Vibo, APBW to tie up to tap 3G telecom market

Taipei, April 19, 2004 (CENS)--Two local third-generation (3G) mobile telecom companies, Vibo Telecom Inc. and Asia Pacific Broadband Wireless Communications Inc. (APBW), will soon form a strategic alliance to compete with another three major rivals in Taiwan.

Vibo is an affiliate of the Kinpo-Compal Group, a leading local electronic and information technology (IT) conglomerate, and APBW is affiliated with the Eastern Multimedia Group, a leading media conglomerate that has been actively diversifying into telecom and cable TV businesses.

Rock Hsu, chairman of Vibo and the Kinpo-Compal Group, said that the Vibo-APBW tie-up would join the code division multiple access (CDMA)-2000 technological front and jointly construct communication network on the island to push the 3G telecom services as soon as possible.

The Vibo-APBW tie-up is set to compete with another three major mobile telecom carriers, including Chunghwa Telecom Co., Taiwan Cellular Corp. and Far EasTone Telecommunications Co., Ltd.

Hsu denied a recent market rumor that Vibo would invest NT$2 billion (US$60.79 million at US$1: NT$32.9) to get some stakes in APBW. The chairman claimed that Vibo will cooperate with APBW in joint business development and network infrastructure construction.

APBW maintained a very low profile toward the cooperation project, saying only that it will be a good thing for more newcomers to join the CDMA2000 market because the expanded market scale is expected to help cut the cell-phone prices.

Vibo originally owned the commercial operation license for personal access communications system (PACS) low-power mobile communications in Taiwan but returned the license to the Ministry of Transportation and Communications (MOTC) recently due to no matured products for the market.

MOTC plans to auction the PACS 5-megahertz (MHz) bandwidth for low-power mobile communication soon and Vibo expressed willingness to join the bid, saying that it would utilize its CDMA2000 3G technology for the targeted new business.

Industry sources said that Vibo adopted the wideband code division multiple access (WCDMA) technology to apply for the low-power mobile communication license last time but turned to the CDMA2000 technology recently for the scheduled license bid. Such a direction shift, the sources added, surprised most of its counterparts such as Chunghwa Telecom and Far Eastone.

According to Hsu, Vibo decided to turn to the CDMA2000 technology due to the immature WCDMA technology and small WCDMA cell phone production volume. The CDMA2000 technology, Hsu added, could be applied to the PACS bandwidth.

Hsu also added that Vibo tried to form a strategic alliance with APBW as the latter has adopted the CDMA2000 technology. So, the chairman said, Vibo would jointly set up the CDMA2000 telecom infrastructure with APBW, or choose the mobile virtual network operator (MVNO) method to rent network capacity from APBW for pushing its 3G telecom services as soon as possible.

Such a strategy, Hsu claimed, would achieve a multi-win situation, including earlier market entry for Vibo; expanded market and service opportunities for telecom companies; escaping idle resources and adding new bidding incomes for the government; and more choices and services for subscribers.

Hsu claimed, however, that Vibo would tap the 3G market by first utilizing the CDMA2000 technology, but won't rule out choosing a proper time to apply its WCDMA technology in the market.