TAIPEI, Taiwan-Two Taiwanese mobile operators have agreed to merge, marking continuing consolidation in Taiwan’s mobile market.
Far EasTone Telecommunications said it will acquire KG Telecommunications for about $877 million.
KGT shareholders will be offered to convert one KGT share into 0.46332 Far EasTone share plus 20 cents in cash. In total, KGT shareholders will receive about 806 million Far EasTone shares and $348 million.
The combined operator will have about 7.7 million subscribers, and Far EasTone holds a third-generation license. The merger will allow the two operators to better compete with market leaders Chunghwa Telecom and Taiwan Cellular Corp.
NTT DoCoMo Inc. holds a 20-percent stake in KGT, which offers i-mode-like services in Taiwan with more than 100,000 i-mode subscribers.
Besides Far EasTone, the country’s 3G license holders include Chunghwa Telecom, Taiwan Cellular and newcomers Eastern Broadband Telecom and Taiwan PCS Network.
In 2001, Taiwan Cellular purchased TransAsia Communications, spurring initial consolidation in Taiwan. Mobile penetration in Taiwan is more than 100 percent with many people having more than one wireless phone.
