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Taiwan Telecommunications Report Q1 2012
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Taiwan |
Published |
31 January 2012 |
Number of Pages |
107 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
File Format |
- |
The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.
In this quarters update on Taiwa? s telecoms market, we have incorporated the latest available data from Taiwanese telecoms operators and the National Communications Commission. In the mobile sector, we have excluded personal handyphone sytem (PHS) from our subscriber calculations. We now take into consideration subscribers of 2G and 3G technology. At the end of September 2011, we estimate that there were 28.402mn mobile subscribers, representing an increase of 5.1% y-o-y. With regard to forecast, we expect 31.936mn mobile subscribers at the end of 2016, up from 28.795mn at the end of 2011. While the mobile market continues to grow in spite of market saturation, we expect the Taiwanese fixed-line sector to continue on its long-term downtrend in spite of a slight reversal in mid-2011. The biggest threat for the fixed-line industry will come from mobile alternatives such as VoIP. Lastly, the broadband industry in Taiwan is expected to grow on the back of strong demand for mobile broadband solutions. WiMAX remains comparatively unpopular compared to 3G technology. We expect the broadband industry to expand to 28.059mn at the end of 2016.
Taiwan has been a strong supporter of WiMAX with the government initiating several programmes to spur developments in the increasingly marginalised technology. However, we believe that plans by the National Communications Commission (NCC) to release six technology neutral 4G licences in 2013 could be a sign that the government is starting to recognise WiMAXs bleak long-term outlook, and cave into the growth momentum of rival LTE.
The NCC has set its sight on the 700MHz (currently being used by the military) and 2.6GHz (currently idle) frequency bands for 4G services. The technology neutral stance would give telecoms operators the freedom to select the suitable 4G technology, but BMI believes that LTE would be the overwhelmingly preferred option. Although WiMAX services launched in Taiwan in 2009, the NCC reported that there were only 128,748 subscribers at the end of September 2011, which is a considerably poor performance given that there are six WiMAX providers (five if a merger between Vee TIME and VMAX Telecom is completed). By comparison, Japans NTT DoCoMo had 390,000 LTE subscribers in September after launching services in December 2010.
Taiwan retained its sixth position in BMIs latest Risk/Reward Ratings (formerly Business Environment Ratings) for the Asia Pacifics telecoms industry. However, we see downside potential due to the islands economic outlook. Despite our expectations of a sharp slowdown in Taiwans economic activity, growth surprised to the downside, which was more than we anticipated. On a seasonally adjusted annualised basis, the economy contracted 1.1%. Expectations of further slowing in Chinas economy, coupled with a deterioration in Taiwans leading economic indicators, have led us to downgrade our growth forecasts for 2011 and 2012 to 3.6% and 3.4% respectively from 4.3% previously. Our estimates remain below the Bloomberg consensus of 4.9% and 5.0% in 2011 and 2012 respectively and the governments forecasts of 4.6% and 4.4%.
In this quarters update on Taiwa? s telecoms market, we have incorporated the latest available data from Taiwanese telecoms operators and the National Communications Commission. In the mobile sector, we have excluded personal handyphone sytem (PHS) from our subscriber calculations. We now take into consideration subscribers of 2G and 3G technology. At the end of September 2011, we estimate that there were 28.402mn mobile subscribers, representing an increase of 5.1% y-o-y. With regard to forecast, we expect 31.936mn mobile subscribers at the end of 2016, up from 28.795mn at the end of 2011. While the mobile market continues to grow in spite of market saturation, we expect the Taiwanese fixed-line sector to continue on its long-term downtrend in spite of a slight reversal in mid-2011. The biggest threat for the fixed-line industry will come from mobile alternatives such as VoIP. Lastly, the broadband industry in Taiwan is expected to grow on the back of strong demand for mobile broadband solutions. WiMAX remains comparatively unpopular compared to 3G technology. We expect the broadband industry to expand to 28.059mn at the end of 2016.
Taiwan has been a strong supporter of WiMAX with the government initiating several programmes to spur developments in the increasingly marginalised technology. However, we believe that plans by the National Communications Commission (NCC) to release six technology neutral 4G licences in 2013 could be a sign that the government is starting to recognise WiMAXs bleak long-term outlook, and cave into the growth momentum of rival LTE.
The NCC has set its sight on the 700MHz (currently being used by the military) and 2.6GHz (currently idle) frequency bands for 4G services. The technology neutral stance would give telecoms operators the freedom to select the suitable 4G technology, but BMI believes that LTE would be the overwhelmingly preferred option. Although WiMAX services launched in Taiwan in 2009, the NCC reported that there were only 128,748 subscribers at the end of September 2011, which is a considerably poor performance given that there are six WiMAX providers (five if a merger between Vee TIME and VMAX Telecom is completed). By comparison, Japans NTT DoCoMo had 390,000 LTE subscribers in September after launching services in December 2010.
Taiwan retained its sixth position in BMIs latest Risk/Reward Ratings (formerly Business Environment Ratings) for the Asia Pacifics telecoms industry. However, we see downside potential due to the islands economic outlook. Despite our expectations of a sharp slowdown in Taiwans economic activity, growth surprised to the downside, which was more than we anticipated. On a seasonally adjusted annualised basis, the economy contracted 1.1%. Expectations of further slowing in Chinas economy, coupled with a deterioration in Taiwans leading economic indicators, have led us to downgrade our growth forecasts for 2011 and 2012 to 3.6% and 3.4% respectively from 4.3% previously. Our estimates remain below the Bloomberg consensus of 4.9% and 5.0% in 2011 and 2012 respectively and the governments forecasts of 4.6% and 4.4%.
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