The Fair Trade Commission (
"We found that Chunghwa Telecom's 099 charge plan is a cross-subsidy scheme, which is being used to generate more income from its monopoly fixed-network telecommunications (FNT) businesses to cover losses generated from mobile phone calls," said Liu Tsung- Jung (劉宗榮), FTC's vice chairman.
"Such an unfair practice will pose a severe threat to private mobile phone service providers. We have decided to order the Ministry of Transportation and Communications (MOTC) to handle the case, as it supervises Chunghwa Telecom," he said.
"We hope the MOTC can smoothly solve the disputes between Chunghwa Telecom and private mobile phone companies, as we don't want to see the 099-service suspended."
Liu added that the FTC hopes the case can be solved before the two-month trial service period for the multi-use number ends in November.
Nearly 50,000 people have already subscribed to the service, which links up a land-line set, cellular phone, pager and cordless phone with a single account number beginning with `099.'
That means that anyone with a such a number will no longer have to bother to notify friends, colleagues or relatives when they change phones or pagers, or they move -- because their 099 number would stay the same.
Chunghwa Telecom is currently the only FNT service provider in Taiwan -- offering local phone service, long-distance services, and international calls -- although under the MOTC's liberalization timetable, the FNT market will be opened up next year.
Private mobile phones service providers yesterday were quick to hail the FTC's judgement yesterday, with one service provider telling the Taipei Times "justice prevails."
Chunghwa Telecom refused to comment. "We are not in a position to make comments at the present stage as the FTC has ordered the MOTC to be in charge of the case. We have to wait for instructions from the MOTC," said Chang Ke-cheang (張克強), director of the Chunghwa Telecom's business department.
MOTC was also reluctant to comment on the ruling, saying only that it will ask Chunghwa Telecom to appeal the FTC's decision.
The ruling followed a one-month investigation into a complaint filed by private mobile phone service providers, who claimed the 099-charge plan would severely hurt their business.
Under the 099 plan, all phone calls made within a Taiwan area code are charged the same rate -- NT$0.06 per second of air time, or NT$3.6 per minute -- regardless of the type of phone used to make or receive a call.
Private mobile phone companies argued that such an "averaging price scheme" appeared to be a cross-subsidy plan since the NT$3.6 per minute charge is lower than the NT$6 per minute currently charged for a call from a home or office phone to a mobile phone -- although it is higher than NT$1.34 per minute charge for a regular FNT call.
The private companies accused Chunghwa Telecom of using the income generated from 099's higher FNT rate to cover losses from the reduced mobile phone rate offered under the plan.
The commission found that the "average" charge scheme contradicted the spirit of fair trade and "would disturb fair competition in the mobile phone market."
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