BMI's Executive Summary

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There are two major movements sweeping across the Taiwanese telecoms industry;

1) The development and expansion of the 3G sector;

2) Government support for WiMAX service adoption and equipment manufacturing.

At the end of September 2007, there were 4.393mn 3G subscribers in the Taiwanese mobile market, against 3.633mn in the previous quarter, revealing an increase of 20.9%. Leading growth in the 3G sector for the first time has been FarEasTone (FET), with 329,000 net additions in the quarter, this accounted for 43.6% of the total 755,000 net additions. However, Chunghwa Telecom continued to dominate the 3G sector, with a 45.4% share of the overall market, driven by 308,000 net additions during the quarter. The operator has promised to invest US$4bn over the coming five to seven years, as it looks to fend off rivals' FET and Taiwan Mobile, both of which have now crossed over the 1mn customer mark threshold. The operator is intent on deploying additional handsets, of which 10 were expected to be launched in late 2007 or early 2008, and all with a subsidised price of under US$31. BMI is encouraged by this level of competition in the sector and believes that 2007 could end on 4.6mn 3G subscribers rising to 19.8mn at the end of our forecast period in 2012.

Since the WiMAX licences were awarded, FET has sought to deploy its network as quickly as possible. The operator contracted Nortel Networks, Motorola and Alcatel-Lucent all in under a week to work on its WiMAX network. Although the operator does not face competition from its mobile rivals, there remain five other rivals in the sector. FET remains aware of the importance of WiMAX to the country's M-Taiwan project, with the government intent on turning Taiwan into a major hub for both WiMAX services and equipment. However, BMI notes the rising competition from the mainland and Vietnam, which have welcomed a growing number of vendor research and development (R&D) and production facilities. Indeed, this is not only the case for foreign companies, but increasingly for domestic companies as other locations offer low value-added production facilities.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Taiwan

SWOT

Taiwan Business Environment Industry SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Taiwan Telecoms Sector – Fixed-lines – Historical Data & Forecasts

Internet

Table: Taiwan Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: Taiwan Telecoms Sector – Mobiles – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Table: Population And Output

Chapter 5 - Country Snapshot: Taiwan Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Section 2: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Market Structure

Competitor Analysis

Table: Key Players: Taiwan Telecoms Sector

Table: Selected Operators Financial Indicators

Fixed-Line Overview

Table: Regional Fixed-Line Penetration Overview

Internet Overview

Table: Regional Internet Penetration Overview

Mobile Overview

Table: Regional Mobile Penetration Overview

Market Data Analysis

Fixed-Line

Internet

Mobile

Table: Taiwan Mobile Market, Q306

Taiwan Net Additions (September 2006)

Table: Taiwan Quarterly Mobile ARPU, 2003-06 (NTD/month)

Table: Taiwan Market MOU 2005-06 (bn mins)

Table: Taiwan Market Churn Rate (%)

3G

Table: Taiwan 3G Market Breakdown TARGET - June 2006

Table: Taiwan Top Three 3G Mobile Market, Q306

Taiwan Net Additions (September 2006)

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Operators

Chunghwa Telecom

Taiwan Mobile

Far EasTone

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

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BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: