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September 25, 2017

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4G services may be launched in first half of '14 at the earliest: NCC

TAIPEI, Taiwan -- With 4G license approval passed by the National Communications Commission (NCC) yesterday, local telephone giants may roll out 4G services in the first half of 2014 at the earliest.

The NCC granted 4G operation permissions to Chunghwa Telecom (中華電信), Taiwan Mobile (台灣大哥大) and Far EasTone Telecommunications (遠傳電信) yesterday.

The NCC said the phone companies will roll out simple yet diversified mobile plans that are designed to be low in price. Unlimited usage and high-speed Internet packages are among the plans that will be rolled out in the initial stage.

In an effort to satisfy different consumer demands, phone companies may provide high-, mid- and low-end usage plans, the NCC said. The commission is also requesting full information disclosure to ensure consumer rights protection.

Telephone Companies Race to Provide 4G

In order to provide 4G services to consumers quickly, local telephone companies have been actively building Internet hardware facilities. The NCC has also hastened its review and license approval processing. It only took about one week after the phone companies' license applications were filed for them to be approved.

According to the regulation, upon the obtaining of the 4G operation license, the new service should be launched within six months. As such, the telephone companies may launch the service in the first half of 2014.

In addition to laying out 4G infrastructures in major metropolitan areas, telephone companies are expected to actively promote 4G-enabled smartphones in the near future. Before formally launching 4G services, users of 4G phones are expected to exceed 1 million, Chunghwa Telecom said. Taiwan Mobile and Far EasTone are expected to roll out self-made 4G phones in May.

Impact on Financial Statements

4G, short for fourth generation, is the fourth generation of mobile telecommunications technology succeeding 3G. The new technology allows for faster media download. For high-definition videos that take 3G an hour to download, it would be only two minutes in 4G's case. The new service is expected to alleviate 3G traffic, in addition to facilitating multimedia related development such as high-definition videos and mobile games.

Analysts said that the new 4G service is likely to impact phone companies' short-term financial performance, as they will be required to list 4G license related costs. Phone companies will also provide smartphone compensation as part of their promotion campaigns. As a result, all three telephone giants may lower their forecast for 2014 revenues. For instance, Taiwan Mobile's profit may drop 10 percent in the second quarter.

Some analysts forecast that Chunghwa Telecom and Taiwan Mobile will launch 4G services in July, while Far EasTone will launch later in the third quarter. Chunghwa Telecom said it is the only company to obtain the highest 35 MHz spectrum.

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