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Chunghwa to expand its Internet phone services

"To safeguard our market share [of fixed-line services], we have to expand the Internet phone services. But we won't be aggressive in promoting the services."

Shih Mu-piao, a spokesman for Chunghwa Telecom

Chunghwa Telecom Co (中華電信) plans to extend its Internet phone services to individual subscribers to safeguard its market position following the government's recent deregulation of the telecom market, a company official confirmed yesterday.

Telecom carriers, Internet Portals and Internet-service providers will soon be able to apply to provide clients with Internet phone numbers, which will allow users to make calls at lower rates than traditional phone services.

Local telecom operators and portal Web site operators were allowed to launch Internet phone services in 2001, but no phone numbers were given at the time, which limited the clientele for the voice over Internet protocol (VOIP) services.

"We will apply to offer Internet phone services for all of our subscribers," Chang Feng-hsiung (張豐雄), a Chunghwa Telecom vice president, said in a telephone interview yesterday.

At present the company only provides Internet services, or hiCall, to its corporate subscribers.

Chunghwa Telecom, which offers mobile and fixed-line services, has been cautious about providing VOIP services to individual subscribers, fearing that the cheaper voice services would eat into its fixed-line revenues.

Fixed-line services made up 36 percent of the company's total revenues of NT$138.4 billion during the first nine months of this year, while the wireless phone service accounted for 40 percent.

The firm's share of the fixed-line market recently dropped to 54 percent.

"To safeguard our market share [of fixed-line services], we have to expand the Internet phone services. But we won't be aggressive in promoting the services," said Shih Mu-piao (石木標), a company spokesman.

The popularity of making calls on computers using Skype software has forced local telecom operators to face the challenge of Internet phone services, said Alan Kuo (郭子廉), an analyst with the Taipei-based Topology Research Institute (拓墣產業研究所).

"The quality is good, but the charges are much lower than traditional phone service providers," Kuo said.

"SkypeOut," the Internet phone service offered by PC Home Online (網路家庭), enables users to make domestic or international calls from computers to fixed line and mobile phones for one-eighth to one-third of the price that fixed-line carriers charge.

Taiwan Fixed Network Co (台灣固網) and Internet service provider Seednet (數位聯合) said yesterday that they were very interested in offering VOIP service.

Seednet, which began providing Internet phone service last year without giving a number, has nearly 30,000 users for its Wagaly Talk service now.

The US' largest long-distance phone company, AT&T Corp, saw a dramatic 34 percent slump in revenues in two years in the wake of the Internet phone services, said Cindy Kuo (郭家蓉), an analyst with the Taipei-based Market Intelligence Center (市場情報中心).

"The biggest lure for customers is price," Kuo said.

"But, I don't think Taiwan's existing traditional phone service providers will suffer as big an impact as AT&T did," she said.

Local phone users were in the initial stage of making voice calls on computers, or phones connected to PCs, through the Internet, she said.

But, local companies cannot ignore the global trend to provide Internet phone services, Kuo said.

"It's only a matter of time before they join the game," she said.
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