The first day of the nation's auction of third-generation (3G) wireless licenses got off to a slow start yesterday, with bids coming in too low to satisfy the government, a senior official said.
"These five licenses are expected to generate NT$60 billion for the government, while the first day's total is just NT$34.66 billion -- far below our target," a senior official at the Ministry of Transportation and Communications said.
Taiwan started its auction of 3G licenses yesterday, with a total of six bidders trying to grab five licenses to provide high-speed Internet data services to the country.
According to government regulations, these five license are being auctioned for a minimum of NT$33.6 billion, and the floor price for each license is based on the amount of bandwidth.
Contenders for the licenses are Taiwan Cellular Corp (台灣大哥大), Chunghwa Telecom Co (中華電信), Yuan-Ze Telecom Co (遠致電信), Asia Pacific Broadband Wireless Communication Inc (亞太行動寬頻), 3GO Telecommunications Corp (世界全通) and Taiwan PCS Network Inc (聯邦電信). KG Telecommunications Co (和信電訊) dropped out of the auction late last month.
Chunghwa and Taiwan Cellular posted the highest bid for two licenses at NT$6.802 billion and NT$7.676 billion respectively. Far EasTone's (遠傳電信) Yuan-Ze put NT$42.42 billion as the highest bid for another license.
Taiwan PCS Network -- a subsidiary of Taiwan Paging Network (
The battle for the fifth license was tight, with 3GO and Asia Pacific Broadband chasing each other for six rounds, with the highest bid coming from Asia Pacific at NT$8.139 billion. It was also the license with the biggest price jump yesterday, coming in at NT$2.24 billion higher than the minimum price.
One market watcher described the tepid action yesterday as "normal." "Before putting a bunch of money in it, bidders prefer to know each other's attitude first," said Alex Wu (
That's why the first day of bidding is always "quiet and polite," Wu said. In addition, bidders may have an under-the-table consensus not to set prices too high at the beginning of the auction process.
"They won't let prices climb unless it's necessary," Wu said.
However, one government official complained contenders are too conservative. "They usually don't raise the bid until the last minute of each run, and the new amount is really limited," said Chang Chun-ming (張峻銘), a specialist at the Directorate General of Telecommunications. "Based on the pace of bidding, I don't think the auction can be concluded this week," Chang said.
But another government official remained optimistic.
"If the auction period is short, the amount generated must be low? what we are really looking forward to is a much higher amount at the end," the senior official at the Ministry of Transportation and Communications said.
The auction will end when one of the six bidders drops out. According to the government's original schedule, that should be no later than the end of this month.
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