Taiwanese wireless telecommunications operators are seeking closer cooperation with handset chain stores to secure existing customers ahead of the debut of third-generation (3G) technology next year, company officials said yesterday.
The next generation technology features rich multimedia functions, and will allow users to surf the Internet, stream real-time videos, watch movies and send data at high speeds.
"Mobile phone chain stores are the most frequently visited places for customers wanting to buy a new handset or to switch operators," Josephine Juan (阮叔祥), spokeswoman for Taiwan Cellular Corp (台灣大), said yesterday. "We will always rely on them to expand our business, especially 3G service."
The wireless telecom market in Taiwan has witnessed significant consolidation in recent years. Given that the market is already saturated, major players are facing a challenge to maintain revenue and earnings growth rates, Taiwan Ratings Corp (
"The market's growth rate is expected to fall to under 10 percent over the next two to three years," according to Taiwan Ratings, the local arm of Standard & Poor's.
To help maintain growth momentum, Taiwan Cellular, the nation's No. 3 wireless telecom service carrier by revenue, has stepped up efforts to open its own stores, called "Myfone," providing services exclusively for Taiwan Cellular subscribers.
Currently, Taiwan Cellular operates 50 Myfone stores around the nation and aims to boost the number to 100 in the near future, the company said earlier this year.
In addition, the company is in final talks with handset chain store Aurora Corp (
Taiwan Cellular is not interested in buying a stake in Aurora, however, which currently operates about 100 stores nationwide.
According to Juan, some Aurora stores are likely to provide exclusive customer service for Taiwan Cellular's customers. This scenario could happen if bigger rival Far EasTone Telecommunications Co (
But Far EasTone spokeswoman Yvonne Lan (
"We have exchanged views over many strategic alliances, including buying a major share of Arcoa," Lan said.
"Arcoa is our biggest channel partner and we certainly hope to extend our partnership to 3G service, as more direct customer service will be needed to give instructions to subscribers on the new technology," she said.
The multimedia-oriented 3G service is more complicated than, and very different from, standard 2G service, which accentuates voice call service, Lan said.
At the least, users will have to know how to use the handsets offered by their operators, as 3G handsets will differ from operator to operator, she added.
Far EasTone currently operates 99 direct stores and would be able to expand this to over 430 if it absorbed Arcoa.
Arcoa chairman Gary Lin (
But, he denied that the money-losing company is in merger talks with Far EasTone.
"We believe the arrival of 3G service will be a boon to mobile phone chain stores. It will also help those companies get out of volatile handset cycles," Lin said.
Chunghwa Telecom Co (中華電信), meanwhile, is expected to retain its dominant market position, according to Taiwan Ratings. The firm's share of the wireless telecom market has fallen to 35 percent, from 100 percent in 1997.
"The earnings contribution from the company's fixed-line business is expected to decrease, while that of its wireless and data-related services is expected to grow in importance," Taiwan Ratings said.
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