Taiwan eyes role as WiMax epicenter

Country will issue six licenses next month allowing operators to offer the wireless broadband service, and aims to be major global supplier of WiMax equipment.

SINGAPORE--Taiwan will issue WiMax licenses to six mobile operators next month, marking another milestone in the government's attempts to champion the country as a major industry player for the wireless platform.

Thirteen mobile operators are jostling for the WiMax licenses, where three applicants each from the northern and southern parts of the country will be rewarded with a license. The government also intends to issue one more license in another two years, bringing the total to seven.

"The mobile market in Taiwan is very competitive, with everyone trying to grab a share of it," said Mu-Piao Shih, vice president of mobile business group at incumbent Chunghwa Telecom, during a session Thursday at CommunicAsia.

Incumbents are getting into WiMax only to protect their market share from new players, Shih said, noting that it is not easy to churn revenues initially because WiMax subscriber numbers are small.

The Taiwanese government has ambitions to become a leading location worldwide for WiMax field trials, and had embarked on various initiatives since 2005 to drive developments in this market.

In September 2005, it approved specifications for the first WiMax phone and pledged to invest NT37 billion (US$1.1 billion) until 2008, in the Mobilize Taiwan (or M Taiwan) initiative to spur WiMax development in the country. Projects awarded in 2005 and 2006 under M Taiwan will see the roll out of 1,000 WiMax base stations across the country by 2008.

To give market entrants a level playing field, the government will set aside two licenses for new players, and which incumbents cannot bid for. Requirements on the new operators will also be less stringent, where plans for license fees to be set at a minimum 1.5 percent of their annual revenue.

Shih said: "Taiwan plays an important role in the research development of WiMax." He noted that there are two testing houses in the country to evaluate WiMax deployment projects, including trials that involve chipsets, customer premise equipment (CPE), base stations and applications such as IPTV, healthcare and online games.

By promoting the development of the wireless broadband technology, Taiwan hopes to be a major supplier of WiMax equipment by 2012, with a goal to produce 90 percent of the world's market for CPEs, Base Transceiver Stations (BTS) and backhaul infrastructure.

Increasing commercial viability
Shih said: "[We are] working very hard to promote our WiMax because terminals are too expensive." He noted that the mass market will not be able to afford such devices, leaving only the business segment as a potential customer.

A standalone WiMax network is also costly to operate because the average revenue per user (ARPU) will initially be low and transmission cost is high, he added. However, Shih said that WiMax can be integrated with 3G gradually as users can share the same SIM card for to access the service. That might help defray some of the costs, he said.

WiMax service is already commercially available in Singapore, Pakistan and some cities in Malaysia, while WiMax trials are currently ongoing in various countries across the region including Vietnam and India.

According to consultancy Senza Fili Consulting, there could be 54 million WiMax subscribers worldwide by 2012.

Georgina Tang is a freelance IT writer based in Singapore.