Chunghwa Telecom shares retreat on 5G infrastructure concerns

Analysts attributed the retreat to investors’ concerns about the time needed to complete its ambitious plan

The 5G logo is seen in a press conference in Taipei on June 30, 2020. (CNA)

TAIPEI (The China Post) — Chunghwa Telecom’s (中華電信) share price dropped 0.8 percent on Thursday amid uncertainties on its 5G infrastructures, two days after it rolled out its 5G offer.

Analysts attributed the retreat to investors’ concerns about the time needed to complete its ambitious plan, according to Chinese-language media.

Chunghwa Telecom has rolled out 2,000 cell towers nationwide so far. The company expects to install 4,000 by the year’s end and 10,000 within three years.

Fifth-generation wireless networks are touted as the next technological breakthrough given their speed. They are set to replace 4G, the fourth-generation network, which arrived about 10 years ago.

President Tsai Ing-wen, center, reacts during a press conference on June 30, 2020. (CNA)

President Tsai Ing-wen (蔡英文) has announced that her administration will invest NT$20 billion over the next four years to help develop the infrastructure of Taiwan’s 5G services.

When Taiwan rolled out its 4G program, however, the large telecommunications networks in Taiwan, including Chunghwa Telecom, Taiwan Mobile (台灣大哥大), FarEasTone (遠傳), Taiwan Star Telecom (台灣之星) had battles over coverage.

As it stands, Chunghwa Telecom and Taiwan Mobile have already unveiled the costs of their respective data plans. FarEasTone has announced that it will release its 5G services on July 3.

Rightfully, there are fears that what happened with 4G will happen again when 5G is officially launched by all these telecommunication companies.

In terms of the effectiveness of 5G technology, a case study from South Korea shows that it has both its pros and cons.

In the status quo, according to Tefficient, a public analysis organization, Taiwan dominates the rest of the world in average data usage per subscription. However, in terms of growth, countries such as Mexico beat out Taiwan.

South Korea, where 5G has been implemented, was able to re-establish growth. However, it is yet to be seen whether Taiwan has the proper infrastructure in place to carry out such a system.

The network has also received a barrage of criticism. The Korea Herald reported on June 30 that 5G users were “only able to use the fastest network 15 percent of the time”.

It furthers that despite the South Korean government’s “strenuous efforts, 5G coverage has been limited here, especially in indoor environments, leading to consumer complaints.” In light of this, the government has announced that it will aim to install a further 2,000 indoor 5G stations this year.

Only time will tell whether Taiwan’s government’s money and effort will help establish a strong 5G network in Taiwan. In the meantime, investors should be wary of an impending fight between the large telecommunications network.