Wed, Mar 01, 2006 - Page 12 News List

Mobile users still cool on 3G service

PRICE CONCERNS Vibo Telecom, affected by slow adoption of 3G, said it had fallen short of a goal to attract 100,000 users in its first months of operation

By Jason Tan  /  STAFF REPORTER

For Kelly Chen (陳佩妮), who works as a sales executive at a local exhibition firm, using her two mobile phones to talk to her friends and clients is a daily routine.

The 27-year-old subscribes to a few different service providers, including Chunghwa Telecom Co's (中華電信) GSM high-power system and First International Telecom Corp's (大眾電信) PHS low-power system, and uses each for their specific airtime discounts.

But when asked if she would like to add the latest third-generation (3G) service to her options, she declined without hesitation.

"The calling charges for 3G are just too high compared to the current 2G, and I don't see any practical benefit in using 3G as the content is not appealing at this time," she said.

Users adopting a wait-and-see attitude such as Chen are part of the reason behind the slow growth of 3G in Taiwan, affecting firms like Vibo Telecom Inc (威寶電信).

After three months of operation, Vibo's 3G service had attracted more than 60,000 users as of the end of last month, company president David Wang (王柏堂) told reporters yesterday when opening a new showroom at the Xinyi District in Taipei.

The figure is below the firm's initial three-month goal of roping in at least 100,000 subscribers, a target set before the service was launched in December.

As of January, the nation had only around 160,000 active 3G subscribers (those who have a 3G SIM card and a 3G handset), with Chunghwa Telecom taking the lead at more than 60,000 and Vibo coming in second at 50,000, according to Vibo's estimates.

Vibo, Chunghwa Telecom and Taiwan Mobile Corp (台灣大哥大) have each said they will lure 1 million subscribers by the end of the year, while Far EasTone Telecommunications Co (遠傳電信) is aiming for a base of 800,000 users.

Acknowledging that 3G handset sales have been lukewarm so far, Wang said he expects the uptake of 3G service to accelerate in the second half of the year, as more varieties of handsets will be available at cheaper rates.

"3G transmission still has some technological problems to overcome, such as weaker penetration into the inner walls in homes, putting the reception [quality] slightly behind 2G," Wang said.

But he added that these problems will be improved over time.

Wang said Vibo will post a loss in its first year of operations, citing huge investments made to set up infrastructure and offer handset subsidies to attract subscribers.

Company chairman Rock Hsu (許勝雄) had earlier predicted that it would take two years for the firm to break even.

The first firms to introduce 3G service suffered losses for at least four years due to a lack of services and handsets, Wang said.

But as 3G now has better infrastructure, and offers more content and phones, Vibo hopes to break even within a shorter period, he said.

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