Local telecoms can start cobuilding and sharing 5G networks on Wednesday next week when the Telecommunications Management Act (電信管理法) takes effect. By easing restrictions, the National Communications Commission aims to accelerate the deployment of 5G base stations and expedite commercial launches of high-speed, low-latency services. Sharing the infrastructure would significantly reduce construction costs, which are about three times pricier than those for 4G networks, but it might not drive down 5G service fees soon enough for average consumers.
All five telecoms in January joined the government’s 5G bandwidth auction to get a piece of the spectrum, driving total bids to the world’s third-highest, at NT$142.12 billion (US$4.79 billion). They all obtained part of the 5G spectrum, which would be a major bargaining chip in negotiations for network sharing.
The telecoms have said they are open to cooperation, including on spectrum sharing, but the truth is that major players are reluctant to open up, given the scarcity of spectrum resources and intense competition.
Chunghwa Telecom and Far EasTone Telecommunications do not feel the urgency to strike a deal for spectrum sharing, as they were the biggest winners in the auction, securing 90 megahertz (MHz) and 80MHz respectively of the 3.5 gigahertz (GHz) frequency band, and 600MHz and 400MHz respectively of the 28GHz frequency band. They are at an advantage in building better 5G coverage and snatching up subscribers by offering services earlier than their rivals.
Far EasTone said it would consider spectrum sharing, but it is first prioritizing construction of 5G infrastructure. It aims to make its 5G network available to 50 percent of the nation’s 24 million people by the end of this year.
Taiwan Mobile is soon likely to unveil a strategic partnership with smaller player Asia Pacific Telecom by sharing some of its 60MHz of the 3.5GHz frequency band, extending their cooperation on 4G base stations leasing, it said in a business plan. Asia Pacific Telecom needs the spectrum, as it withdrew from the auction when the prices peaked.
The 3.5GHz frequency band is called the “golden band,” as telecom companies can build networks rapidly with it. Asia Pacific Telecom could offer to swap frequencies with its 400MHz of the 28GHz band, which is more suitable for building private networks for industries rather than average consumers.
Taiwan Mobile is apparently alone among the big three telecoms in its willingness to share infrastructure. Company chairman Daniel Tsai (蔡明忠) last week said it would be a global trend to utilize blends of low, mid and high-band coverage to deliver comprehensive 5G services when 5G becomes mainstream technology. Tsai called for further relaxation of rules to allow telecoms to share the low 700MHz band, which is used by 4G service providers.
Chunghwa is to debut its 5G services at the end of this month, or early next month. Far EasTone said it would roll out services “within days” after Chunghwa. Taiwan Mobile plans to launch 5G in the third quarter of this year.
5G services would not arrive in Taiwan at the same time as in many other countries, and it would not come cheap. The price threshold of 5G service is likely to be NT$999 or NT$1,000 per month, industry experts have said, which is much higher than the lowest flat rate of NT$499 for 4G. Some experts have said that 5G fees could be 20 to 40 percent higher than 4G fees. Tsai has said he hopes the monthly charge would be up to NT$3,399, compared with the commission’s price cap of NT$1,399.
It is worth watching whether such high prices would delay 5G adoption when it arrives this summer.
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