It’s not just in France that the established triumvirate of mobile operators is being shaken up by a new player. In Taiwan, the big three cellcos – Taiwan Mobile, Chunghwa and Far EasTone – are heading for a price war as they respond to low cost rival Taiwan Star Telecom.
To make matters even worse than the French situation, in which new mobile entrant Free is, for now, confined to 3G, Taiwan Star is also building its own LTE network. This has forced its rivals to reduce the prices of 4G services before they have had a decent window in which to position these at a premium.
Taiwan Star introduced TWD599 ($20) unlimited 4G plans (with two-year contract) this summer, halving the tariffs offered by the other three. Far EasTone quickly reacted, saying it would cut the prices of LTE handsets from HTC, Samsung and LG by TWD1,000-TWD1,500; and Chunghwa reduced its actual LTE tariffs soon afterwards.
The newcomer claims to have covered 85% of the Taiwanese population with LTE now, and says that figure will increase to 96% by year end. The firm, part of the Ting Hsin International Group, was awarded its 4G licence last October and is targeting 20% of the LTE market by the end of 2014, which would be about 250,000 subscribers. Each of the three older cellcos has been selling 4G services since May or June and claims about 200,000 LTE customers.
Achieving its goals will involve heavy infrastructure investment for 4G-only Taiwan Star, and unlike Free Mobile, it does not have significant WiFi on which to rely. The firm has admitted it is unlikely to report a profit for two years because of its investments and the price war.
According to GSMA Intelligence, Chunghwa has 33% of the entire mobile market by connections, while the other two majors have about 23% each. Three smaller cellcos – Asia Pacific Telecom, Vibo Telecom and First International Telecom – share the remaining 20% but none has a 4G licence, although all secured WiMAX rights which could be adapted for TD-LTE in future.