On June 25 2010 Taiwan’s third-largest telecommunications company, Far EasTone Telecommunications Co, announced that its board had approved a public tender offer for shares of its fixed-line subsidiary, New Century InfoComm Tech Co. Far EasTone, which currently owns 695 million shares (or a 26.74% stake) of New Century, will pay a total of NT$20.81 billion to acquire the remaining 73.26% shares through this tender offer. Far EasTone becomes the third operator providing fixed-mobile convergence
Far EasTone’s move to acquire New Century came as no surprise to the market. In April 2008 Far EasTone consolidated its telecommunications subsidiaries, including New Century and broadband access service Digital United (Seednet), into a single brand. In March 2009 New Century acquired Seednet to become the second largest internet service provider in Taiwan. In addition to the recent fixed-mobile convergence merger, in 2007 Far EasTone merged with Qware Inc – the biggest Wireless Local Area Network
(WLAN) Service Provider in Taipei City – and it obtained a Worldwide Interoperability for Microwave Access (WiMAX) service licence in December 2009. Far EasTone believes that the cooperation between the group’s mobile and fixed-line networks will achieve a long-term synergy in operating costs. Far EasTone aims to increase revenue and improve cost efficiency to better compete with its rivals, Chunghwa Telecom Co and Taiwan Mobile Co.
Far EasTone has a triple-play service (fixed-line, mobile and broadband), but the other two market leaders have provided a quadruple-play service (triple-play plus television) for years. Chunghwa Telecom, the industry leader, originally offered fixed-line, mobile\ and broadband services, and it recently invested in Global Mobile Corp, a WiMAX operator. Chunghwa also owns a nationwide digital cable television service and provides Multimedia on Demand (MOD), to compete with local cable system operators.
Taiwan Mobile Co, the second runner, acquired Taiwan Fixed Network and Taiwan Telecommunication Network Service Co in 2007 and entered into the cable business in 2005. On July 26 2010 Taiwan Mobile’s chairmen announced a NT$65 billion takeover of Kbro, the largest cable company in the Carlyle Group, through a private investment firm. The deal is arguably the largest telecommunications merger in the Asian market this year.
Arrangements among major telecommunication companies
Far Eas Tone
The largest market
shares in fixed-mobile
Taiwan Fixed Network
New Century Info Commtech co
The largest Asymmetric Digital Subscriber Line(ADSL)operator and invested in one WIMAX operator
Taiwan Fixed Network and Taiwan Telecommunications Networks
Merged with Qware(WLAN)and Seedent(ADSL)and obtained a WIMAX licencr of the southern zone
MOD with 700,000 subscribers
Taiman FixedNetwork Media and Kbro with a total of 1.65 million subscribers
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