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Taiwan - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Taiwan's incumbent telecommunications operator, Chunghwa Telecom, took over the operational activities of the Directorate General of Telecommunication (DGT) from July 1, 1996, when it was confirmed that the company would be partially privatised within the following five years. However, plans for its privatisation as early as 1998 were postponed. Subsequent attempts by the government to reduce its holding also met with disastrous response from investors. A series of poorly-received auctions, an IPO in October 2000 and an abandoned American depository receipts (ADR) offering scheduled for the first quarter of 2001, merely reduced the government's holding to 95% by late-2002. However, in December 2002, the government completed the auction of a 13.5% stake, reducing its stake to 81.5%. An auction in February 2003 failed, when only 0.08% of the government's stake was purchased, although a 1.7% stake was sold at auction in April 2003, reducing the government's stake to 79.6%. The long-awaited ADR issue in the US finally took place in the summer of 2003 and reduced the government's ownership of Chunghwa Telecom to 64.94%. A further share sale was completed in August 2005, finally taking the government’s holding in Chunghwa to below 50%. Further sales had reduced the government's stake to 41.5% by February 2006 (latest data). Amendments to the telecommunications law were finally passed in November 1999, which paved the way for further liberalisation, particularly of the fixed market. The DGT began accepting applications for fixed network service licences in July 1999, and awarded three such licences in March 2000, having rejected a fourth applicant. All three new operators launched services in mid-2001. The amendments also provided for the award of third-generation (3G) mobile licences, and the licensing of new operators was completed in January 2002. Only one new entrant came to the market, with existing cellular operators also licensed. The most significant development in 2005 and so far in 2006 is the creation of the National Communications Commission, which replaced both the DGT itself and part of the Government Information Office. The NCC brings together the regulation of the telecommunications and media (news/broadcasting) sectors. There are repeated concerns over the independence of the new NCC, and a number of its initial members have already resigned, alleging political interference in the selection of the commission's officials.
This Market Intelligence Report was produced as part of
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