Sat, Mar 09, 2002 - Page 17 News List

Teco, Yuan-Ze may align

TELECOMMUNICATIONS Unsuccessful in its bid for a 3G license, Teco may take a stake in a firm that does have permission to offer high-speed mobile Net services

By Annabel Lue  /  STAFF REPORTER

Appliance maker Teco Electronics Group (東元) may link up with third-generation (3G) license-holder Yuan-Ze Telecom Co (遠致電信) to offer high-speed mobile Internet services, a Chinese-language newspaper reported yesterday.

Teco -- together with Cathay Life Insurance Co (國泰人壽) and First International Computer (大眾電腦) -- may purchase up to 20 percent of Yuan-Ze, according to the report.

Yuan-Ze is a subsidiary of the nation's third-largest wireless operator, Far EasTone Telecommunication Co (遠傳電信). Far EasTone holds an 80-percent stake in the firm, valued at NT$709.6 million.

A Far EasTone official, who requested anonymity, said several rounds of talks have been held with Teco.

Taiwan issued five 3G licenses last month, raking in NT$48.9 billion in fees. Winning licenses were Taiwan Cellular Corp (台灣大哥大), state-run Chunghwa Telecom Co (中華電信), Asia Pacific Broadband Wireless Communication Inc (亞太行動寬頻), Taiwan PCS Network Inc (聯邦電信) and Yuan-Ze.

Teco, which had bid on a 3G license, dropped out of the auction after 180 rounds.

The company isn't new to the wireless market. Teco owns roughly 70 percent of the nation's fifth largest mobile operator, Mobitai Communications Corp (東信電訊), which has 61,000 subscribers and hundreds of wireless base stations in the Taichung area.

Far Eastern Textile Co (遠東紡織), Far EasTone's parent group, owns about 4 percent of Mobitai. Other shareholders include Cathay Life, First International Computer and Japan Telecom.

Meanwhile, under government rules, the five 3G license-holders will be required to pay at least 30 percent of their winning bid by Monday.

According to the Directorate General of Telecommunications, Yuan-Ze and Chunghwa plan to pay the full amount of their bid price in order to avoid bank interest charges.

Taiwan Cellular, Asia Pacific Broadband and Taiwan PCS Network plan to pay the remaining 70 percent in June.

Chinese-language media reports also say Taiwan Cellular may have a merger in the works. Industry insiders speculate that the target is KG Telecommunications Co (和信電訊).

"It's a win-win deal between Taiwan Cellular and KG Telecom," said Tung Chia-chung (董家均), a telecom analyst at Jih Sun Securities Co (日盛證券).

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