The lack of a clear-cut regulatory system is hampering the development of Taiwan's telecom industry, a market pundit said yesterday.
"Regulations strongly determine market development, while Taiwan's regulatory framework remains inadequate in stimulating competition," said Zhang Weiming (
Providing telecom services requires a huge investment of time and capital to establish networks, therefore the market incumbents. In most countries, state-run operators have a tremendous advantages over new entries.
In Taiwan, the incumbent is Chunghwa Telecom Co (
Although the nation's telecom market has been gradually opened up, it is still has a long way to go.
A local telecom player said Chunghwa still enjoys special treatment from the government.
"Until late last year, Chunghwa's pricing requests for international phone rate could go directly to the Minister of Transportation and Communications, bypassing the Directorate General of Telecommunications, while new operators have to complete a long list of requirements," said a local fixed-line company executive, who requested anonymity.
Most of Chunghwa's income goes directly to the nation's coffers, and therefore bureaucrats only loosely regulate Chunghwa's pricing practices, she said.
Chunghwa also controls "last mile" connections to most households and they can refuse access to competitors.
"With the time required for private companies to finalize their own networks, Chunghwa's monopoly allows it to easily maintain its dominant position in the ADSL market," she said. "I know the DGT is trying to fairly regulate operators, but implementation of the policy is lacking."
This sentiment closely resembles the position of the American Chamber of Commerce in Taipei.
"The DGT doesn't have the independence, legal authority, or all of the resources needed to effectively enforce telecom regulatory policies," the business lobby said in its annual white paper released last week.
AmCham urged the government to grant the directorate full authority, without delay, in resolving inter-carrier disputes, enforcing policies and mediating construction approvals for the new and incumbent operators. New entrants also faced obstacles in setting up their own networks.
"We have difficulties in receiving rights of way for breaking ground and burying cables," the fixed-line company executive said.
Each sectors' access rights are dictated by local officials rather than the central government. AmCham said the government and the directorate should intervene to negotiate on behalf of telecom operators.
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