Taiwanese mobile operators yesterday opposed the telecom regulator's request that they reduce annual phone rates by almost 5 percent over the next three years.
The National Communications Commission (NCC) on Thursday said that local mobile service providers should trim charges by 4.88 percent per year as part of the regulator's efforts to boost the output efficiency of the local telecommunications industry.
Local telecom providers said the proposed price cut would be difficult to offset, as even an increase of 2 percent in annual revenue would be hard to achieve.
First International Telecom Corp (
"We offer rates 50-60 percent lower than other mobile carriers. The planned reduction in charges will drive First International into a difficult situation," company president Charlie Wu (
In contrast to Wu's call for a "more reasonable" rate adjustment, the nation's major mobile players, led by Chunghwa Telecom Co (中華電信), were circumspect about the proposed rate reductions.
"We are in the process of calculating the effect of the price cuts and will continue to communicate with the NCC," said Chang Feng-hsiung (
Chang declined to reveal details about the discussion with the association.
"The price cuts will negatively affect the telecom companies' margins, but we are not clear how big the impact will be," said Daniel Hsiao (
But, Hsiao said he did not expect the charge adjustments would affect the companies' credit rating as local telecom firms currently maintain good margins.
The regulator planned to finalize the rate adjustment by the end of the year following a public hearing scheduled for mid-November. Implementation would occur in the upcoming fiscal year beginning April 1.
Before any final decision, the NCC would collect more commentary and opinions from industry representatives, it said.
In addition to mobile charges, the government agency requested that telecommunication companies trim charges for calls made on fixed line phones.
The commission requested a reduction of up to 5.35 percent a year in landline rentals over a three-year period, which could lead to price cuts for broadband connections.