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2007 Asia - Telecoms, Mobile and Broadband in Taiwan


Attention: There is an updated edition available for this report.

This annual report provides a comprehensive overview of the trends and developments in Taiwan’s telecommunications and digital media markets. Subjects covered include:

  • Key Statistics;
  • Market and Industry Overviews;
  • Regulatory Environment;
  • Major Players (fixed and mobile);
  • Infrastructure;
  • Mobile Voice and Data Markets, including 3G;
  • Internet, VoIP, IPTV;
  • Broadband (DSL, cable TV, wireless);
  • Convergence and Digital Media.


With its strong focus on the role of technology, and telecommunications in particular, throughout its economy, it is not surprising that Taiwan has 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.

There has been a real and continuing boom in telecommunications development. Annual telecommunications service revenues were running at around US$12.5 billion in 2006 and of that around US$7.25 billion was coming from the mobile sector. There is also a hefty ongoing investment in telecoms infrastructure.

Coming into 2007, fixed-line telephone penetration was around 60% and mobile penetration was a little more than 100%. The mobile figure has fallen back from a peak of more than 111% in 2003. In recent years, the highly penetrated mobile market has been experiencing some volatility as the market sorted itself out. The mobile sector was given fresh direction in 2005 with the launch of 3G services by the three major operators. The next generation of mobile services has certainly been presenting a healthy challenge to the market. In fact, the 3G subscriber base has been expanding at an annual rate of around 100%; by end-2006 3G services already comprised 8.5% of the total mobile market. The other important element in the launch of 3G is that it has given a boost to operator revenues. By December 2006, the overall Average Revenue per User (ARPU) for 3G in Taiwan was running at about 30% higher than for 2G.

The broadband market in Taiwan is also one of the more heavily penetrated in the world. With around 90% of households having some form of Internet access, almost 60% of all households have some form of high-speed broadband access to the Internet. DSL provides the dominant platform for the broadband access. Taiwan’s Broadband subscriber base was growing at an annual rate of about 10% coming into 2007.

Given the geographical disposition of Taiwan (a relatively small island inhabited by around 23 million), the government has been keen to explore the best options for maximum broadband coverage. It is not surprising that wireless broadband is being closely examined as one of the solutions. Linking into such a strategy, the government has announced that tenders will be called for six WiMAX licences during 2007. The licences are to be divided geographically between the northern and southern regions: three licences for each region, with one island wide licence under consideration. Chunghwa Telecom, confident of being awarded a licence, has already announced that it selected Alcatel-Lucent to deploy a universal WiMAX network. At the same time, another broadband option, Fibre to the Home (FttH), has not been forgotten. Chunghwa Telecom announced an ambitious capital spending program in early 2007, which included increasing the penetration rate of its fibre-optic network to at least 25% of Taiwan’s households over a five year period. Chunghwa predicted it would sign up almost 600,000 FttH subscribers by the end of 2007, up from around 150,000 at the start of the year.

The role of the government in creating a liberalised telecom market in Taiwan should not be underestimated. First there was the strong push to provide competition to incumbent Chunghwa Telecom and to generally make the market more accessible to new operators. More recently the focus has been on achieving the privatisation of the incumbent. In August 2005, the government concluded its sale of a further 17% stake in Chunghwa Telecom, thereby dropping the government’s shareholding to 48% and formally ending years of struggle to privatise the company. [In Taiwan, a company is deemed to be private if the government owns less than 50%.]

Taiwan’s strategic position with regional telecoms networks was highlighted in a dramatic and unwelcome manner when an earthquake measuring 6.5 on the Richter scale hit southern Taiwan on 26th December 2006. The quake severed three of the Chunghwa Telecom submarine cables, with two subsequent quakes damaging the company’s backup submarine links. The China-US Cable Network (CUCN) and the South East Asia-Middle East-Western European-3 (SEA-ME-WE-3) system were damaged near their Taiwan landing point. The APCN-2 cable was also damaged. Chunghwa Telecom rushed five ships to repair the cables.

Highlights

Taiwan’s overall mobile telephone penetration remains relatively steady at around 100%.
The country’s 3G market has taken off the subscriber base doubling each year for the last two years.
3G services already made up 8.5% of the total mobile market by end-2006.
Almost 60% of Taiwan households have some form of high speed broadband Internet access.
The roll-out of a island-wide fibre optic network by Chunghwa Telecom has begun, with the aim of completion within five years.
Chunghwa Telecom was rolling out its Next Generation Network (NGN) during 2007.
The government said it would call tenders for six WiMAX licences during 2007.
Taiwan’s 3G subscriber growth and market share - 2003; 2006

Year Subscribers (million) Market Share *

2003 0.2 0.8%
2006 1.8 8.4%

(Source: BuddeComm based on Global Mobile data) Note:*Percentage share of total mobile subscriber base.

Broadband subscribers, penetration & proportion of Internet subscribers - 2000; 2006

Year Subscribers (million) Penetration * Proportion of total Internet subscribers 2000 0.1 0.5% 3% 2006 4.5 19.7% 63%

(Source: BuddeComm)

Note:*Penetration = broadband subscribers as a percentage of population.

Data in this report is the latest available at the time of preparation and may not be for the current year.

1. KEY STATISTICS
2. TELECOMMUNICATIONS MARKET
2.1 Overview
2.1.1 Taiwan earthquake - December 2006
3. REGULATORY ENVIRONMENT
3.1 Regulatory authorities
3.2 The 1996 Telecom Bill
3.3 National Communications Commission (NCC) Bill - 2005
3.4 Privatisation of Chunghwa Telecom
3.5 The deregulation process
3.5.1 Liberalised mobile market
3.5.2 Liberalised fixed-line market
3.5.3 Mobile Number Portability (MNP)
3.5.4 WTO membership
3.6 Foreign investment
3.7 Licence fee and rental charges
4. FIXED NETWORK OPERATORS IN TAIWAN
4.1 Fixed network voice services
4.1.1 Market overview
4.1.2 VoIP services
4.2 Chunghwa Telecom Co Ltd
4.3 Eastern Broadband Telecom (EBT)
4.4 New Century InfoComm Tech Co Ltd (Sparq)
4.5 Taiwan Fixed Network Telecom
5. TELECOMMUNICATIONS INFRASTRUCTURE
5.1 National
5.1.1 NGN / IP networks
5.2 International
5.2.1 Submarine cable networks
5.2.2 Satellite networks
6. BROADBAND AND INTERNET MARKET
6.1 Internet
6.1.1 Overview
6.1.2 Public Internet access
6.1.3 Direct Internet access network
6.1.4 TWGate
6.1.5 ISP market
6.2 E-Services
6.2.1 Overview
6.2.2 E-commerce
6.2.3 E-banking
6.2.4 E-government
6.3 Broadband market
6.3.1 Overview
6.3.2 Digital Subscriber Line (DSL)
6.3.3 Cable modems
6.3.4 Fibre-to-the-Home (FttH)
6.3.5 Wireless broadband
6.3.6 Advanced broadband options
6.3.7 Video-on-Demand (VoD)
6.3.8 High-speed ISP services
7. CONVERGENCE
7.1 Overview of media convergence
7.2 Overview of broadcasting market
7.3 Regulatory issues
7.3.1 Cable licences
7.3.2 Cable Audio and TV law 1999
7.4 Digital TV
7.4.1 Cable TV and Pay TV
7.4.2 Satellite TV
7.4.3 Digital Terrestrial TV
8. MOBILE COMMUNICATIONS
8.1 Overview of Taiwan’s mobile market
8.1.1 Mobile statistics
8.2 Regulatory issues
8.2.1 Impact of competition
8.2.2 Low tier mobile licences
8.3 Mobile technologies
8.3.1 Third Generation (3G) mobile
8.3.2 Next generation services
8.3.3 Mobile handset market
8.4 Major mobile operators
8.4.1 Chunghwa Telecom
8.4.2 Far EasTone Telecommunications
8.4.3 KG Telecom
8.4.4 MobiTai Telecom
8.4.5 Taiwan Mobile (formerly Taiwan Cellular)
8.4.6 Asia Pacific Broadband Wireless (APBW)
8.4.7 VIBO Telecom
8.5 Mobile voice services
8.5.1 Prepaid cards
8.5.2 Personal Handyphone Service (PHS) / Personal Access System (PAS)
8.6 Mobile data services
8.6.1 Short Message Service (SMS)
8.6.2 Multimedia Messaging System (MMS)
8.6.3 Wireless Application Protocol (WAP)
8.6.4 General Packet Radio Service (GPRS)
8.6.5 Mobile Internet
8.6.6 Video calls
8.6.7 Push-to-Talk (PTT)
9. GLOSSARY OF ABBREVIATIONS


List of Exhibits


Exhibit 1 - Major broadcasting organisations
Exhibit 2 - Mobile data licence winners


List of Tables


Table 1 - Country statistics Taiwan - 2006
Table 2 - Telecom revenue and investment statistics - 2006
Table 3 - Telephone network statistics - 2006
Table 4 - Internet user statistics - 2006
Table 5 - Broadband statistics - 2006
Table 6 - Mobile statistics - 2006
Table 7 - National telecommunications authorities
Table 8 - Fixed telephone lines versus mobile subscriptions and penetrations - 1997 - 2006
Table 9 - Fixed network operators - market share by revenue - 2006
Table 10 - Chunghwa Telecom subscribers by service - 2006
Table 11 - Fixed lines in service and teledensity - 1995 - 2006
Table 12 - Internet users - 1995 - 2006
Table 13 - Internet subscribers - 1996 - 2006
Table 14 - Internet subscribers by access method - September 2006
Table 15 - Data communications revenue - 2001 - 2006
Table 16 - Broadband subscribers, penetration & portion of Internet subscribers - 2000 - 2006
Table 17 - Broadband subscribers and households - 2006
Table 18 - Broadband subscribers and annual change by access - 2006
Table 19 - DSL subscriber growth - 2001 - 2006
Table 20 - GigaMedia broadband subscribers - 1999 - 2005
Table 21 - Key broadcasting statistics - 2006
Table 22 - Pay TV subscribers by platform - 2002 - 2006
Table 23 - Mobile subscriber growth and penetration - 1995 - 2006
Table 24 - 3G mobile subscriber growth and market share - 2003 - 2006
Table 25 - Mobile services revenue - 1992 - 2006
Table 26 - Mobile services ARPU - 2G and 3G - 2005 - 2006
Table 27 - 3G mobile subscriber growth - 2003 - 2006
Table 28 - Mobile subscribers by operator and annual change - 2006
Table 29 - Subscribers and market share by operator - 2006
Table 30 - Chunghwa Telecom mobile subscribers and annual change - 1998 - 2006
Table 31 - Far EasTone mobile subscribers and annual change - 1998 - 2006
Table 32 - KG Telecom mobile subscribers and annual change - 1998 - 2006
Table 33 - Taiwan Mobile subscribers and annual change - 1998 - 2006
Table 34 - APBW mobile subscribers and annual change - 2003 - 2006
Table 35 - VIBO Telecom mobile subscribers and annual change - 2005 - 2006
Table 36 - Prepaid 2G subscribers - market share - 2000 - 2006
Table 37 - PHS subscriber growth - 2001 - 2006
Table 38 - SMS message volume and revenue - 2001 - 2006
Table 39 - WAP subscriber growth - 2001 - 2006
Table 40 - GPRS subscriber growth - 2001 - 2006

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