up to the end of June 2011 for mobile and broadband sectors.
In Q211, BMI calculates that there were 29.337mn mobile subscribers in Taiwan, representing a y-o-y market growth of 5.6%. This growth is slower than in previous years, a sign that Taiwan's mobile market has moved beyond an initial phase of rapid expansion to slower growth and eventual stabilisation.
As market penetration is well over 100%, operators are turning to new technologies, VAS, handsets, and data packages to gain subscribers. Pricing pressure is intense, not least because a large majority of users are on postpaid packages and are keen to obtain the best deals. Given the market's steady growth, and in light of operators' data, BMI has raised its market forecasts this quarter and calculates that there will be 31.2mn mobile subscribers in Taiwan by the end of our forecast period, in 2015.
Subscribers continue to favour 3G handsets and contracts over 2G, and this is the sector that is experiencing most growth. While progression to a 4G network is not expected until 2014 or 2015, some operators are already trialling LTE networks, including Chunghwa with Alcatel-Lucent – trials were completed in April 2011 – Fitel in collaboration with China Mobile and Global Mobile announced its plans to switch from WiMAX to LTE in May 2011. Major operators are also looking beyond traditional mobile services, with the three leading players all announcing investments in cloud computing offerings.
In other developments, Chunghwa Telecom signed a contract with Ericsson to design, implement, and deploy a new IPTV platform – one that will replace Chunghwa's existing IPTV offering and that will offer content on computers, televisions, tablets, and mobile phones. Chunghwa aims to launch the new service before the end of 2011.
Following calls by the Taipei Computer Association for Taiwan's six WiMAX operators to merge, Vee TIME announced it plans to acquire VMAX Telecom for TWD1.45bn. The move will make Vee TIME the first WiMAX operator with national coverage. The deal is subject to regulatory approval.
In the broadband market, mobile broadband connections accounted for the majority – 76% – of all broadband subscribers in Q211. In network developments, in September 2011 the regulator, the NCC, granted approval for Chunghwa Telecom's proposal to lay a submarine cable between Kinmen in Taiwan to Xiamen in China. The move – partly funded by Chinese telecoms operators – will improve the cost of data traffic and data services, as they are currently re-routed through third-party countries. Chunghwa expects that deployment of the submarine cable will be completed by the end of March 2012.
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