NCIC investing NT$6bn in next-generation networks

Local fixed-line operator New Century InfoComm Tech Co (NCIC, 新世紀資通) plans to spend roughly NT$6 billion (US$185 million) to build next-generation networks (NGN) over three years to meet the growing demand for bandwidth to support multimedia and video services, a company official said yesterday.

To catch up with local telecom giant Chunghwa Telecom Co (中華電信), the nation's three private fixed-line operators, including NCIC, has been building their own network using new fiber optic cables, replacing outdated copper cables.

Chunghwa Telecom still holds more than 90 percent of the nation's fixed-line market, a decade after the government deregulated the telecom industry.

"The [NGN] investment will be primarily for building local access and new equipment from largely local suppliers to offer value-added services to subscribers as we have nearly completed the back-bone deployment," NCIC president Jeffey Gee (紀竹律) said in a media meeting.

Gee succeeded Lim Shyong (林雄) as company president last Friday. Before taking the post, Gee was an executive vice president at Far EasTone Telecommunications Co (遠傳電信), a major shareholder of NCIC.

NCIC's equipment suppliers, D-Link Corp (友訊科技) and ZyXEL Communications Corp (合勤科技), may benefit from the new investment in light of their existing partnership.

NCIC sells its service under the name Sparq (速博).

Though the new network could serve as a platform for delivering TV programs -- similar to what Chunghwa Telecom is doing now -- Gee said NCIC would not rush into the cable TV business, citing high prices after foreign private equity funds purchased major players. The company would instead focus on preparing for the commercial launch of Internet voice calls.

Gee said NCIC had obtained approval from the National Communications Commission to provide lower-priced Internet telephony services and hoped to launch the service soon.

Constant investment in networking infrastructure has made it difficult for NCIC to significantly improve its books, Gee said.

“It will not be easy for us to break even this year,” Gee said.

NCIC has yet to make a profit since its establishment in 2000.

To achieve its goal of breaking even as soon as possible, Gee said the company would come up with more services for corporate users, which accounted for more than half of NCIC's overall revenues last year.

In the first half of last year, NCIC's losses narrowed to NT$322 million from NT$525 million during the same period in 2006.