Taiwan Mobile Co (台灣大哥大), the nation’s second-biggest telecom carrier, yesterday cleared a key hurdle in acquiring the nation’s No. 2 cable TV system operator with the Fair Trade Comission’s (FTC) approval of its plan to buy Kbro Co (凱擘).
However, the approval came with a laundry list of limitations and requests, including requiring Taiwan Mobile to reduce the number of cable system companies it controls from five to four, which the FTC said in a statement was aimed at minimizing its adverse impact.
The commission’s decision came after a 30-day extension to closely review Taiwan Mobile’s application as the plan would create a dominant player in the cable TV market and reduce competition.
“There was concern that the acquisition would undermine competition in the cable TV and satellite TV market,” the commission said.
The combination of the two firms could lead to higher prices for cable TV channel suppliers and could build a higher threshold for new players, it said.
Taiwan Mobile would also boost its share of the cable TV market to 32 percent, from 11 percent, by buying a major stake in Kbro in a deal worth NT$32.8 billion (US$1.02 billion).
“We did not expect the extra conditions,” Taiwan Mobile spokeswoman Josephine Juan (阮淑祥) said. “We will do our best to fully comply with the regulator’s requests.”
The acquisition, however, would help boost competition in the broadband Internet market and would meet the government’s policy of encouraging digital convergence, the commission said.
By offering “multiplay” services, Taiwan Mobile would emerge as a big broadband competitor to Chunghwa Telecom Co (中華電信), the nation’s biggest telecom operator which also dominates the nation’s Internet access market.
However, Taiwan Mobile will be prohibited from operating more than 21 cable TV programs within three years after its purchase of Kbro takes effect, the FTC said.
Taiwan Mobile-Kbro deal will not have a significant impact on the mobile and fixed-line markets, it said.
The company is also restricted to gouge charges on TV programs suppliers among other new regulations.
TC said, after collection crucial opinion from telecom regulator the National Communications Commission.
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