TAIPEI, Taiwan—Taiwan awarded five third-generation (3G) licenses following a 19-day auction that saw bid totals much higher than analysts had expected. Total bids in Asia’s first 3G auction reached T$48.9 billion (US$1.4 billion), up nearly 50 percent over the state-set minimum prices.
The auction ended after 3GO Telecommunications, a consortium that included local PHS operator Fitel, pulled out of the bidding, leaving only five participants.
Analysts remained cautious about the outcome, stating the sums may be hard to win back through profitable services. Moreover, Taiwan’s telecom regulator released a statement during the auction, warning operators to take a cautious stance regarding the licenses’ worth.
Incumbent operators Chunghwa Telecom, owned by the government; Far EasTone, in which AT&T holds a stake; and Taiwan Cellular, partially owned by Verizon Wireless, all won licenses. In addition, newcomers Taiwan PCS Network and Eastern Broadband Telecom, a fixed-line operator, also walked away with 3G licenses.
Minimum bids ranged from US$120 million to US$220 million, depending on the amount of spectrum available. Another incumbent operator, KG Telecom, pulled out of the process before it began.
Taiwan has a mobile penetration rate of more than 90 percent, and consolidation is expected.
Hong Kong scrapped an auction after it received only four bids for four licenses. Japan and Korea awarded their 3G licenses through a “beauty contest” process. Many of Europe’s mobile operators are facing heavy debt loads following auctions that saw licenses sold for billions of dollars each in many European countries.
