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May 28, 2017

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Hon Hai to bid for 4G spectrum license: official

TAIPEI, Taiwan -- Rumors that Hon Hai Precision is keen on getting a 4G license in Taiwan was confirmed on Monday by an official in the National Communication Commission (NCC), who also revealed a long list of new bidders.

Hot on the heels of investing US$8.7 million in a local fiber optics provider, the world's biggest contract electronics manufacturer, know in China as Foxconn, is setting its eyes on acquiring a 4G license in Taiwan.

The bid for the 4G spectrum is part of Hon Hai's "eight-screens-in-one-cloud business strategy," which looks to cover everything from mobile phones to tablets to PCs, TVs and beyond.

Hon Hai has seen its revenue growth slow amid a faster-than-expected decline in iPhone orders. By targeting downstream processes — which occur after the manufacturing of electronics has taken place — the company is hoping to capture more revenue sources. There is a general belief that such steps could eventually enable it to get involved in the entire chain of processes and facilitate the sales of its own product.

Transportation and Communications Minister Yeh Kuang-shih (葉匡時) yesterday revealed other new 4G bidders alongside Hon Hai, including Shinkong Synthetic Fiber Corp. and SRISTC.

Yeh also said that the result of 4G licensing will be announced at the end of August and that he expects to see a decent final price.

The NCC has announced its 4G licensing plan with a starting bid of NT$35.9 billion (US$1.2 billion), and major telecom carriers such as Chunghwa Telecom, Taiwan Mobile and Far EasTone have already expressed their interest in bidding.

There has been speculation that Hon Hai hopes to enter different parts of the chain of processes via cooperation and alliances. Chairman Terry Gou is said to have already been scouting for talents in the telecom and cable industries for possible recruitment, and could possibly ink a 4G market collaboration pact with Ruentex Group President Samuel Yin, but they are still in the initial stages of discussion. Ruentex's is a diversified business, with interests ranging from real estate to textile, finance and retailing.

Ruentex has invested in local 4G operator Global Mobile Corp, but the NCC has ruled that firms applying for 4G spectrum need to have at least NT$6 billion in capital, whereas Global Mobile Corp.'s capital only stands at NT$3.5 billion.

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