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June 23, 2017

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Far EasTone open to collaborative endeavors with rival telecom carriers

TAIPEI, Taiwan -- Far EasTone (遠傳) yesterday announced the company's open stance towards collaborating with other telecoms carriers, while outlining current plans to improve fourth-generation (4G) mobile broadband network coverage through a bandwidth swap with Ambit Microsystems (國碁) that may start as soon as in the latter half of this year.

Last year's heated 4G operating license auctions resulted in bidders acquiring portions across the fledgling network's frequency spectrum. With hopes to consolidate disparate bandwidth blocks held by telecom carriers across the spectrum, Far EasTone yesterday announced its intent to initiate a swap of frequency blocks with Ambit. Far EasTone intends to swap its A2 frequency block at the 700MHz band for the A3 block at the same band held by Ambit. Following the swap, both companies will gain the benefit of operating adjoining blocks of the 4G network.

Reports indicate that Far EasTone Chairman Douglas Hsu (徐旭東) has authorized company President Yvonne Li (李彬) to meet and submit a strategic partnership proposal to Hon Hai Vice President Lu Fang-ming (呂芳銘), and Ambit President Huang Nan-ren (黃南仁). In addition, the company also announced that negotiations with the Taiwan Star Cellular Group (台灣之星) on the joint-development at the 1,800MHz band have been completed.

Although Far EasTone confirmed reports of its willingness in seeking strategic partners, the company, along with Ambit declined to provide further details yesterday.

Most notably, in addition to the swap of frequency blocks, Far EasTone's terms for Ambit include a purchase of 5MHz of bandwidth.

Far EasTone's Terms Deemed Favorable by Experts

Industry experts deemed the terms exceedingly favorable for Ambit, as apart from the benefit of operating adjoining frequency blocks, Far EasTone's offer of purchasing a 5MHz portion in bandwidth will solve lingering concerns of regulatory conformance. Previously, Ambit had finalized its acquisition of Asia Pacific Telecom (APT, 亞太), with the two companies holding a combined 30MHz in frequency blocks at the 700MHz and 900MHz bands, exceeding the National Communication Commission's limit of 25Mhz. In addition, Far EasTone also offered joint-development of 4G network infrastructure, enabling Ambit and APT's to limited bandwidth coverage capabilities. According to industry experts, Ambit and APT currently have about 1,000 cellular towers, and stand to benefit from a partnership with Far Eastone, who has over 10,000 towers. Meanwhile, Far Eastone stands to bolster its presence in the 700MHz and 900MHz bands with the addition of 5MHz from Ambit.

Frequency Block Swap Expected to Go Through Smoothly: Experts

As both companies had acquired their blocks in the 700MHz at comparable costs around NT$6.81 billion, the negotiations over the swap should be completed without complications, said industry experts. Industry experts however, stated that the union between Ambit and APT remains to be decided by the outcome of a swap of shares scheduled to take effect on June 20, in addition to regulatory obstacles hindering Ambit owner Terry Gou's wish to purchase equipment made by China-based Huawei (華為).

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