Taiwan’s looming digital battle will intensify as demand for genuine ‘quadruple play’ grows

By Rebecca Lin and Benjamin Chiang

Across from the Taipei Railway Station, one of the most bustling landmarks in Taiwan’s capital city, SNG (satellite news gathering) trucks line up in front of the Chong Sheng Building, ready to head out in pursuit of a breaking story. The location was once the birthplace of Eastern Multimedia Group chairman Gary Wang’s dreams. In 2006, Wang, sitting in the Eastern Television headquarters in the imposing building, described his vision of a media empire to CommonWealth Magazine. Leaning forward unable to contain his enthusiasm, Wang extended four fingers to make his point. “In four years, the world’s three biggest media headquarters will be in Beijing, New York, and Taipei,” he boldly predicted. He not only was bullish on digital development in Taiwan, he also envisioned Taipei as Asia’s telecommunications hub. But times have changed dramatically over the past six years. Wang was imprisoned at one point and remains embroiled in a legal battle over his role in the embezzlement of NT$41.2 billion from the Wang family business – the Rebar Asia Pacific Group – between 1998 and 2007. Wang was originally sentenced to 18 years in jail, but his jail term was reduced on appeal to five years and eight months in late October 2011. The verdict can still be appealed.

Yet despite his legal entanglements, Wang today has emerged as a critical partner of the Tsai family, who control the Want Want Group, in a fierce battle against a different family also with the surname of Tsai, who control the Fubon Group, to build the dominant telecommunications and media empire in Taiwan. The struggle, once confined to competing cable TV systems, has now extended to other sectors, and Wang’s hands seem to be everywhere. Gary Wang’s Pivotal Position In 2010, Daniel Tsai, the head of the Fubon Group, and his brother Richard Tsai, chairman of Fubon Group subsidiary Taiwan Mobile, formed a separate company called Da-Fu Media Technology Co., Ltd. to get around regulatory constraints, and invested NT$65 billion of their own money to take over cable TV operator Kbro Co. Kbro was once known as Eastern Multimedia Co. and belonged to Wang. In the competing camp, Want Want Group chairman Tsai Eng-meng had his son Tsai Shao-chung found Want Want China Broadband, which is set to acquire Taiwan-based China Network Systems Co. and its network of 11 cable system operators for NT$73.5 billion. Behind the scenes helping put the deal together was Gary Wang. “(Wang) has never abandoned his dream,” says one scholar who has long followed the business tycoon’s moves. Neihu District, in the northeastern part of Taipei, stands out as Taiwan’s media and technology center and is also the epicenter of the battle of the two Tsai families. The 1-kilometer stretch between Ruiguang Rd. (where Kbro is headquartered) and Minquan East Rd., Section 6 (where the China Times Group, the Want Want Group’s media property, has its offices), is the main battleground in the competing families’ quests to emerge as Taiwan’s king of cable. The Tsais’ media businesses have a combined 54 percent share of domestic cable TV systems, controlling the television sets of 2.73 million households or nearly 10 million viewers. The Fubon Group’s diversified portfolio gives it extensive media market penetration. From subsidiary Taiwan Mobile’s 6.57 million mobile phone users and its Momo home shopping network and Momokids channel, to its cable TV network of 1.66 million households, representing a 32-percent share of the domestic market, the Fubon Tsais can reach the eyes and ears of over 10 million people, or nearly half of Taiwan’s population.