Vowing "we will not be out-priced" in the battle to establish a position in Taiwan, Ng Seng Sum (吳省心), chief operating officer at New Century InfoComm (NCIC, 新世紀資通), said customers would be the winners in the coming price war.
"For international telephone service ... customers who register early with us will have a savings of up to 60 percent," Ng said while kicking off the company's operations in Taiwan yesterday.
But the battle for customers making international calls is set to get even bloodier.
None of Taiwan's three fledgling fixed line telecommunications companies have signed an interconnection agreement with state-run Chung-hwa Telecom Co (中華電信), nor do they have the ability to send voice or data out of Taiwan without Chunghwa's blessing.
Chunghwa controls undersea cables which carry the bulk of the nation's international calls.
Without an interconnection agreement, the new fixed-line companies cannot link up with Chunghwa's telephone network, meaning calls cannot be made from a Chunghwa line to a New Century InfoComm line.
Since Chunghwa's 40-year-old network links most homes and businesses here, the new companies currently have access to nobody.
Although companies such as Singapore Telecom Ltd (SingTel,
Chunghwa officials refused to comment on when they might reach interconnection agreements with the three new fixed line companies. New Century InfoComm's Ng said his firm "expects a resolution soon," adding that Taiwan's Directorate General of Telecommunications (DGT,
One industry analyst speculated an agreement would not be reached until April at the earliest -- coincidentally the same time Chunghwa's own international calling rate cuts are set to take effect. Chunghwa has said it will slash international rates by "20 percent to 50 percent," a move analysts say could cost the company NT$6 billion in revenue.
"Chunghwa has cut prices to celebrate our launching, and to consumers this is good news," joked Douglas Hsu (徐旭東), chair-man of New Century InfoComm. "New players in the market have to work much harder," he added.
Chunghwa had a total monopoly on the telecom market until privatization began in 1997.
New Century InfoComm, working under the brand name sparq* (速博), is one of Chunghwa Telecom's three new competitors. The company has already spent NT$10 billion setting up operations in Taiwan, including a network of 150,000 lines put down in the last 10 months.
They anticipate spending far more this year to ramp up their network, and anticipate revenues of NT$5 billion in their first year of operation.
The company plans to roll out eight services, targeting corporate and business customers with calling and data services, including local and long distance calling and Internet services.
Taiwan's fixed line industry is valued at NT$150 billion (US$4.6 billion). With a capitalization of NT$47.5 billion (US$1.47 billion), New Century InfoComm is 25.3 percent owned by the Taiwan-based Far Eastern Group (遠東集團) and 24.3 percent by SingTel, its two largest shareholders.
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