Mon, Dec 11, 2006 - Page 12 News List

Mobile firms wary of WiMAX investment

By Lisa Wang  /  STAFF REPORTER

Domestic mobile operators are cautious about investing in untried mobile WiMAX technology, as the new technology could not guarantee a boost to stagnant revenue growth, company executives said.

The comments came ahead of a public hearing scheduled for today, aiming to solve recent disputes over the government's roadmap to push for participation in developing WiMAX-related devices.

"Chipmaker Intel Corp is aggressively promoting WiMAX technology, but most telecom companies are taking a wait-and-see attitude about mobile WiMAX deployment," said Shih Mu-piao (石木標), a spokesman of market leader Chunghwa Telecom Co (中華電信).

The Ministry of Transportation and Communications plans to auction two to four WiMAX licenses for interested wireless telecom service providers next June.

"WiMAX technology has yet to be ready any time soon and no handsets supporting mobile WiMAX connection are available now, though it boasts a speed more than six times faster than the fastest HSDPA technology," Shih said.

HSDPA refers to high-speed downlink packet access and is also known as 3.5 generation (3.5G) mobile technology that offers data transmission at speeds up to 10 times faster than 3G service.

Chunghwa Telecom owns more than one-third of the nation's nearly 20 million mobile subscribers in addition to its dominance in the landline and broadband markets.

Smaller rival Asia Pacific Broad-band Wireless Communications Inc (亞太行動寬頻), the only local firm offering wireless telecom services on CDMA2000 (code division multiple access) technology, also questioned the government's haste to sell the licenses.

"We don't know whether the government aim is to boost its cof-fers by auctioning WiMAX licenses, but it is premature for telecom firms to launch commercial operation of the technology," Asia Pacific Broadband chairman Wang Lin-tai (王令台) said.

"It will be highly risky for telecom operators to make the investment now as pricey handsets and expensive charges will make the service unattractive in the initial phase," he said.

WiMAX subscribers could reach 14 million users around the globe by 2011 after mobile WiMAX devices hit the market late next year at the earliest, research house In-Stat predicted recently.

But "for at least another five years, broadband wireless technology in the form of WiMAX is unlikely to pose a big threat to 3G, as it will take longer to mature," the Arizona-based research firm said in a statement on Nov. 28.

In late June, SK Corp, South Korea's biggest fixed-line operator, spearheaded the commercial operation of WiBro technology, a South Korean WiMAX compatible mobile Internet platform, for computer users to surf the Net using a WiMAX data card in a bid to regain lost ground by offering wireless connection.

In addition to technological problems, local telecom firms are concerned whether heavy investments in WiMAX technology would be new profit drivers in the nation's already saturated telecoms market.

Domestic companies have already invested approximately NT$20 billion (US$617.5 million) each in 3G technology, but none of them have started to make profit from offering the high-speed transmission service during two years of operation, Shih said.

Local telecom companies said that slower-than-expected growth in new 3G subscribers meant that they would post a decline in revenue this year after almost a decade of growth.

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