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WiMAX licenses awarded

The National Communications Commission (NCC) awarded Worldwide Interoperability for Microwave Access (WiMAX) licenses yesterday to Far EasTone Telecommunications Co (遠傳電信) and five other service providers.

The license will allow each company to offer WiMAX services for six years, with the possibility of renewal.

Chunghwa Telecom (中華電信) and Taiwan Mobile Co's (台灣大哥大) Taiwan Digital Communications Corp (台信聯合電訊) failed in their bids.

"We will seek a nationwide license during the 2009 auction," Chunghwa spokesman Chang Feng-hsiung (張豐雄) said by telephone. "Before then, we do not rule out the possibility of forming a strategic alliance or cooperating with interested WiMAX winners."

Taiwan Mobile said it was not in a hurry to jump into the business, adding that no telecom company in the world had begun operating WiMAX commercially.

With a promise to pay 12.89 percent of its annual revenue for the right to provide a WiMAX service, First International Telecom Corp (大眾電信) placed the highest bid.

The licenses were awarded after the NCC deliberated for approximately one-and-a-half hours yesterday morning.

NCC spokesperson Howard Shyr (石世豪) said that based on requirements, new license owners could only obtain the licenses after paying a deposit of NT$40 million (US$1.2 million) and NT$210 million as a downpayment for using the radio spectrum. Payments are expected within 30 days after receiving official notice from NCC.

He said operators had 18 months to build their infrastructure, adding that it would only grant one, one-year extension if necessary.

Meanwhile, companies were given three months to raise the necessary capital, with a three-month extension available on request.

First International was the first company to obtain a license to operate in the north, while Vastar Cable TV System Corp (威達有線電視) won the first license for the south by offering 8.69 percent of annual revenue.

Licenses for the north were also awarded to Global On Corp (創一投資) and a joint venture of Vibo Telecom Inc (威寶電信) and Tecom Co (東訊).

They offered 6.19 percent and 5.2 percent, respectively.

Licenses for the south were given to Far EasTone and Tatung Co (大同). Each has promised to pay 4.18 percent and 7.25 percent of their revenues respectively.

Far EasTone, the nation's second-biggest mobile company, said it was highly confident about the development of the broadband market in the south.

Teddy Huang (黃特杕), a representative of the Vibo-Tecom joint venture, said his team was satisfied with the results, adding that the venture would cooperate with license owners in the south to offer the WiMAX service nationwide.

Vastar said it was honored to be the first cable TV service provider to acquire a license.

It said it would start building its infrastructure in Taichung, Tainan and Kaohsiung and hoped to start operating next year.

Jason Lin (林一平), a professor at National Chiao Tung University, said these operators would likely start making profits in about three years.

"My estimate is that they will become profitable right before their licenses expire," he said.

additional reporting by Lisa Wang
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