Sat, Aug 28, 2004 - Page 11 News List

Vibo bets big on 3G technology

While many of the nation's major mobile services providers are hesitant to launch high-speed next-generation, or third-generation (3G), services, telecom start-up Vibo Telecom Inc, an arm of contract computer maker Compal Electronics Inc, plans to debut its 3G service by the end of the year. `Taipei Times' staff reporter Lisa Wang spoke about the launch with Chairman Rock Hsu yesterday


Rock Hsu, chairman of Vibo Telecom Inc, discusses the year-end launch of Vibo's third-generation mobile phone services yesterday.


Taipei Times: As the nation's first 3G operator, Asia Pacific Broadband Wireless Communications (亞太行動) is still struggling to turn a profit after more than a year of operation. What makes you believe that time is ripe for Vibo (威寶) to take action now?

Rock Hsu (許勝雄): We think Vibo's rollout by the year's end will be well-timed to coincide with the government's plan to make mobile numbers portable early next year.

That opening-up [which will allow local mobile users to switch telecom operators while keeping their original numbers] will give start-up telecom operators like Vibo a good chance to snare users from the nation's three major players, including state-run Chunghwa Telecom Co (中華電信).

After the new policy takes effect, users will have more choices, without the bother of updating new phone numbers with friends.

With good voice quality, sufficient digital content and optimized wireless coverage, we are confident in luring one million subscribers in the first year after the launch.

In addition, the handset problem, which has capped Asia Pacific Broadband's business last year, is resolving. We have numerous handset suppliers from South Korea, Europe and the US. And we also hope that Compal Electronics will start making our own 3G handsets next year.

With the macro environment improving, we hope Vibo can break even within two years of starting operations.

TT: The government has not yet decided about an auction of 3G licenses based on CDMA2000 technology. Will the license problem hamper Vibo's commercial launch by year's end as planned?

Hsu: Of course, we hope that the government will auction off licenses. We're very interested in making an offer. But Vibo will only be able to commercially launch by the end of the year if the problem is resolved by October. We can start operating as soon as we get the license. We have already scouted 4,000 sites around the nation for a planned 2,000 to 3,000 base stations. And we have been in discussion with telecom equipment suppliers. All we need now is a CDMA2000 license.

Facts about Vibo Telecom Inc

* Establishment: April 17, 2000. Before August last year, it was known as Taiwan PCS Network Inc.

* It won its first 3G license through auction in Feb. 2002

* Paid-in capital: NT$10 billion

* Major shareholders: 53-percent owned by Hsu's Kinpo Electronics Inc and Compal Electronics Inc. China Development Financial Holding Corp, Fertilizer Co, Chiao Tung Bank and Yulon Motor Co hold the rest.

* Fund-raising plan:

-- seeking strategic partners through a NT$5 billion rights issue at NT$10 per share

-- a NT$7 billion syndicated bank loan by year's end

TT: Any backup plans? Is consolidation with industry also-ran Asia Pacific Broadband one of your options?

Hsu: We will not rule out the possibility of a strategic alliance in order to unveil 3G service. There is the possibility that Vibo may rent part of Asia Pacific Broadband's frequency channel for the launch, but only if the government stubbornly resists issuing us [another 3G licence.]

Since Vibo also has a 3G license based on WCDMA technology, we will keep our operations flexible. According to the government's rules, we can keep the license for 15 years after receiving it through an auction in early 2002.

TT: Why switch to the CDMA2000 standard, which only the company Asia Pacific Broadband has adopted, instead of the WCDMA system used by Taiwan's three major telecom carriers?

Hsu: More than two years ago, we opted for high-speed WCDMA technology because we thought it would be a natural move for GSM system operators -- which made up a hefty 60 percent of the world's 120 million mobile subscribers -- to transit to next-generation mobile services.

Things are changing over time. We believe, according to our survey, that CDMA2000 technology has outpaced WCDMA in terms of stability and become the world's most widely adopted 3G technology.

In addition, we also found that transition of 2G telecom operators using GSM systems has not gone as smoothly as we had thought.

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