The National Communications Commission (NCC) yesterday said service rates for fourth-generation (4G) telecommunication services would not be higher than those of the third-generation (3G) services, and no government funds would be used to help telecom carriers build base stations for 4G service.
Commission officials attended a meeting of the legislature’s Transportation Committee to brief lawmakers about the start of 4G service and estimated rates.
Democratic Progressive Party (DPP) Legislator Lee Kuen-tse (李昆澤) and several other lawmakers mentioned that government had earned NT$118.65 billion (US$3.96 billion) through its auction of the 4G spectrum, about twice what it made off of the 3G spectrum auction.
Consumers may end up paying the cost through high rates for 4G service, Lee said.
Lawmakers also asked if the commission intends to ban flat rate service plans for 4G, which offer consumers unlimited access to the mobile Internet service for a set fee.
Chinese Nationalist Party (KMT) legislators Lee Hung-chun (李鴻鈞) and Luo Shu-lei (羅淑蕾), and DPP Legislator Kuan Bi-ling (管碧玲) voiced opposition to a proposal to use the tender bonds from the auction to help 4G carriers build their service infrastructure.
National Communications Commission Chairperson Howard Shyr (石世豪) said the 4G licenses would be valid for 15 years, which means that 4G and 3G licenses will coexist for some time. Consumers would have no incentive to switch to 4G service if better service rates could not be offered, he said.
Shyr stressed that he had never said that telecoms could not propose 4G service plans that would give consumers unlimited mobile Internet access, adding that he only said that market competition would force carriers to offer more diverse service plans to meet consumers’ demands.
He also said that the government would not help telecom carriers fund the building of 4G base stations.
Commission spokesperson Yu Hsiao-cheng (虞孝成) said that 4G operators were unlikely to overprice their service.
“The mobile communication service market has five carriers offering 3G service. Of the six carriers who have acquired 4G spectrums, two are newcomers to the market,” Yu said. “Aside from competing with their peers, 4G operators will need to compete with 3G carriers as well. They will have to be more discreet in setting 4G service rates so they do not scare off consumers.”
Chunghwa Telecom has already announced that it intends to offer offer an unlimited 4G access plan for NT$2,000 per month.
DPP Legislator Tsai Chi-chang (蔡其昌) said he thinks NT$2,000 per month for 4G service is still too much.
“What I am afraid of is that consumers think they are paying the price for a steak, but they will end up getting shredded pork instead,” he said. “Just like the 3G service. People pay a higher price for a slower service.”
Hon Hai Precision Industry Co chairman Terry Gou (郭台銘), whose Ambit Microsystems Corp also acquired 4G spectrums, said it would offer free voice and text messaging service.
DPP Legislator Yeh Yi-jin (葉宜津) said several frequency blocks in the auction are still used by 2G carriers, and the government should help those carriers relocate to different frequencies within a year so that the 4G carriers can start building the infrastructure that they need.
According to information provided by the commission, major telecom carriers in Japan, Hong Kong, the US, the UK, South Korea and Singapore allowed consumers unlimited access to 4G service by paying a flat rate, but they also have fair usage policies capping the downloaded data at a certain amount. Those exceeding these caps either see slower Internet connections or are asked to pay additional costs.
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