Sony enters high-speed Net market

Sony Communication Network Corp entered the crowded local ADSL market yesterday as part of their strategy to win a piece of Taiwan's rapidly growing demand for high-speed Internet access.

The company -- Sony Network Taiwan Ltd (索尼通訊網路) -- is a joint venture between Japan's Sony Communication Network and KG Telecommunications Co Ltd (和信電訊) of Taiwan. The establishment of this venture, also known as So-net Taiwan, was first announced in April with Sony holding a 85 percent stake.

Sony began offering Japanese consumers Internet service in 1996 and currently has 1.7 million subscribers there.

In early August, a local think tank, the Market Intelligence Center (市場情報中心) under the Institute for Information Industry (資策會), forecasted Taiwan's ADSL user base will grow by up to one million by the end of this year, twice as high as current number.

Eyeing those numbers, Sony chose Taiwan as its first overseas market. "Taiwan is a open market for the telecommunications business, and we foresee an ongoing boom in Internet usage here," said Senji Yamamoto (山本泉二), president of Sony Communication Network.

While So-net Taiwan will serve as an Internet service provider in the beginning, the company aims to become an Internet content provider in the future.

"Entertainment content, such as music, motion pictures and games, are what Sony Group is good at, therefore the synergy of the entire group will back up So-net's content service," Yamamoto said.

According to Yuichi Ejiri (江尻裕一), chief operating officer of So-net Taiwan, the company is planning to collaborate with Chinatrust Commercial Bank (中國信託銀行) for its billing system. "We are scheduled to provide a content payment mechanism in October," Ejiri said.

Ejiri said he hopes to attract 100,000 Internet access subcribers by March of next year, and 100,000 content users as well.

So-net Taiwan currently only provides Internet services in Taipei, Taichung and Kaohsiung, which account for 80 percent of Internet users in Taiwan, he said.

A telecoms pundit, however, said So-net Taiwan chose these regions because of the its ties to KG Telecom.

"Although So-net uses Chung-hwa Telecom Co's (中華電信) ADSL lines for last mile installation, they depend on KG Telecom's [network] backbone for transmission," said Jack Hsu (徐瑞宏), an analyst at the Market Intelligence Center. KG Telecom only has transmission stations in these three regions, he said.

Hsu also expressed doubts about So-net's market share estimates. "So-net's publicity is not as well known as other providers in Taiwan, and 100,000 users would be a major feat for a new market entrant."

According to the center's broadband market forecast, Taiwan Fixed Network Co Ltd (台灣固網), Eastern Braodband Telecom Co Ltd (東森寬頻) and Sparq (速博) are expected to have a combined total of 140,000 subscribers by the end of this year.