Taiwan Mobile Co (台灣大哥大), the nation’s No. 2 telecoms operator, yesterday said it was considering offering service plans that cap bandwidth use as part of its efforts to address bandwidth congestion, a worsening problem confronting most telephone companies.
The company’s move is in line with a growing trend among global telecoms operators, including US wireless service provider Verizon. The operators have begun offering limited rate plans or using tier-based charging systems to cope with explosive growth in wireless data traffic and rising bandwidth costs.
“We hope the concept of fair bandwidth usage will be accepted by the pubic and the regulator. And we hope this concept will be reflected in future rate plans,” Taiwan Mobile co-president Cliff Lai (賴弦五) told a media briefing.
Lai said the company’s latest survey showed that 20 percent of the company’s mobile Internet connection service subscribers use about 80 percent of the bandwidth.
To test the waters, Taiwan Mobile yesterday launched a high-speed data rate plan that caps bandwidth usage at 5 gigabytes (GB) for NT$699 per month and the plan will last for 24 months.
Users who exceed the allotted amount of data would see their transmission speed slow down from 21 megabytes (MB) per second to 14.4MB per second. However, the survey showed that the designated 5GB cap would satisfy 70 percent of subscribers, the company said.
The launch made Taiwan Mobile the first phone company among the nation’s major telecoms operators to offer a data rate plan with limited bandwidth and transmission speed.
The popularity of smartphones and tablet devices have caused a spike in wireless Internet access services, which also helped boost Taiwan Mobile’s value-added service revenues by 47 percent year-on-year to NT$5.8 billion (US$20 million) in the first half of this year, Lai said.
Last week, Taiwan Mobile submitted a new rate plan to the National Communications Commission that would cap bandwidth when offering data transmission service at 21MB per second. This would allow users to download data in half the time required with existing 3G data transmission.
To avert a public backlash against such new charging plans, which could cause a rise in bills, Taiwan Mobile said it had no plan to adjust existing rate packages.
Chunghwa Telecom Co (中華電信), the nation’s biggest telephone company, was considering adopting a tier-based charging system to raise funds for a pricey network upgrade in the future, said Shih Mu-piao (石木標), a vice president of Chunghwa Telecom.
“We are upgrading 1,000 base stations to support 21MB data transmission to improve network traffic congestion,” Shih said.
The company has not yet filed a new data rate plan to limit bandwidth, Shih said.
Taiwan Mobile’s new data plan is available now for users in the greater Taipei area and would apply to the whole country by the end of the year after upgrades are completed to its base stations to support 21MB data transmission in urban areas, Taiwan Mobile said.
To address congested network traffic, Taiwan Mobile also plans to build its own Wi-Fi hot spots in certain areas to share heavy mobile bandwidth loading, Lai said.
This year, the company said its capital spending would remain unchanged at NT$6.4 billion. Meanwhile, Chunghwa Telecom plans to spend NT$32 billion this year.
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