2009 Taiwan - Telecoms, Mobile and Broadband

Publication Overview

Taiwan is a country leading in technology use. The report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:

·         Market and industry analyses, trends and developments;

·         Facts, figures and statistics;

·         Industry and regulatory issues;

·         Infrastructure;

·         Major players, revenues, subscribers, ARPU;

·         Internet, VoIP, IPTV;

·         Mobile voice and data markets;

·         Broadband (FttH, DSL, cable TV, wireless);

·         Convergence and digital media.

 

Researcher:- Lisa Hulme-Jones

Current publication date:- April 2009 (15th Edition)

Next publication date:- April 2010

Executive Summary

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.

·         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.

·         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.

·         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.

 

Internet, broadband and telecoms statistics for Taiwan – 2004; 2008

Sector

2004

2008

Internet (million)

Internet users

12.2

15.8

Internet subscribers

8.0

6.0

Mobile Internet subscribers

5.3

13.0

                as % of all mobile subscribers

23.5%

51.4%

Broadband (million)

Total subscribers

3.7

4.7

Penetration rate

16.3%

20.3%

Proportion of Internet subscribers

46.0%

68.0%

DSL subscribers

3.1

3.3

Subscribers to telecoms services (million)

Fixed-line telephone subscribers

13.5

13.1

Mobile phone subscribers

22.7

25.3

                3G subscribers

0.5

5.0

                3G market share of mobile base

2.1%

19.8%

(Source: BuddeComm based on industry data)

 

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

 

For those needing high level objective analysis on Taiwan, this report is essential reading and gives further information on:

·         Chunghwa Telecom’s ambitious CAPEX program, which includes increasing the penetration rate of its fibre optic network to at least 25% of Taiwan’s households over a five year period.

·         The government amendments to Regulations on Telecommunications Universal Service in February 2008, and appointment of Chunghwa, Taiwan Fixed Network and Chungtou Cable Television Co to complete the construction of broadband networks in 50 remote tribal areas and regions in order to reduce the gap for availability of broadband data access services between urban and rural areas.

·         Taiwan having the second-highest cable and satellite television penetration rate in Asia with nearly 90% at end-2008, behind South Korea with 92% – yet average revenue per user was the ninth highest at US$17.07 and most deployments are analogue. Cable operators could drive digital TV penetration to 80% by 2013 and unlock an estimated NT$4 billion through employment, content creation and infrastructure investment. However, there is little incentive for operators to push digital TV in what they feel is an over-regulated sector, which includes price caps.

·         Chunghwa Telecom and SingTel’s joint venture to build a satellite scheduled to be launched in the fourth quarter of 2010. The venture will build the ST-2 satellite to replace the ST-1 satellite. ST-2 has a planned life cycle of 15 years, longer than ST-1’s 12 years and has a higher transmitting power that allows both companies to expand service coverage in Asia, India and the Middle East.

·         Far Eastern Group uniting its three local telecoms businesses – mobile operator Far EasTone, wireline operator New Century InfoComm (Sparq) and ISP SeedNet – into a new holding company, Far Eastern Telecoms Group (FETG).

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview of Taiwan’s telecom market
    • 2.2 Business environment overview
  • 3. Regulatory Environment
    • 3.1 Regulatory authorities
    • 3.2 Legislation and market liberalisation
    • 3.3 The 1996 Telecom Bill
    • 3.4 Ministry of Transport and Communications (MOTC)
    • 3.5 National Communications Commission (NCC)
    • 3.6 Privatisation of Chunghwa Telecom
    • 3.7 Foreign investment
    • 3.8 Licensing
    • 3.9 National Information and Communication Initiative (NICI)
  • 4. Fixed Network Market
    • 4.1 Market overview
  • 5. Major Operators
    • 5.1 Chunghwa Telecom Co Ltd
      • 5.1.1 Mobile network
      • 5.1.2 HiNet
    • 5.2 Far Eastern Telecommunications Group
      • 5.2.1 KG Telecom
      • 5.2.2 New Century InfoComm Tech Co Ltd (Sparq)
    • 5.3 Taiwan Mobile (formerly Taiwan Cellular)
      • 5.3.1 Taiwan Fixed Network Telecom
    • 5.4 Asia Pacific Broadband Wireless (APBW)
    • 5.5 VIBO Telecom
    • 5.6 Major cable TV players
      • 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
    • 6.1 Submarine cable networks
    • 6.2 Satellite networks
  • 7. Internet Market
    • 7.1 Overview
    • 7.2 Internet hosts
    • 7.3 ISP market
    • 7.4 WiMAX
    • 7.5 E-services
      • 7.5.1 Overview
      • 7.5.2 E-commerce
      • 7.5.3 E-government
  • 8. Broadband Market
    • 8.1 Overview
    • 8.2 Government initiatives for broadband
    • 8.3 DSL
    • 8.4 Cable modems
    • 8.5 Fibre-to-the-Home (FttH)
    • 8.6 Video-on-Demand (VoD)
  • 9. Convergence
    • 9.1 Digital TV
      • 9.1.1 Broadband TV
      • 9.1.2 Cable and pay TV
    • 9.2 Overview of broadcasting market
      • 9.2.1 Television
      • 9.2.2 Digital terrestrial services
  • 10. Mobile Communications
    • 10.1 Overview of Taiwan’s mobile market
      • 10.1.1 Mobile statistics
    • 10.2 Regulatory issues
      • 10.2.1 Mobile Number Portability (MNP)
    • 10.3 Third Generation (3G) mobile
      • 10.3.1 Overview
      • 10.3.2 3G roll-out
    • 10.4 Major mobile operators
    • 10.5 Mobile voice services
      • 10.5.1 Prepaid cards
      • 10.5.2 Personal Handyphone Service (PHS)/Personal Access System (PAS)
    • 10.6 Mobile data
      • 10.6.1 SMS message volume, WAP and GPRS subscribers – 2001-2007
      • 10.6.2 Mobile Internet
      • 10.6.3 Mobile TV
  • 11. Glossary of Abbreviations
  • Table 1 – Country statistics Taiwan – 2008
  • Table 2 – Telecom revenue and investment statistics – 2007
  • Table 3 – Telephone network statistics – November 2008
  • Table 4 – Internet user statistics – November 2008
  • Table 5 – Broadband statistics – September 2008
  • Table 6 – Mobile statistics – November 2008
  • Table 7 – National telecommunications authorities
  • Table 8 – Fixed phone lines vs mobile subscriptions & penetration rates – 1995 - 2008
  • Table 9 – Call volumes for mobile and fixed networks – 1999 - 2007
  • Table 10 – International outgoing calls overview – 1980; 1985; 1990; 1995; 2000 - 2007
  • Table 11 – Distribution of telecom revenue by services – 2007
  • Table 12 – Data communication revenue as proportion of total telecom revenue – 2001 - 2007
  • Table 13 – Fixed network operators, market share by revenue – 2007
  • Table 14 – Chunghwa Telecom fixed subscribers and market share – 2004 - 2007
  • Table 15 – Chunghwa Telecom’s subscriber base by sector – November 2008
  • Table 16 – Chunghwa Telecom revenue breakdown by sector – 2003; 2007
  • Table 17 – Chunghwa Telecom revenue, CAPEX, net profit and employees – 2000 - 2008
  • Table 18 – Chunghwa Telecom fixed-line, mobile subscribers & market share – 2000 - 2008
  • Table 19 – Chunghwa Telecom market share by segment – 2008
  • Table 20 – Chunghwa Telecom mobile subscribers and ARPU – 2006 - 2008
  • Table 21 – Chunghwa Telecom mobile subscribers and annual change – 1998 - 2008
  • Table 22 – Chunghwa Telecom Internet subscribers by access type – 2003 - 2008
  • Table 23 – Chunghwa Telecom Internet ARPU by access type – 2003 - 2007
  • Table 24 – Chunghwa Telecom MOD subscribers – 2005 - 2008
  • Table 25 – Far EasTone revenue, EBITDA, CAPEX, net profit and ARPU – 2003 - 2007
  • Table 26 – Far EasTone mobile subscribers and annual change – 1998 - 2008
  • Table 27 – Far EasTone mobile subscribers and ARPU – 2006 - 2008
  • Table 28 – KG Telecom mobile subscribers and annual change – 1998 - 2006
  • Table 29 – Taiwan Mobile financial data and ARPU – 2001 - 2009
  • Table 30 – Taiwan Mobile revenue breakdown per business segment – 2007
  • Table 31 – Taiwan Mobile subscribers and annual change – 1998 - 2008
  • Table 32 – Taiwan Mobile selected operational data – 2006 - 2008
  • Table 33 – APBW mobile subscribers and annual change – 2003 - 2008
  • Table 34 – VIBO Telecom mobile subscribers and annual change – 2005 - 2008
  • Table 35 – Cable subscribers per major operator – 2005 - 2008
  • Table 36 – Internet users and subscribers – 1995 - 2008
  • Table 37 – Internet subscribers by access method – 2007
  • Table 38 – International Internet bandwidth capacity – 2001 - 2007
  • Table 39 – Internet host computers – 2001 - 2008
  • Table 40 – Broadband subscribers, penetration & proportion of Internet subscribers – 2000 - 2008
  • Table 41 – Broadband subscribers and households - September 2008
  • Table 42 – Broadband subscribers and annual change by access – September 2008
  • Table 43 – DSL subscribers – 2001 - 2008
  • Table 44 – Chunghwa Telecom broadband subscribers by technology & market share – 2001 - 2007
  • Table 45 – Chunghwa Telecom HiNet subscriber and ARPU – 2004 - 2006
  • Table 46 – Chunghwa Telecom broadband charges for ADSL and FTTx – January 2009
  • Table 47 – Breakdown of xDSL and cable download speeds – 2007
  • Table 48 – Pay TV subscribers by platform – 2002 - 2007
  • Table 49 – Cable TV operator revenue & investment in select countries – 2004 - 2006
  • Table 50 – Key broadcasting statistics – 2006
  • Table 51 – Media consumption in Taiwan (historical) – 2006
  • Table 52 – Mobile subscribers and penetration rate – 1995 - 2008
  • Table 53 – 3G mobile subscribers and market share – 2003 - 2008
  • Table 54 – 3G mobile subscribers and market share (operator data) – June 2008
  • Table 55 – Mobile services revenue – 1992 - 2008
  • Table 56 – 2G and 3G mobile services ARPU – 2005 - 2007
  • Table 57 – Mobile operators, subscribers and annual change – June 2008
  • Table 58 – Mobile subscribers, market share and ARPU by operator – 2008
  • Table 59 – Mobile net additions by operator – Q2 2008
  • Table 60 – Mobile share by service revenue for top 3 operators – Q4 2008
  • Table 61 – Prepaid 2G subscribers – market share – 2000 - 2007
  • Table 62 – PHS subscribers – 2001 - 2007
  • Table 63 – Mobile data service revenue as portion of total mobile revenue – 2001 - 2007
  • Table 64 – SMS message volume and revenue – 2001 - 2007
  • Table 65 – Mobile Internet subscribers – 2001 - 2007
  • Exhibit 1 – Major global/regional submarine cables with landing point in Taiwan - 2008
  • Exhibit 2 – Taiwan 2.5GHz spectrum winners
  • Exhibit 3 – Major broadcasting organisations in Taiwan
  • Exhibit 4 – Mobile data licence winners
  • Exhibit 5 – Mobile TV trial broadcasters

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