Fri, Sep 03, 1999 page17

• Firms lining up for fixed network

  COMPETITION Four major groups have filed letters of intent to participate in the liberalization of a market currently monopolized by Chunghwa Telecom

  • By Tu Po-heng / STAFF REPORTER
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  Prospective teams scrambling for fixed network telecommunications (FNT) licenses have begun to surface, as four FNT groups have submitted letters of intent (LOI) to the telecommunications authority.

  The four teams are Rebar Tele-com Group (力霸電信), New Century InfoCom (新世紀資通), Taiwan Fixed Network Telecom (台灣固網) and SaveCom InfoCom Inc (全民電信), according to the Directorate General of Telecommunications (DGT) of the Ministry of Telecommunication and Communications (交通部電信總局).

  The FNT is a wire service that includes city calls, domestic long-distance and international calls. Currently, the FNT is a government monopoly run by Chunghwa Tele-communications Co (中華電信). The winning consortia will be responsible for installing the lines and operating the services. There is no limit to the number of licenses to be issued.

  As there is a great chance that new FNT service providers will have to connect or rent lines from Chunghwa Telecom, filing LOIs will allow bidding teams to have discussions with Chunghwa about its infrastructure and facilities, thereby helping them to write thorough business plans, according to a DGT official who asked to remain anonymous.

  The deadline for FNT license applications, including business plans, is Dec. 30 1999, and the announcement of winning applicants will be made after February next year.

  "Filing an LOI is the prelude to the bidding competition as it helps us to build up an accurate picture of who will be the players," said the official.

  The first round of meetings between bidders and the Chunghwa Telecom will be held sometime in the next two weeks and the DGT will continue accepting LOIs from prospective bidders before the meeting.

  The meetings will give bidders a chance to become more familiar with the infrastructure of Chung-hwa Telecom.

  Rebar Telecom Group, led by Eastern Group (東森集團), a local cable network giant and Taiwan Railway Administration (台鐵), was the first group to file a LIO, showing its determination to gain a license.

  New Century InfoCom, led by Far Eastern Group (遠東集團) and KG Telecom (和信電訊), Taiwan Fixed Network Telecom, led by Pacific Communications Services Co Ltd (台灣大哥大), a leading private mobile phone service provider, and SaveCom InfoCom Inc (全民電信), led by Formosa　Telecom Investment Co Ltd (全民電通投資公司), all followed suit to file LIOs with the DGT.

  It's believed that the FNT sector is the "last big piece of the telecom cake left on the table." According to the Taiwan branch of Mckinsey Asia Inc, an international management consulting firm, the FNT market is expected to grow by 11 percent yearly and reach an aggregate NT$520 billion in revenue by 2011.

  The result of a survey done by McKinsey showed that at least 50 to 60 percent of households said they are willing to try services offered by the new FNT providers while 70 percent of large corporations expressed the same willingness.

  As of 1998, Chunghwa Telecom had 11.50 million local phone service subscribers and the penetration rate was 52 percent.

  For your information

  Telecoms

  * Rebar Telecom Group, New Century InfoCom, Taiwan Fixed Network Telecom and SaveCom InfoCom Inc are lining up to get fixed network telecommunications licenses * The winning applicants for the licenses will be announced next February * The FNT market is expected to grow by 11 percent yearly
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