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.
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TABLE OF CONTENTS
1. KEY STATISTICS 1
2. TELECOMMUNICATIONS MARKET 3
2.1 Overview of Taiwan's telecom market 3
2.2 Business environment overview 6
3. REGULATORY ENVIRONMENT 7
3.1 Regulatory authorities 7
3.2 Legislation and market liberalisation 7
3.3 The 1996 Telecom Bill 7
3.4 Ministry of Transport and Communications (MOTC) 8
3.5 National Communications Commission (NCC) 9
3.6 Privatisation of Chunghwa Telecom 9
3.7 Foreign investment 10
3.8 Licensing 11
3.9 National Information and Communication Initiative (NICI) 11
4. FIXED NETWORK MARKET 13
4.1 Market overview 13
5. MAJOR OPERATORS 15
5.1 Chunghwa Telecom Co Ltd 15
5.1.1 Mobile network
5.1.2 HiNet
5.1.2.1 Movie-on-demand
5.2 Far Eastern Telecommunications Group 21
5.2.1 KG Telecom
5.2.2 New Century InfoComm Tech Co Ltd (Sparq)
5.3 Taiwan Mobile (formerly Taiwan Cellular) 25
5.3.1 Taiwan Fixed Network Telecom
5.4 Asia Pacific Broadband Wireless (APBW) 28
5.5 VIBO Telecom 29
5.6 Major cable TV players 30
5.6.1 kbro (formerly Eastern Multimedia Group (EMG)
5.6.2 Taiwan Broadband Communications (TBC)
5.6.3 China Network Systems (formerly United Communications Group)
6. TELECOMMUNICATIONS INFRASTRUCTURE 32
6.1 Submarine cable networks 32
6.2 Satellite networks 33
7. INTERNET MARKET 34
7.1 Overview 34
7.2 Internet hosts 35
7.3 ISP market 35
7.4 WiMAX 36
7.5 E-services 39
7.5.1 Overview
7.5.2 E-commerce
7.5.2.1 Online music
7.5.3 E-government
8. BROADBAND MARKET 43
8.1 Overview 43
8.2 Government initiatives for broadband 44
8.3 DSL 45
8.4 Cable modems 47
8.5 Fibre-to-the-
8.6 Video-on-Demand (VoD) 48
9. CONVERGENCE 49
9.1 Digital TV 49
9.1.1 Broadband TV
9.1.2 Cable and pay TV
9.2 Overview of broadcasting market 51
9.2.1 Television
9.2.2 Digital terrestrial services
10. MOBILE COMMUNICATIONS 55
10.1 Overview of Taiwan's mobile market 55
10.1.1 Mobile statistics
10.2 Regulatory issues 58
10.2.1 Mobile Number Portability (MNP)
10.3 Third Generation (3G) mobile 58
10.3.1 Overview
10.3.2 3G roll-out
10.4 Major mobile operators 61
10.5 Mobile voice services 62
10.5.1 Prepaid cards
10.5.2 Personal Handyphone Service (PHS)/Personal Access System (PAS)
10.6 Mobile data 63
10.6.1 SMS message volume, WAP and GPRS subscribers-
10.6.2 Mobile Internet
10.6.3 Mobile TV
11. GLOSSARY OF ABBREVIATIONS 66
LIST OF TABLES
Table 1-Country statistics Taiwan-2008 1
Table 2-Telecom revenue and investment statistics-2007 1
Table 3-Telephone network statistics-November 2008 1
Table 4-Internet user statistics-November 2008 1
Table 5-Broadband statistics-September 2008 2
Table 6-Mobile statistics-November 2008 2
Table 7-National telecommunications authorities 2
Table 8-Fixed phone lines vs mobile subscriptions & penetration rates-1995-2008 4
Table 9-Call volumes for mobile and fixed networks-1999-
Table 10-International outgoing calls overview-1980;
Table 11-Distribution of telecom revenue by services-2007 5
Table 12-Data communication revenue as proportion of total telecom revenue-2001-
Table 13-Fixed network operators, market share by revenue-2007 13
Table 14-Chunghwa Telecom fixed subscribers and market share-2004-2007 14
Table 15-Chunghwa Telecom's subscriber base by sector-November 2008 15
Table 16-Chunghwa Telecom revenue breakdown by sector-2003;
Table 17-Chunghwa Telecom revenue, CAPEX, net profit and employees-2000-
Table 18-Chunghwa Telecom fixed-line, mobile subscribers & market share-2000-2008 17
Table 19-Chunghwa Telecom market share by segment-2008 18
Table 20-Chunghwa Telecom mobile subscribers and ARPU-2006-2008 18
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LIST OF EXHIBITS
Exhibit 1-Major global/regional submarine cables with landing point in Taiwan-2008 32
Exhibit 2-Taiwan 2.5GHz spectrum winners 37
Exhibit 3-Major broadcasting organisations in Taiwan 52
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