Fri, Jan 15, 2010 - Page 11 News List

Nokia official calls rate cut ‘unfair’

By Joyce Huang  /  STAFF REPORTER

A National Communications Commission (NCC) plan to enforce rate cuts on fixed and mobile telecoms services providers in April is unfair and will cost telecoms-related businesses, both domestic and foreign, hundreds of billions in losses, Nokia Siemens Network Taiwan general manager Mike Wang (王建亞) said yesterday.

The move would also discourage future investment and innovation in technology, content and services in the entire sector, he said.

If the rate cuts are implemented, “the quality [of the nation’s telecoms services] will be impaired once operators stop constructing new networks or launching value-added services,” Wang said by telephone yesterday.

“That’s an all-out punishment. It’s hard to imagine that Taiwan will retreat from its past efforts in telecommunications liberalization,” said Wang, who also chairs the telecommunications, media and content committee at the European Chamber of Commerce in Taipei.

The chamber yesterday said that Wang made the comments in his personal capacity because the chamber is still deliberating on its stance on the rate cut.

Throwing his support behind the nation’s five major telecoms carriers, Wang said that their retail prices for fixed and mobile services were competitive among international peers.

He forecast that five operators — Chunghwa Telecom (中華電信), Taiwan Mobile (台灣大哥大), Far EasTone Telecommunication (遠傳), Vibo Telecom (威寶) and Asia Pacific Telecom (亞太) — would suffer more than NT$30 billion (US$945 million) in losses if they were to comply with the rate change.

That would have a ripple effect, placing a squeeze on the future earnings of peripheral businesses such as network builders, content providers and handset makers, Wang said.

Wang called the rate cut undifferentiated, saying it would pose an even greater threat to small carriers such as Vibo, which hasn’t yet turned a profit from its 3G investment.

“In a free market, it is not the regulator’s job to meddle in pricing,” Wang said.

The commission last week urged the nation’s telecoms operators to impose a 5.686 percent and 5.87 percent cut respectively for retail rates of fixed and mobile services in the next year.

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