"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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