Chunghwa eyes mobile Internet
TELECOMS: The state-run company cancelled plans to build a costly CDMA mobile phone
system in order to focus on the budding domestic mobile Internet market
By Dan Nystedt
STAFF REPORTER
Chunghwa Telecom Ltd said it will cancel a planned code division multiple access (CDMA)
mobile phone project, and instead pour its resources into increasing its mobile Internet
capability.
After receiving permission from the Ministry of Transportation and Communications to cancel
the three-year, NT$50 billion (US$1.5 billion) project, Chunghwa officials said it would stop
taking bids from foreign companies.
Chunghwa had planned to build a CDMA mobile phone system in Taiwan, a project derided
by a number of experts for its high cost and relatively low consumer demand for the
technology.
First to be impacted by cancellation of the project were foreign companies seeking
government contracts to supply base stations and other equipment for the CDMA project.
US-based Motorola, South Korean mobile telecommunications giant Samsung and France'
Alcatel were top contenders for the multi-billion NT dollar project.
CDMA is the North American cellular phone standard, while Taiwan -- and 140 other nations
around the world -- use GSM technology. Both CDMA and GSM are mobile phone standards
only, not mobile Internet standards. Chunghwa already runs a GSM system in Taiwan.
Canceling the project will help Chunghwa muster resources for building its GPRS mobile
Internet system and prepare for bidding on a 3G license. GPRS (general packet radio
service), which is expected to run mobile Internet at rates of 36 kilobits per second is the
predecessor to 3G mobile Internet service which should run at speeds between 158kbps to
256kbps.
When Chunghwa originally decided to build the CDMA system, Chen Kwang-cheng, a
professor at National Taiwan University Graduate School of Telecommunications had already
labeled it "a bad business decision."
Chunghwa currently operates three different mobile phone systems. Installing the base
stations and operating a fourth system would make the company less competitive.
Taiwan Cellular Corp, a private company, operates only one GSM mobile phone system.
Chunghwa originally planned to replace an older analog mobile system (AMPS) with the
CDMA network. After canceling the CDMA project, however, the company said it would still
go ahead with phasing out the AMPS system in order to downsize operations. AMPS was the
first mobile phone system in Taiwan.
Although the 200,000 Chunghwa customers still using the antiquated system will be able to
keep their original phone numbers, they will have to purchase new mobile phones. Company
officials said that since AMPS customers have been Chunghwa's "oldest and most loyal
customers," the company would work out a plan to help offset the cost of handset
replacement.
One benefit the company plans to offer its AMPS customers will be the choice of transferring
to a regular GSM mobile phone network or to the new GPRS mobile Internet system at no
charge. GPRS provides both telephone and Internet service
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