Due to the growing trend of digital convergence around the globe, Chunghwa Telecom Co (中華電信), the nation's top telecom operator, has a good chance of getting the go-ahead from the national regulator for its controversial broadband television service, analysts said.
Chungwha Telecom is due to submit further clarifications regarding the service to the National Communications Commission (NCC) today, following the second round of discussions concluded on Monday.
The discussions came about as a result of local cable TV operators' fears that the service represented unfair competition and would erode their earnings.
"We believe the NCC's members understand the global trend [toward digital convergence]. But we understand that they have to ensure that we will keep our promise to remain neutral on political issues," said Chang Tzong-yen (
"Chunghwa Telecom is one of the few local companies that can afford the massive investment required to operate a digital TV service," Chang said.
Chunghwa Telecom, in which the government has a 42-percent stake, obtained state approval to offer TV programs on its broadband network in compliance with the Telecommunications Law (
The company says it has invested between NT$2 billion and NT$3 billion in the nascent TV business.
"It is an irresistible trend for telecom carriers to diversify into the broadband TV market. Chunghwa Telecom is doing well, compared to its global peers," said Cindy Kuo (
European telecom carriers such as France Telecom have launched Internet TV services with little resistance and US operators are gearing up to offer similar services, Kuo said. Hong Kong-based PCCW Ltd had also launched a successful Internet TV service, she added.
In Taiwan, Chunghwa Telecom signed up around 120,000 subscribers in the past two years. But not everyone is enthusiastic about that.
"With its massive resources and large number of broadband subscribers, Chunghwa Telecom is jeopardizing the nation's cable TV industry. All kinds of services could be delivered via broadband in the future," Lu Chia-lin (呂家霖), an analyst with Yuanta Core Pacific Securities (元大京華證券), said yesterday.
The threat prompted local cable TV operators to challenge the legitimacy of Chunghwa's move into the TV market on the basis of the government's shareholding in the firm. According to the revised Broadcasting and Television Law (廣播電視法), the government is prohibited from operating media firms.
Accordingly, the Cable Broadband Institute in Taiwan (
"As long as Chungwha Telecom is offering TV programs, it needs to operate under the same regulations as the cable TV providers," an official of the industry association said under condition of anonymity.
"This [complaint] is a final resort to protect our interests," he said.
It was also unfair that whereas cable TV operators were only allowed to provide services in limited areas, the telecom operator could service the whole nation, he said.
The cable operators' complaint effectively slowed Chunghwa Telecom's expansion into the Internet TV business.
As a result, Chunghwa Telecom early this month trimmed its forecast for Internet TV subscribers for the year to around 300,000, from an earlier estimate of 500,000 users.
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