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Local ADSL use surges

A need for speed * The penetration rate for high-speed Internet access in Taiwan rose from 0.7 percent in June 2001 to 4.83 percent in June 2002. * South Korea has the world's highest ADSL penetration rate with 10.95 percent of the population using the service. * Hong Kong is No. 2 with a rate of 5.56 percent.

Taiwan's high-speed Internet penetration rate ranks third in the world, with usage spurred by falling prices, the Institute for Information Industry said in a report late last week.

The ranking for ADSL (asymmetric digital subscriber line) use, put Taiwan ahead of all western countries, only lagging behind regional neighbors South Korea and Hong Kong.

ADSL is used for transmitting digital information at a high bandwidth on existing phone lines. Unlike regular dial-up phone service, ADSL provides an "always-on" connection.

"Over the past 12 months, the number of Taiwanese Web surfers using high-speed Internet connections jumped significantly and the penetration rate rose from 0.7 percent in June 2001 to 4.83 percent in June 2002," said Pan Ming-chun (潘明君), an analyst at the Institute.

According to a report released by UK-based Point Topic Ltd in last month, South Korea has the highest ADSL penetration rate with 10.95 percent of the population using the service, followed by Hong Kong with a rate of 5.56 percent.

Coming in fourth and fifth place were Canada and Denmark respectively.

"Although western countries ... also reported ADSL user-number growth, the change in Asia was most dramatic," she said.

As of the second quarter, more than 1.4 million people in Taiwan were using ADSL -- up 220,000 or 19 percent from the previous quarter.

Market competition and government support are thought to be behind the surge.

"The government opened up the telecom market in mid-2001, allowing new entrants to provide ADSL services. This led to a price war," Pan said.

Once prices started to drop, the penetration rate rose, she said.

The Internet penetration rate is closely related to the level of online activity, Pan said.

"To play games or hold conferences online, a broadband connection is generally required," Pan said.

The local online game industry, Web advertising and e-commerce all have promising outlooks, she said.

Internet portals Yahoo-Kimo (雅虎奇摩) and Yam.com (蕃薯藤) both reported about a 20 percent growth in ad sales for the first half, said Chen Jia-shien (陳佳賢), a researcher at the Market Intelligence Center.

"We estimate that Taiwan's Internet advertising market will reach NT$1.1 billion this year -- that's a 34 percent increase over last year's NT$830 million," he said.
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