The auctioning of Taiwan's third-generation (3G) wireless licenses ended yesterday, with bids totalling NT$48.9 billion -- NT$15.9 billion or 45.5 percent more than the floor prices set by the government.
"We are happy to announce that the government successfully issued five licenses, which will transform Taiwan into an advanced telecom market," said Chien jen-ter (簡仁德), chief of the Directorate General of Telecommunications (DGT).
The 180-round, 19-day bidding marathom left five companies standing, after 3GO Telecommunications Corp (世界全通) dropped out of the auction yesterday.
The licenses awarded to Taiwan Cellular Corp (台灣大哥大),Yuan-Ze Telecom Co (遠致電信), Chunghwa Telecom Co (中華電信) and Asia Pacific Broadband Wireless Communication Inc (亞太行動寬頻) sold for just over NT$10 billion each, while Taiwan PCS Network Inc (聯邦電信) bought its license for NT$7.7 billion.
Third-generation high-speed wireless data services enable users to transmit e-mail, video and music via cellphones, and are expected to be a popular and profitable mobile service in the next few years.
According to industry analysts, the future size of the local 3G market looks attractive.
"We estimate that in 2010, Taiwan's 3G market will generate up to NT$34 billion annually in sales," said Alex Wu (吳興國), an analyst at KGI Securities Corp (中信證券).
The 180-round auction put Taiwan in the record books, surpassing Germany's 14-day, 173-round record in 2000.
Auctions for 3G licenses in Britain and Germany netted a combined US$78 billion in 2000, although the mobile operators involved later learned that the multi-billion price tags put a huge financial burden on them.
Meanwhile, the Taiwan government said yesterday's closing bids were "reasonable."
"Based on our research estimates that licenses should be offered for at least NT$10 billion, the closing bids are acceptable for both the government and contenders," said Vivian Wang (
KGI Securities' Wu agreed, saying big players can afford to pay.
"Major players like Taiwan Cellular and Chunghwa, who enjoyed more than NT$50 billion in annual sales last year, can definitely pay for the licenses easily," Wu added.
Government regulations require license holders to pay 30 percent of the bid price within 30 days and the remaining 70 percent in installments spaced over the next 10 years.
In addition, operators have to set up at least 250 base stations around the nation by 2004 in order to get operating licenses.
One of the winners expressed confidence that they will be able to meet those requirements, saying they plan to begin service early next year.
"We are very confident about the 3G market and will try our best to enter the market as early as possible," said Jason Wu (
In addition to its local shareholders, Taiwan PCS Network is seeking new investment from several international telecom players, Wu said.
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