The merger between Far EasTone Telecommunications Co (遠傳電信) and KG Telecommunications Co (和信電訊) Tuesday will bring in more competition in the nation's telecom sector, market watchers said.
The proposed merger between the nation's third and fourth largest telecom operators will also speed up the introduction of high-speed wireless mobile phone -- also known as third generation (3G) -- services here, they added.
"Service is absolutely the key for telecom operators to expand market share," said Gary Lai (
The combination of Far EasTone and KG Telecom will create the nation's second-largest mobile-phone carrier after Taiwan Cellular Corp (台灣大哥大), and ahead of state-run Chunghwa Telecom Co (中華電信).
Far EasTone is banking on the merger to establish a close partnership with NTT DoCoMo Inc of Japan, which is a minority stakeholder in KG Telecom and will own 4.9 percent of the combined company. The transaction is expected to be closed by March next year.
"This relationship will add tremendous value to our multimedia mobile services and future 3G related developments," Far EasTone chairman Douglas Hsu (
The deal also benefits DoCoMo, as the agreement provides the Tokyo-based company with a local partner that has a license to provide 3G services in Taiwan, the analyst said.
"DoCoMo has been longing to promote its service, especially the `i-mode' multimedia mobile data service, to Taiwan ... That's why it was keen to push KG Telecom so hard to team up with larger partners like Far EasTone," Lai said.
DoCoMo yesterday also gave a green light to the merger. In a statement on its Web site, the company said it has concluded a memorandum of understanding with Far EasTone to collaborate on the W-CDMA third generation and i-mode mobile phone businesses in Taiwan.
KG Telecom, in which DoCoMo currently holds a 21.4 percent stake, introduced i-mode services in June last year. I-mode allows users to browse the Internet, exchange e-mail and download applications via i-mode handsets. Currently, there are 150,000 i-mode subscribers in Taiwan, the company said.
The agreement will also pave the way for more 3G services to be introduced from DoCoMo in the future, Lai said, saying that DoCoMo launched its FOMA, or Freedom of Mobile multimedia Access, 3G service last week in Japan, which features a downloading speed of 384kbps, and an uploading speed of 64kbps.
Alex Wu (
"These services, namely 3G service, should be strong enough to persuade consumers into going through the hassles of switching their phone numbers," Wu said.
But the Far EasTone's 3G timetable is yet to be fully worked out, as the acceptability of 3G services by Taiwanese consumers is still low, analysts said. Companies need to educate consumers by explaining the benefits of 3G, they added.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS