Aurora Telecom offers cheaper 3G

Aurora Telecom Corp (震旦電信), the nation's first mobile carrier operated on a rented network, yesterday said it aimed to attract 150,000 subscribers by the end of this year by offering cheaper rates.

The new carrier, a joint venture of pure third-generation (3G) mobile operator Vibo Telecom Inc (威寶電信) and office appliance supplier Aurora Corp (震旦行), is scheduled to offer 3G services on Vibo's network late this month.

The telecom entrant, which has NT$1 billion (US$30.55 million) in capital, hopes to acquire 150,000 subscribers by the end of this year and to break even within a year, Aurora Telecom vice chairman James Tsao (曹萬鈞) said on the sidelines of the launch of the service yesterday.

Aurora Telecom enters the marketplace at a time when most of its Asian peers are struggling to gain subscribers and some, such as Virgin Mobile, have backed out altogether.

Tsao said the lack of a household brand-name and sufficient outlets had been major obstacles preventing Virgin Mobile, the world's leading mobile virtual network operator (MVNO), from gaining a foothold in Asia.

"A well-known brand and strong sales channels are the keys to success for a MVNO. Aurora Telecom has both," Tsao said.

Aurora Telecom plans to expand its outlets to 300 from the current 230, he said.

In addition, consumers would easily associate Aurora with telecom services as it has helped local operators in selling phone numbers and handsets over the past decades, he said.

Tsao expected the customer base to expand to 500,000 next year.

"The target is quite aggressive ? I don't think MVNOs will eat into the market share of established mobile carriers in the short term," said Eddie Tsai (蔡華展), a telecom analyst with the Market Intelligence Center (資訊市場情報中心) based in Taipei.

If it hits its target, Aurora Telecom would gain about a 7.5 percent share of Taiwan's 2 million 3G subscribers this year, Tsai said.

Tsai said most MVNOs in overseas markets such as North America and Europe usually avoid direct competition with existing mobile operators by offering specially designed value-added services to cater to the needs of a small group of users.

Chunghwa Telecom Co (中華電信), Far EasTone Telecommunications Co (遠傳電信) and Taiwan Mobile Co (台灣大哥大) dominate the nation's wireless telecommunications market.

To compete with the major carriers, Aurora Telecom appears to be following parent firm Vibo's strategy of offering lower rates to win subscribers from rivals.

The company has no minimum monthly fee and offers rates around 40 percent lower than bigger rivals for subscribers who call friends or family on other networks.