Private companies that allow consumers to use pre-paid phone cards or the Internet to place calls from Taiwan to foreign countries violate the law and face penalties of up to NT$1 million, the telecommunications authority said yesterday.
The Directorate General of Telecommunications (DGT) under the Ministry of Transportation and Communications (交3q3?q信總局) said yesterday that such services were illegal.
The ban will not be lifted until the government opens up the international simple resale bus-iness, in which companies can buy large time blocks from fixed network service providers and then resell them at a lower prices.
However, the agency said it was permissible for companies to allow consumers to place calls from foreign countries to Taiwan using pre-paid cards or the Web.
The government plans to lift the restrictions in July 2001 as part of an overall effort to liberalize the local telecommunications industry.
The DGT said it had sent official warnings to nearly 20 service providers and it will start cracking down on illegal firms soon.
Violators will face a penalty of between NT$300,000 and NT$1 million and their equipment could be seized by the government. Although subscribers of illegal companies are not breaking the law, their rights as consumers are not protected.
An executive whose company sells pre-paid international phone cards for calls between Taiwan, Hong Kong, Canada and the US said he "didn't know that the service is illegal."
He added that there are roughly 10 companies in Taiwan offering similar services and the oldest firm has been operating for three years.
The executive also said there is a "tremendously huge" demand in Taiwan for pre-paid international phone cards, as rates are typically half that of state-run Chunghwa Telecom's (
Chunghwa Telecom today is the only international phone service provider in Taiwan. The telephone monopoly charges NT$12 per minute for calls between Taiwan and the US, while the executive's company charges just NT$8 per minute.
The lower price is attributable to Internet phone technology, the executive said. Internet phone traffic is expected to account for 36 percent of total global voice phone traffic in 2003, he said, citing a report by Market Intelligence Center (資稅會).
Although the DGT prohibits companies from offering Internet phone services, companies are allowed to sell devices that help users to talk via the Internet.
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