The ever-competitive mobile market of Taiwan is bound to face major changes in the foreseeable future, as some of its important players have inked merging deals.
In more details, the Taiwan’s National Communications Commission (NCC) has approved the mergers of Taiwan Mobile with Taiwan Star Telecom and Far EasTone with Asia Pacific Telecom (APTG), seeing a shrinkage of the market from the existing five to three players.
The two mergers reportedly have one thing in common, striking deals to merge via a stock-for-stock transaction. The deals are expected to generate more effective use of combined 5G spectrum holdings, the reduction of unnecessary overbuild, and the energy efficiencies gained by shutting down redundant 3G and 4G base stations. And more importantly, this would, in overall, result in the additional scale of these players, equipping them with a stronger stance to challenge the dominance of incumbent operator Chunghwa Telecom.
The deals, however, did not come without hurdles. Naturally, such a shift in the Taiwanese market will require significant regulatory scrutiny, with the NCC having already applied various conditions, including 5G rollout targets and assurances that subscriber services would not be disrupted as they were transitioned from one network to another.
Another issue in place is the spectrum ownership of Taiwan Mobile. The merger would increase the company’s sub-1 GHz spectrum holdings to 60 MHz, while there is a 50 MHz limit imposed on the original spectrum auction. As a result, the NCC has asked the company to return the 10 MHz of additional spectrum to the regulator. As a response, Taiwan Mobile has argued that all the nation’s telcos have exceeded the spectrum holding limits in various frequencies, claiming that to return the 10 MHz of bandwidth would trigger serious consequences for customers.
With around 12.42 million reported in September 2022, equating to a market share of over a third, Chunghwa Telecom currently dominates Taiwanese market. Taiwan Mobile and Far EasTone, meanwhile, each have a market share of around a quarter. Taiwan Star and APTG are both smaller players, each with around 7%.
The landscape now, with the two deals coming in, would create equal prominence for each players: Chunghwa Telecom, Taiwan Mobile–Taiwan Star and Far EasTone–Asia Pacific Telecom (APTG), ushering to a new era coined “New Three Kingdoms Era” for the Taiwanese mobile market.