The number two man at the French telecom powerhouse, Alcatel, is highly optimistic about Taiwan's third-generation (3G) market, saying the nation is poised to become one of the leading telecom countries in Asia Pacific, along with Japan and Korea.
"The time for 3G services to take off in Taiwan is going to come soon. By 2005, approximately 15 percent of citizens around the country will be 3G users," said Ron Spithill, executive vice president of Alcatel.
PHOTO: ALCATEL
Spithill explained that, with the number of broadband-Internet subscribers and mobile-phone users growing rapidly, Taiwanese demand for mobile Internet services appears high.
The executive predicted that 3G will fare better than it has in Europe since the license pricing strategy in Taiwan is much more reasonable than in Europe. "The license fees charged here are more affordable," Spithill said.
Late last year Alcatel demonstrated its growing commitment to Taiwan's telecom sector by announcing plans to invest NT$93 million (three million euros) in a 3G appliance testing center in Taipei, Spithill said.
Besides having strong ties with Taiwanese telecom giant Chunghwa Telecom Co (中華電信), Alcatel has also aligned with Japan-based Fujutsu to provide telecom equipment and solutions to 3G operators worldwide. International customers include Orange in France, TWN in Portugal, ETA in Poland and KB Impuls in Russia.
Meanwhile, one industry watcher said that, although Alcatel was awarded a NT$7.1 billion (US$218.3 million) ADSL contract with Chung-hwa Telecom last year, and these two ventures have a joint venture telecom firm, these connections may not directly benefit the French company's 3G prospects.
"Since Chunghwa is a state-run company, all business contracts have to be auctioned openly rather than choosing partners by themselves," said Nathan Lin (
Entering Taiwan in 1973, Alcatel set up a local subsidiary, Taiwan International Standard Electronics Ltd (
Meanwhile, another pundit from a government think tank said Alcatel's 3G market expectation is "over-optimistic."
"Alcatel is the wireless equipment provider, so, of course the company will try to say something positive," said Su yu-yi (
Delays in making 3G reality may slow future growth potential.
"I believe that, by 2005, 3G services will still be in the initial stage, with less than 10 percent of mobile users connecting to it," Su said.
The major hurdles -- according to the Japanese experience -- are handset over-heating, short battery life and hefty cellphone costs, Su said.
Japan's leading mobile phone operator, NTT DoCoMo, launched the world's first 3G service in October last year. But the public's reaction has not been good, with many mobile phones malfunctioning and NTT being forced to lower their market estimate for this year, Su said.
Su stressed that the foundations for a 3G service have not been laid yet. "Currently, all of the mobile operators, system builders and application suppliers are still `testing and searching' better solutions, and these steps take time and a huge investment," Su said.
Taiwan started its auction of 3G licenses last Wednesday, with six telecom conglomerates competing for five licenses to offer high-speed wireless Internet services. The bidding process is supposed to end by the end of January.
The six contenders are Taiwan Cellular Corp (台灣大哥大), Chung-hwa Telecom, Yuan-Ze Telecom Co (遠致電信), Asia Pacific Broadband Wireless Communication Inc (亞太行動寬頻), 3GO Telecommunications Corp (世界全通) and Taiwan PCS Network Inc (聯邦電信).
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