A report by Research and Markets entitled Taiwan - Telecoms, Mobile and Broadband revealed that Taiwan has the second highest cable and satellite penetration rate in Asia with nearly 90 percent.
Taiwan has developed one of the most advanced telecommunications networks in Asia. With excellent telecommunications infrastructure in place and the innovative use of breakthrough information technologies, the country continues to be well placed to drive both mobile and data communications services. Annual telecommunications service revenues are around NT$400 billion (US$12 billion) and investment in telecoms infrastructure remains substantial. This translates to an increase of 100% over the 10-year period from 1998 when revenue was near NT$200 billion (US$6 billion).
Headed by what had been a runaway mobile sector which passed 100% penetration in early 2002 (it has since been hovering at around 110%) and a very strong fixed-line telephone sector with a penetration of over 55%, the market continues to find new ways to grow. Taiwan has been very progressive in its efforts to liberalise the telecoms industry and to create a positive regulatory regime. First there was the strong push for competition to Chunghwa Telecom. The focus then moved to privatising the incumbent. Taiwan’s telecoms infrastructure has been upgraded significantly, undergoing a series of network modernisation projects over the last decade.
The proportion of the population who are Internet users has exceeded 65%. Some 80% of all homes in Taiwan own PCs and around 70% of homes have Internet connections. The market has moved rapidly away from dial-up access to broadband, mainly on DSL subscriptions, and over 68% of all Internet connections are broadband. Going into 2009 the broadband penetration had lifted to over 20% with a progressive shift away from xDSL towards FTTx connections. This has been driven by significant price cuts as operators strive for market share by aggressively competing with the dominant incumbent.
Taiwan has multiple mobile operators. High broadband take-up with the new WiMAX rollout is expected in 2009, which will help contribute to higher growth and revenue for operators in this open economy with relatively low levels of corruption. In addition there is a growing proportion of data services as a percentage of revenues, as the take-up for 3G increases. 3G subscribers now account for 20% of the total mobile subscriber base.
However, many telecoms sub-sectors are at or near saturation which constrain the scope for growth. While the market has been liberalised, there is still limited competition in the local access market which is dominated by Chunghwa Telecom. Overall, there are still low levels of foreign direct investment.
Key highlights:
· Total mobile sector revenues reached US$7.2 billion in 2008 as the highly penetrated market saw operators introducing value-added, higher-margin products. The ARPU for 3G services, while dropping, was still 35% higher than for 2G. Mobile data services increased to over 20%, up from only 2% in 2000.
· Taiwan’s mobile operators signed up more than 8 million 3G handset users by the end of 2008. Chunghwa Telecom had around 3 million 3G users, while Far EasTone (FET) had 2.2 million 3G subscribers and Taiwan Mobile 1.8 million. Smaller operators VIBO and Asia Pacific Broadband Wireless accounted for another million or so 3G users between them. 3G handset users account for more than a third of all mobile subscribers in Taiwan, though many customers with 3G-capable phones are still connected via 2G tariffs, meaning the actual 3G user base is lower than the total given by the operators. For more information, see chapter 10.4, page 61.
· Chunghwa Telecom’s Optical Era Project involves an investment of approximately US$1.8 billion to construct an island-wide fibre optic network over five years. By 2010 it aims to provide fibre access to 2.4 million residential and business subscribers from 700,000 going into 2009. The company expects FTTx to overtake its ADSL platform in terms of service capacity and number of subscribers in 2011. For more information, see chapter 8.5, page 47.
· The government allocated NT$9.6 billion (US$300 million) for WiMAX-related investment under the M-Taiwan project, which ran though 2008. Taiwan expects the total investment in WiMAX networks on the island to reach US$644 million by 2010 and for there to be 8 million WiMAX subscribers by the end of 2010. The government aims to make Taiwan a ‘role model’ for wireless broadband development in Asia. By 2009 the global economic downturn had forced a number of players to hold off launching WiMAX until the second half of the year.
· Over the five years to 2011, the government is expected to appropriate NT$55.6 billion in funds, with NT$11.3 billion for the promotion of new applications that will play a role in the everyday lives of people, such as food, residence, travelling, education and entertainment. Another NT$26.5 billion will be used to promote new e-government related services. The remaining funds will be used to create equal digital opportunities and technology service industries. The key objectives are included in the report. For more information, see chapter 3.9, page 11.
· Chunghwa Telecom set up a US$30 million ‘Internet data joint venture’ with Vietnam’s military-run celco Viettel, as part of its efforts to expand overseas. The company goal is for 20% of the revenue to come from overseas by 2013 and is to invest a total of NT$120 billion (US$3.9 billion) in the next five years to enable this. Chunghwa is also preparing to enter the China market once Taiwan’s telecom companies are allowed to invest in the mainland.
For more information go to http://www.researchandmarkets.com/research/20a722/taiwan_telecoms
