Wed, Dec 29, 2004 - Page 10 News List

Wireless providers pursue mobile-phone chain stores

COMPETITIVE MARKET Ahead of the launch of 3G services, wireless firms are in talks with handset chain stores, seeing them as another way to secure customers

By Lisa Wang  /  STAFF REPORTER

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 (中華信評) said in a report last week.

"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 (震旦行) over working together to attract local mobile users to its 3G service next year, Juan said.

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 (遠傳電信) buys into Arcoa Communication Co (全虹), another handset chain, she said.

But Far EasTone spokeswoman Yvonne Lan (藍綺萍) said that no significant progress has been made recently in acquiring the roughly 250-outlet Arcoa.

"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 (林村田) said the launch of 3G service will benefit handset chain stores as mobile operators will count on their intensive networks to provide better customer service to secure subscribers in Taiwan's crowded market.

But, he denied that the money-losing company is in merger talks with Far EasTone.

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