Fri, May 18, 2001 page17

• Slow work at Chunghwa blasted

  TELECOMS Taiwan Fixed Network and Sparq are not yet able to offer their highly publicized long-distance rates because connection work has yet to be completed

  • By Dan Nystedt / STAFF REPORTER
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  The Legislative Yuan criticized state-run Chunghwa Telecom Co (中華電信) yesterday for keeping two of its new competitors disconnected from Taiwan's telephone network.

  Over two months ago, Taiwan's three new fixed-line telecommunications companies promised to lower international and local long-distance calling rates for consumers by up to 10 percent.

  Since that time, only one has been able to begin operations. All three expected to be up and running by the middle of April, after signing agreements to connect with Chunghwa's network.

  "We're still working on our interconnection system with Chung-hwa Telecom, and hopefully we'll be up and running by the end of May," said Ting Hsian-wen (丁憲文), public relations manager at Taiwan Fixed Network Ltd (台灣固網), one of the new firms.

  Taiwan Fixed Network and rival Sparq (速博) both remain on hold in their attempts to connect to Chunghwa's network -- and therefore 99 percent of potential customers here -- due to continued testing of their interconnection systems.

  Chunghwa still controls access points to Taiwan's 12.9 million fixed-line telephone connections and the three new companies must iron out billing and technical agreements with the state-run giant before customers can connect to their lines.

  Only one of the new firms, Eastern Broadband Telecommunications Co Ltd (東森電信), completed all required interconnection testing -- on April 6. The firm immediately launched international calling rates 24 percent lower than Chunghwa's best price on calls to China and 3.4 percent lower to the US and Canada.

  Legislators yesterday blamed Chunghwa for dragging its feet on the interconnection issue, demanding the company move faster in allowing Taiwan Fixed Network and Sparq access to its network.

  According to Lee Min-chung (李明忠), a specialist at the Ministry of Transportation and Communications which still controls 97 percent of Chunghwa stock, the problem appears to be in the computerized billing system. When a customer phones into the long distance service of a Chunghwa competitor, the competitor has to shares fees with Chunghwa for use of the local line. Computer-run billing systems keep track of these fees.

  Lee also pointed out, however, that the new companies signed contracts with Chunghwa stipulating that the entire interconnection process should be finalized within 45 days. Chunghwa officials declined repeated requests to comment on the issue.

  Analysts sided with legislators, blaming the state-run giant for anti-competitive practices in keeping the two new telecom firms out of the loop. Increased competition was designed to bring Taiwan's phone rates in line with other industrialized nations. This should still happen, but Chunghwa has saved itself nearly two months of earnings pain by dragging its feet on getting the new firms hooked up.

  Despite the fact Taiwan Fixed Network and Sparq might not begin service until the end of May, nearly two months later than Eastern Broadband, one analyst predicted the impact on their ability to compete will be limited.

  "If they finish by the end of May, then Eastern Broadband will have no real advantage because Sparq and Taiwan Fixed Network are running much better marketing campaigns," said Nathan Lin (林宗賢), telecom analyst at National Securities Corp (建弘證券).

  Lin said Sparq and Taiwan Fixed Network have moved aggressively to sign new customers and should benefit immediately when their systems become operational. Customers must sign billing agreements with one of the new fixed line firms in order to take advantage of lower international dialing and long-distance rates.

  Sparq officials even offered a "7 percent appreciation plan" to customers who have already signed up. Since many of these customers believed they would be able to begin service at the end of April, Sparq will reimburse 7 percent of the total paid amount. Taiwan Fixed Network plans to offer a similar plan.

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  * Chunghwa controls access points to 12.9 million fixed-line telephone connections. * Only one of three new firms, Eastern Broadband Telecommunications, has completed all interconnection testing. * Taiwan Fixed Network and Sparq might not be able to begin service until the end of May.
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