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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices