Sydney Wang, an employee of a software company in Taipei, is not enthusiastic but rather indifferent about the new mobile-number portability service.
"I'm not clear about the new service. I have no plan to switch operators," he said.
"But, I may consider moving to other carriers, if they offer lower tariffs and better handsets," said Wang, one of 8 million subscribers with Taiwan's top phone company Chunghwa Telecom Co (
Wang, 27, represents a miniature version of the maturing Taiwanese telecommunications market that boasts high mobile penetration and sophisticated users.
Only one-fifth of Taiwan's 20.52 million mobile subscribers plan to change operators without losing their current cellphone numbers, according to a recent survey by the Chinese-language weekly Business Today.
Mobile-number portability, which is slated to take effect in mid-October, is part of the government's efforts to further liberalize the nation's telecom market.
But, liberalization brings challenges to the established players, as it would give an opportunity for industry latecomers to lure away subscribers from their rivals by offering lower charges.
"The launch of mobile-number portability will be an opportunity for latecomers like Asia Pacific Broadband Wireless Communications Inc (
"However, staging a price war is the only way for them to grab a market share," Liang said.
To attract price-sensitive mobile users, Asia Pacific Broadband plans to offer new subscribers free handsets, free calls within its network for two years and will sponsor them with the NT$240 required to keep existing numbers.
The wireless operator, which is still struggling to make a profit after starting operating in 2003, hopes to boost its customer base to 850,000 by the end of the year. That will represent a 25 percent increase from its current 680,000 users.
In addition to Asian Pacific Broadband, another dedicated 3G player, Vibo Telecom Inc (
"Vibo Telecom may offer much lower voice rates and cheap handsets to get market share, following the example set by Hong Kong's 3G operator Hutchison Whampoa Ltd (
In some markets in Europe, Hutchison Whampoa started to make a profit after providing rates half of that of established players to attract more users, Wang said.
In order to offer lower-priced handsets, Vibo Telecom and Asia Pacific Broadband plan to offer cellphones made by Chinese phone vendors like Huawei Technologies Co (華為科技) and TCL Corp.
Vibo Telecom is scheduled to start operating next month. Vibo Telecom is an affiliate of Kinpo Group (
Chunghwa Telecom and Taiwan's No. 2 mobile carrier, Far EasTone Telecommunications Co (遠傳電信), said they were not worried that the newcomer will undercut their customer base.
But they are very careful not to follow in the footsteps of Hong Kong's telecom carriers, which suffered greatly in a price war after the former British colony started offering mobile-number portability in 1999.
The weakening stock prices of Taiwan's three telecom companies showed investors' concern about the new service.
Chunghwa Telecom's share price has declined 5 percent since the beginning of this month to NT$56.7 on Friday.
"Full coverage and better service quality will be priorities for users when considering switching operators, not lower rates," said Shih Mu-piao (
Shih said it was understandable that market latecomers will cut rates to vie for a market share. But he doubted that those new players would have sufficient capital to support the strategy in the long run.
To brace for new competition, Chunghwa Telecom and Far EasTone more than doubled its handset subsidies for new 3G subscribers and established heavy users to around NT$10,000, from NT$4,000.
Chunghwa Telecom is also offering a new retaining program, which combine fixed-line and mobile services, by recently cutting its voice rates by as much as 70 percent to NT$1.8 per minute.
"We believe that number portability will only have a minor impact on Chunghwa Telecom. Taiwan, a stable market, will not follow Hong Kong," Shih said.
Gartner's Liang also did not expect a shake-up in Taiwan's telecom landscape. However, the new service will almost certainly boost handset sales as they expect it would become fashionable among users to have a second cellphone number.
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