Chian: You'll be hearing a lot about competition in the submarine cable industry, but many companies may be just announcing an idea but won't be able to actually build it.
Since in the financial market to raise funding to build such a big project is not easy. We have raised the full funding to build the Asia Crossing cable. Our NASDAQ IPO last October went very well and raised money for construction.
TT: How will lower prices for wider bandwidth help spur on the development of Taiwan's Internet industry?
Chian: The number of users will grow faster and the usage per user will go up. A lot of applications that are not feasible today will become much easier like sending and receiving video content and video conferencing. There's a saying in the Internet economy: build it and the customers will come. All the applications will develop very fast.
TT: Taiwan's telecommunications market has been widely criticized as being too heavily regulated and slow to liberalize. What are some of the major restrictions?
Chian: For the backhaul, we have to negotiate with a fixed-network operator for at least three months.
If we cannot reach any deal with a fixed-network operator then the regulator will allow us to build our own backhaul. We see the necessity of negotiation as a restriction.
Also our customers are restricted to the four integrated fixed-network operators, we can only lease our capacity to them. The foreign equity ceiling and the limits of one telestation per landing station are all restrictions, but we hope all will be eased. It's just a matter of time.
TT: Are the current restrictions overly heavy on foreign firms?
Chian: The regulators have a good reason for being strict. They want to open up the market in phases, they want it to be a controlled liberalization. So even under present regulations we still think we can create a win-win situation with fixed-network operators.
It's kind of an inconvenience for us but it is not a hurdle we can't overcome. It's a fair game and we can play the game. So if you want to get in earlier you get more restrictions, more conditions. At AGC we respect the current regulations we think it's fair.
TT: When AGC roles out its service in June, it will initially provide bandwidth of 80 gigabytes per second, how fast will demand grow for increasingly wider bandwidths?
Chian: Current internet connectivity from Taiwan to all the other countries is probably under one gigabyte per second today. So from our initial bandwidth you can see that our expectations of demand growth is high. Each year capacity demand will grow two to three times; at least 200 percent to 300 percent. We believe demand will be huge.
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