Wed, Jul 30, 2003 - Page 10 News List

Asia Pacific launches 3G services; analysts shrug

By Annabel Lue  /  STAFF REPORTER

An employee displays the latest 3G cellphones yesterday at the launch of Asia Pacific Broadband Wireless Communications Inc's 3G services. With 3G communication technology, customers are able to enjoy movies or TV programs via their cellphones.

PHOTO: AP

While Asia Pacific Broadband Wireless Communication Inc (亞太行動寬頻) was celebrating its launch of the nation's first third-generation (3G) mobile services yesterday, telecom industry analysts said the high-speed mobile Internet service is not expected to become mainstream in the market in the short term.

"The migration from current mobile service to advanced 3G services is a global trend," said Jason Lin (林一平), a computer science and information engineering professor at the National Chiao Tung University, "however, the local market may not be ready for it at the moment."

Lin said flatly that the chances of 3G services gaining significant popularity in Taiwan by 2005 are very low.

Asia Pacific, a subsidiary of fixed-line phone company Eastern Broadband Telecom Co (東森寬頻), yesterday started to offer the 3G mobile phone services -- such as movie previews, video games, or real-time news reports, targeting its sales especially at young people, businesspeople and professionals.

But Asia Pacific's high 3G handset price may scare consumers away.

Currently, Asia Pacific offers customers the Samsung X789 handset for NT$20,500 and the SK Telecom AP1000 for NT$13,500, plus a two-year subscription.

"It's not necessary for me to spend more than NT$10,000 to buy a new handset and have another phone number," said Elisa Pai, 26, a Taiwan Securities Co (台証證券) employee.

"I only use my cellphone to talk and sometimes send text messages, so I don't need those fancy services," she said.

Consumers' low demand for mobile data service is the major hurdle.

"Taiwanese like to get online, but they prefer to access the Internet at home or at the office rather than on the move," Lin said.

Mobile Internet data services such as sending short messages and checking e-mail from handsets only account for 3 percent of service operators' total revenues.

"Therefore voice service will still dominant local mobile phone market for several years, though we have 3G service now," Lin added.

Meanwhile, another market analyst poured cold water on Asia Pacific yesterday, saying its plan to attract more than 700,000 users by the end of year would be a Herculean task.

"In order to reach that target, the company has to lure more than 12,000 subscribers each month from now," said Nathan Lin (林宗賢), a telecom analyst at SinoPac Securities Corp (建華證券) in Taipei.

But with the local mobile market virtually saturated, room for expansion is limited, he said.

Lin said that even Chunghwa Telecom Co (中華電信), which used to attract around 100,000 new customers every month early last year saw that figure drop to 40,000 users by the middle of this year, a certain indicator of saturation.

Another factor that may hurt new subscriptions to Asia Pacific is that the company offers fixed-number handsets only, Chiao Tung University's Lin said.

Most mobile phones used in Taiwan enable users to change phone numbers by switching SIM (subscription identification module) cards, but Asia Pacific bundles each handset with a specific phone number and customers must go to an Asia Pacific service center to change numbers, he explained.

Only 23 Asia Pacific service centers have been set up around the nation.

"The inconvenience will lower its attractiveness, because people like to use new handsets but to retain the same numbers," Lin said.

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