To avoid creating a multi-headed hydra capable of unfairly dominating the nation's 3G mobile Internet airwaves, the Directorate General of Telecommunications (電信總局) laid down the law on 3G mobile Internet licenses during an industry meeting last Friday -- one license per group.
Third-generation or 3G telecommunication services are expected to revolutionize the way people access the Internet, allowing the freedom to get e-mail, send pictures, or position oneself on a map with the help of satellites, anywhere in the world.
In Taiwan, where nearly 83 percent of the population already use the mobile phone airwaves to communicate with friends and family, the government plans to release five 3G licenses to industry players through an auction-style process.
The problem that Directorate General officials have run into is that some groups plan to bid for 3G licenses through multiple companies under one commercial entity.
One example of a group with the ability to place multiple bids is the Pacific Wire and Cable Group (太電集團), which counts Taiwan Cellular Corp (台灣大哥大), Taiwan Fixed Network (台灣固網) and Trans Asia Telecommunications Inc (泛亞電信) among its members. Each of these firms would qualify to bid for a 3G license.
But the head of the Directorate General, Jian Ren-deh (簡仁德) is very serious about ensuring that only one license is given out to each group. His office plans to release application rules in August in an effort to head off multiple license efforts before they begin.
He also pledged to work his department around the clock from mid-November to the beginning of December to sift through each application with a fine-toothed comb.
Among the industry players who are building up auction teams, a number of groups appear to be positioning themselves to file more than one application.
The Far Eastern Group (遠東集團), one of Taiwan's largest and oldest business empires, could vie for 3G licenses through New Century InfoCom (新世紀資通) or FarEasTone Telecommunications Ltd (遠傳電信), one of Taiwan's top four mobile phone service companies. In addition, the Cathay Group (霖園集團) could apply for a license alone or through its Taichung-based partner, Mobitai Communications Corp (東信電訊).
Aside from these three conglomerates, other major Tai-wanese firms moving into bidding position include First International Computer Group (大眾集團) (in a consortium dubbed 3GO), state-run Chunghwa Telecom Co Ltd (中華電信), Eastern Broadband Telecommunications Co Ltd (東森電信), KG Telecommunications Co (和信電訊), the Aurora Group (震旦集團) and Savecomm Infocomm (全民電信).
Other foreign bidders interested in Taiwan's 3G license auction include Australia's Telstra and LG Telecom of Korea. Each of these players will have to find a Taiwanese partner, however, as the Telecommunications Act currently limits direct investment in a local telecom firm to 20 percent, and indirect investment to 40 percent via a holding company.
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