3G service providers move slowly

The nation's major mobile operators are cautiously gauging the right time to unveil data-oriented third-generation (3G) services to avoid the problems facing Asia Pacific Broadband Wireless Communications (亞太行動寬頻), analysts said yesterday.

Asia Pacific Broadband launched the nation's first 3G service last July but the company has failed to reach its target of 700,000 subscribers in the first six months.

"Asia Pacific Broadband's setback doesn't surprise us," said Stevie Chou (周奇賢), a senior analyst with SinoPac Securities Corp (建華證券).

"It's foreseeable that the money-losing telecom company will take longer to get on track due to slow customer demand," Chou said.

Against this backdrop, top telecom operator Chunghwa Telecom Co (中華電信) and smaller rival Taiwan Cellular Corp (台灣大哥大) are guarded about the launch of 3G services.

"We plan to launch the 3G services in the third quarter of this year after several postponements from the first quarter," said Shih Mu-piao (石木標), a deputy chief engineer at Chunghwa Telecom.

Shih blamed limited supply of 3G-compatible handsets for the delays.

Taiwan Cellular is planning to launch its 3G technology in the final quarter of the year at the earliest, company spokesman Cheng Hui-ming (鄭慧明) told investors last week.

"3G service pioneers are those who dare to risk the heavy financial burden," Cheng said.

Chunghwa Telecom plans to more than double the number of base stations to 1,800 by the end of the year and to increase the number to 2,800 next year, which will cost the state-run company NT$11.6 billion, according to Shih.

Taiwan Cellular, the nation's No.3 mobile carrier by subscribers, said it plans to spend NT$3.5 billion, up from an earlier estimate of NT$1.5 billion, on expanding its base stations to 1,650 this year.

Hong Kong-based Hutchison Whampoa Ltd (和記黃埔), headed by billionaire chairman Li Ka-shing (李嘉誠), debuted its 3G mobile services in the UK and Italy in March last year and has since introduced them in Australia, Sweden, Denmark and Austria. It launched the service in Hong Kong in January this year.

But like its Hong Kong counterpart, Asia Pacific Broadband is struggling to reduce its losses.

To achieve its goal, Eastern Broadband Telecom (東森寬頻), parent company of Asia Pacific Broadband, is considering absorbing the mobile service arm to save costs. The company declined to announce financial or subscriber information.

"We have been working on a restructuring between the two companies. We haven't come to a final decision on consolidation yet," said Jessica Chou (周秀芳), director of the Marketing and Communication Division at Eastern Broadband.

Despite the company's efforts to improve its bottom line, Lu Chia-lin (呂家霖), an analyst at Yuanta Core Pacific Securities (元大京華證券), said: "Asia Pacific Broadband is bound to fail, as its 3G technology is incompatible with the nation's three primary players."

Fewer handset choices than more popular W-CDMA technologies adopted by the other three companies and not-so-attractive services will continue to plague Asia Pacific Broadband before the multimedia-oriented services gain popularity in 2006, Lu said.