At least five groups to bid on 3G licenses

In the Dec. 1 issue of The Economist magazine, NTT DoCoMo was ranked ninth in a poll judging companies that best created wealth for their shareholders over the past five years through June this year. The company grew through i-mode.

The next DoCoMo?

Only five companies in Taiwan will win a chance to become the next DoCoMo.

Record high unemployment and plunging corporate revenues during the economic downturn have reduced the tax base, while increased public spending and additional government funds spent to prop up the stock market have taken a toll on government coffers.

In addition, one of the new fixed-line telecom firms, Eastern Broadband Telecommunications Co Ltd (東森電信), will bid for a license. The sixth bidder is likely to be World Communications (世界全通) -- a group composed of the Teco Electronics Group (東元), Cathay Life Insurance (國泰人壽) and First International Computer (大眾電腦) -- according to analysts.

Teco owns the fifth mobile telecom firm operating in Taiwan, Taichung-based Mobitai Communications Corp (東信電), while FIC owns First International Telecom (Fitel, 大眾). Fitel operates a mobile data service developed in Japan called the personal handyphone system. Handyphone systems can transmit data across airwaves at a rate of 64 kilobits per second, far faster than the 9.6kbps allowed by the GSM phones in vogue throughout Taiwan.

Companies in Taiwan have voiced displeasure over the upcoming 3G-license auction. They fear the price of a license could be bid up too high in a manner similar to auctions in Europe last year.

At the time, five overzealous telecom firms in England paid US$35 billion -- or US$118 per person -- for a license to operate a 3G network.

Analysts doubt these firms will be able to finance the license cost on top of the cash needed for the equipment to build a 3G network.