Taiwan Star Telecom Co (台灣之星) yesterday launched a rate plan for 4G subscribers to try its 5G technology at less than half the price of similar trial packages offered by the nation’s three biggest telecoms, signaling the possible start of a 5G price war.
With its new “early bird” packages, Taiwan Star offers subscribers two-year, 4G rate plans of at least NT$599 (US$19.94) with unlimited data that are to upgrade to 5G once services launch.
Subscribers can start the trial plan now or withhold the package until the commercial launch of 5G services in the fourth quarter, Taiwan Star said.
Photo: CNA
The NT$599 plan was first launched in Taiwan in 2014, when Taiwan Star entered the telecom market and began rolling out unconventional rate plans to sabotage the pricing schemes of the nation’s three largest telecoms.
With the new packages, it has lowered the threshold for 5G trial plans.
The nation’s major telecoms, led by Chunghwa Telecom Co (中華電信), require users to sign up for a monthly plan of at least NT$1,399 for a free upgrade to 5G services later this year.
“There is a 50 percent chance that the price competition [will continue with 5G services],” Taiwan Star president Cliff Lai (賴弦五) told reporters. “The big telecoms are the key… We are not the price-setter in Taiwan’s telecom market.”
He urged local rivals to forgo the price war, given high 5G spectrum prices and deployment costs, and declined to comment on a NT$1,300 monthly rate proposed by the National Communications Commission.
Looking at countries that have launched 5G services, the rate plans are usually 20 to 40 percent more expensive than their 4G predecessors, Lai said.
With its “early bird” plans, Taiwan Star aims to expand its subscriber base from 2.35 million to 2.5 million users by the end of this year, he said.
Taiwan Star aims to generate more free cash from its operations to fund the construction of its 5G infrastructure and daily operations for two years after the commercial launch of 5G, he added.
Taiwan Star reported minus-NT$1.8 billion in free cash flow last year.
The company last month won 40 megahertz (MHz) of 5G spectrum in the 3.5 gigahertz frequency band at an auction for NT$19.71 billion.
Taiwan Star said that it is open to sharing spectrum with any established telecoms.
Taiwan Mobile Co (台灣大哥大), which secured the least amount of 5G spectrum — 60MHz — among the big three, is widely seen as a potential partner for Taiwan Star, which was tight-lipped about any talks about partnerships.
To finance the 5G deployment, Taiwan Star’s board of directors has approved raising NT$16 billion via three private placements.
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