News Archive

Taiwan boasts a thriving electronic and computer export industry, and mobile phones clearly appeal to its tech-savvy population. Mobile penetration in Taiwan is among the highest in the world and has been for some time: it has been above 100 percent since 2001 and reached a high of 114 percent in 2003.

Sean Gowran, president of Ericsson Taiwan, says mobile communication holds obvious attractions for the Taiwanese. "People spend the majority of their time outside the home and mobile devices allow them to keep in touch and stay informed," he says.

Recent consolidation of Taiwan's saturated mobile industry has led to three main players - Far EasTone (FET), Chunghwa and Taiwan Mobile - dominating the market. All three, along with 3G upstart VIBO, launched WCDMA networks in 2005 and have started introducing more advanced data services.

Until now, data usage has been limited - even SMS uptake has been sluggish - but Gowran says that, with the advent of 3G, that is about to change. "In a market where there is heavy competition for voice, operators are turning to data services to differentiate their offerings," he says.

"The difficulty of inputting Chinese language characters and the low cost of voice services have impeded SMS development, but this will not be a barrier to more advanced data services. Internet access, music and video downloads are already popular services."

Figures from the Taiwanese Directorate General of Telecommunications put the number of mobile internet subscribers in 2005 at 8.1 million - more than a third of Taiwan's population of 23 million. The number of active 3G users is harder to define. Many operators are migrating 2G subscribers over to WCDMA networks by offering subsidized handsets and cheaper voice. This means that some 3G subscribers are primarily voice-centric consumers.

According to analysts Ovum, greenfielder VIBO is effectively the largest WCDMA operator. It signed up more than 200,000 customers in the six months following launch in December 2006, all of whom are genuine 3G users. Ericsson supplied VIBO's WCDMA core network, transport network and handled the systems integration.

Ericsson is also the preferred supplier to the second-largest operator by 3G handset subscriber, FET. The operator is the first in Taiwan to upgrade its network to HSPA, offering increased download speeds of 3.6Mbps. FET's innovative multimedia offerings include mobile instant messaging, video on demand, music downloading, audio messaging, and mobile e-mail.

Pyramid Research predicts that the trend towards greater data usage will continue, as operators make up for shrinking mobile voice revenues, and account for 16 percent of total mobile revenues by 2011. In an already overcrowded market, operators have to develop richer content to maintain customer loyalty and prevent churn.

Laptops are far more prevalent than desktop PCs and a high proportion of data traffic currently comes from 3G data cards. This is the case even in Taipai and Kaoshiung, where city-wide Wi-Fi is available - partly because of the convenience of not having a separate Wi-Fi account or going through authentication.

Gowran says mobile broadband growth is inevitable. "At the moment, about 90 percent of 3G data usage comes from just 10 percent of users. As the market matures, the aim for operators is to grow data traffic by increasing the percentage of active data subscribers."