"Taiwan Telecommunications Report Q2 2014" Published

Telecoms markets in Taiwan are among the most mature in the region, with high penetration of mobile, fixed-line and broadband services. Furthermore, there has been a strong migration to higher value services, such as wireless data and fibre-based wireline broadband subscriptions in recent years that has helped to offset declining overall subscription growth rates as the market matures. The trend towards higher-value services is expected to continue with the auction of LTE spectrum in late 2013. Despite these positives it should be noted that operators face a number of challenges including saturation, IP substitution and regulatory measures such as cuts to mobile termination rates and requirements to provide free peering. These factors will squeeze revenues over the medium term, but we hold the view they will not outweigh the positive trends in the market and operators will continue to produce positive financial results.

Full Report Details at
- http://www.fastmr.com/prod/800078_taiwan_telecommunications_report_q2_2014.aspx?afid=301

Key Data

* The latest data from mobile operators and the regulator, the NCC, show total subscriptions reached 28.977mnat the end of 2013, up by 0.8% y-o-y. This reflects the slowing subscription growth as the mobile penetration rate increases.
* Although overall subscription growth has slowed, there has been a transformation of the market in recent years as 3G subscriptions increased rapidly, up 9.2% y-o-y to 24.722mn at end-2013.
* The fixed-line sector falters - the latest data from regulator the NCC indicate that it declined by 1.6% y-oy in September 2013, falling to a total 12.28mn subscriptions.

Key Trends & Developments

In August 2013, regulator National Communications Commission (NCC) cleared all seven applicants for the country's 4G licence auction. The 40-day 4G auction was concluded in September 2013 after six companies paid a combined of TWD118.65bn (US$4bn) for 270MHz of LTE spectrum. Among the winners, incumbent carrier Chunghwa Telecom was the biggest spender, paying nearly TWD39.1bn on spectrum in 900MHz and 1800MHz bands. Far EasTone and Taiwan Mobile spent over TWD31bn and over TWD29bn respectively for airwaves in the 700MHz and 1800MHz bands. The other three spectrum winners are Asia Pacific Telecom and Star Mobile Telecommunications, and Hon Hai affiliate Ambit Microsystems, which also secured spectrum in the 700MHz and the least attractive 900MHz bands. The presence of these six competitors will surely make the Taiwanese 4G market competitive, given the significantly higher price they paid for 4G spectrum.

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