Chunghwa Telecom Co (中華電信) and China Telecom Corp (中國電信) yesterday announced plans to jointly build a submarine cable between Kinmen and Xiamen.
Construction of the submarine cable is estimated to cost less than 100 million yuan, or NT$476 million, with the two telecom operators sharing the cost, company executives said yesterday on the sidelines of a two-day meeting on Cross-Strait Telecommunications Cooperation and Exchange in Taipei.
The submarine cable project is still subject to approval by Taiwanese and Chinese authorities.
Leng Rongquan (冷榮泉), chief engineer of China Telecom, said the company was still in talks with Taiwan’s largest telecommunications operator about the project.
He said that construction of the cable would be beneficial to the telecommunications industry on both sides of the Strait, as it would increase efficiency and reduce costs.
Chunghwa Telecom’s chairman and chief executive officer Lu Shyue-ching (呂學錦) said the construction of the submarine cable will begin once it receives the green light from Taiwan’s Ministry of Transportation and Communications.
“If development of the telecommunications industry across the Taiwan Strait could help reduce costs, we would lower prices to reflect the cost reductions,” Lu said.
Vice Minister of Economic Affairs Hwang Jung-chiou (黃重球) estimated that the demand for third-generation (3G) mobile phones in China would reach 150 million units within the next year or two.
Hwang said China’s 3G mobile communication market offers 1 trillion yuan in business opportunities, with about 60 percent going to mobile phones. If Taiwanese manufacturers could get hold of about one-tenth of the pie, it would be worth around 60 billion yuan.
Mobile phone manufacturers and chip design companies in Taiwan will be the biggest beneficiaries, he said.
Separately, China Mobile Communications Corp (中國移動) yesterday voiced its confidence that the Taiwanese government would permit it to invest in Far EasTone Telecommunications Co (遠傳電信).
China Mobile on April 29 announced a strategic alliance with Far EasTone and plans to buy a 12 percent stake in the Taiwanese firm.
China Mobile vice president Liu Aili (劉愛力) said that while the company has plans to expand its stake in the future, it would not get involved in Far EasTone’s daily operations and would never become the firm’s major shareholder.
“I believe there is no vital difference between holding 10 percent and 12 percent. I don’t believe that the [Taiwanese] government will allow us to hold a 10 percent stake in Far EasTone, but say no to holding 12 percent,” Liu said.