Taiwan removes more ties from its telecom industry

Taipei, July 7, 2004 (CENS)--Taiwan's telecom regulator Directorate General of Telecommunications (DGT) has decided to permit the island's pure cable owners to run telecommunications services and lower entry thresholds for new entrants of fixed-line services.

For a long time, the island's pure cable owners such as the state-run Taiwan Power, China Petroleum, Taiwan Railway, Taiwan Water Supply and Great Taipei Gas have been forbidden from offering any telecom service over the optical-fiber networks and undersea cable systems they paved along their infrastructure lines. They can only lease the networks to existing telecom providers.

Recently, DGT decided to allow them to run Internet service provider (ISP) services on their cable networks and lease their networks and cables to non-telecom providers. DGT has revised related regulations to remove the limitations, which are pending approval at the Legislative Yuan.

In the meantime, the telecom regulator also decided to set basic asset requirement for new entrants of fixed-line network services at only NT$16 billion (US$484.8 million at US$1:NT$33) and basic subscriber line requirement at only 400,000 lines or ports, much lower than previous requirements of NT$40 billion (US$1.2 billion) and one million lines or ports for established providers. Besides, it decided to issue unlimited number of licenses this time. Last time, it issued only three fixed-line service licenses, each won by Taiwan Fixed Network Co., Ltd., New Century InfoComm Co. and Eastern Broadband Telecommunication Co., Ltd.

DGT explained the decision was made in agreement with WTO mandate. DGT will begin receiving new applications in September.

The new regulation, DGT stressed, will take effect without retroaction, slashing the expectations that existing providers might be allowed to reduce basic asset and subscriber lines to newly regulated level.

DGT explained that the requirements must be lowered otherwise the competition will be unfair to new entrants from the point of view that the limited domestic market has been completely sliced by the three private telecom providers and the state-run Chunghwa Telecom.

Since 1999, when DGT began opening fixed-line service market, the organization has so far issued three fixed-line service licenses and 47 circuit-leasing licenses.