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Hon Hai wades into fiber optic Internet service

TAIPEI, Taiwan -- A joint venture by Hon Hai Precision Industry Co. (鴻海精密) and Tai Tung Communication Co. (台通光電), is expected to roll out high-speed fiber optic Internet service later this year, capable of running VoIP communication technology.

The joint venture, Taiwan Intelligent Fiber Optic Network Consortium (Taifo), yesterday obtained the National Communications Commission's approval to operate indoor Internet services in Taipei.

Sources say Taifo will roll out 100 Mbps and 300 Mbps Internet services as well as phone service in Nanagang District and Neihu District. Prices will be 10 percent below Chunghwa Telecom's (中華電信) prices.

Expansion Plan in the Rest of the Year

Taifo has performed contract work to set up fiber optic networks for the Taipei City Government.

Taifo currently has the capacity to run fiber optic Internet in about 7,000 households. It plans to provide the service to about 10,000 households by the end of this year, extending service coverage to 60 percent by the end of the year, and to 80-90 percent by the latter half of 2015. Besides Neihu and Nanagang, the service will also be available in Songshan District this year, and many more districts next year.

Taifo has a net worth of NT$1.31 billion, with Tai Tung owning more than 50 percent and Hon Hai owning 28 percent. With its bright outlook, Tai Tung Communication's share price grew more than 4 percent despite an overall plummet in the local stock market yesterday.

Tai Tung Communication's consolidated revenues totaled NT$693 million in the first half of 2014, up 77 percent from the same period last year. Institutional investors estimate the company's EPS at NT$2 or more. As the company rolls out fiber optic service later this year, analysts forecast even better performance in the second half of the year.

Competing Head-on with Chunghwa Telecom

Hon Hai Chairman Terry Gou (郭台銘) had laid out a plan to wade into “eight screens, one net and one cloud,” the number of electronic devices with screens, the fiber optic Internet and cloud technology. Taifo's fiber optic Internet service represents Hon Hai Group's ambition to finish “the last mile.”

In addition to the license to run the fiber optic service, Hon Hai will soon merge with Asia Pacific Telecom (亞太電信) to launch 4G wireless service, competing head-to-head with the once state-run telecommunication giant Chunghwa Telecom.

Hon Hai's vice president Lu Fang-ming (呂芳銘) has taken the helm at Asia Pacific in order to facilitate cooperation between the two companies. Asia Pacific has been active in erecting infrastructure in order to roll out 4G service as quickly as possible. The service is expected to be rolled out in the first quarter next year.

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