Gov’t to issue five 3G licenses by year-end

Alfred Lee, The China Post

The government is expected to issue five licenses to third generation (3G) cellular phone operators, according to Directorate General of Telecommunications (DGT), the government agency that is in charge of the issuance of licenses to 3G operators. Although more than 10 companies expressed their intentions to apply for the 3G licenses, the poor economic situation would make it difficult for potential investors to raise the capital.

The DGT expressed its hope that companies of the same business group would only apply for one license. This will limit the qualified bidders to seven companies or business groups. Companies, which are interested in getting the 3G licenses, include Chunghwa Telecom, Taiwan Fixed Network, Eastern Broadband Telecommunications, New Century InfoComm, Taiwan Cellular Corp., FarEasTone, KG Telecommunications, Mobitai Communications, TransAsia Telecommunications, 3GO Company, Aurora Group, and the other two companies. Taiwan Cellular Corp., Taiwan Fixed Network, and TransAsia Telecommunications are of the same business group, which would only be qualified to get one license, according to the DGT.

In order to present the conditions and prerequisites of a bid to be held by the end of this year, the DGT recently invited potential investors to a meeting. The DGT said all the six current cellular phone operators attended the meeting.

The DGT will hold another public hearing by the end of July, publish the 3G telecommunications administrative regulation in August, and process the applications for 3G licenses in November. The DGT will screen the qualifications of the applying companies from mid November to early December. It will tender the bid in December. Industry sources estimated that the cost to get a 3G license is about NT$20 billion. Since it will take one and a half years to build the 3G transmission system, Taiwan is expected to have 3G phone services after mid 2003.

The sources also said that although the government had decided to issue the 3G licenses by the end of this year, other countries such as Japan, South Korea, and Italy had all postponed the deployment of 3G services in the face of a slowed economy. The issuance of 3G licenses in Taiwan would allow the government to generate an income of NT$100 billion.

Certain potential 3G providers, including Chunghwa Telecom, FarEasTone, Taiwan Cellular Corp., expect the government to postpone the issuance of licenses by one or one and a half years because of a lack of successful 3G operations cases in other countries.