Telco argues its case for retaining extra midband frequencies acquired in the Taiwan Star deal.

Robert Clark, Contributing Editor, Special to Light Reading

October 5, 2022

3 Min Read
Taiwan Mobile's new spectrum assets hold up 5G merger approval

One of Taiwan's big 5G consolidation deals is on hold as operators debate spectrum holdings.

Chunghwa Telecom and FarEasTone are calling on the other major operator, Taiwan Mobile, to surrender some of the midband spectrum it acquired in its merger with Taiwan Star.

If approved, Taiwan Mobile will have 60MHz in the sub-1GHz spectrum band, compared to Chunghwa Telecom's 40MHz and Far EasTone's 50MHz.

Figure 1: Taiwan Mobile argues its case for retaining extra midband frequencies acquired in the Taiwan Star deal. (Source: Vernon Raineil Cenzon on Unsplash) Taiwan Mobile argues its case for retaining extra midband frequencies acquired in the Taiwan Star deal.
(Source: Vernon Raineil Cenzon on Unsplash)

Taiwan Mobile announced the merger on December 30 last year, aiming to complete the transaction by the end of September.

But last week, instead of signing off on the deal, it was arguing it out against its competitors in a National Communications Commission (NCC) hearing.

The legal position seems quite clear. No operator is permitted to own more than a third of all spectrum available, according to the radio frequency management rules. With just 150MHz of spectrum in the 3.5GHz band issued, Taiwan Mobile's enlarged spectrum holdings would appear to be over the limit.

But the law also allows the NCC to declare exceptions in certain circumstances, such as efficient spectrum management, M&As or public interest.

As it happens, there is a recent precedent. Last November, Chunghwa Telecom acquired 10MHz in the 900MHz band from another small operator, Asia-Pacific Telecom, that exceeded the one-third limit.

But the NCC allowed Chunghwa to keep the new spectrum after it committed to investing in remote coverage and offering special packages to disadvantaged communities.

Smaller 5G holdings

Precedent aside, Taiwan Mobile gave two other reasons for retaining the additional frequencies.

One is that as a larger operator, with nearly 10 million customers, it needs the extra capacity – good luck with that one.

But it also said that its 5G spectrum holdings are much smaller than its rivals. That is true. It has a combined 300MHz of 3.5GHz and 28GHz frequencies, well below Chunghwa Telecom's 690MHz and FarEasTone's 880MHz.

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Despite this, and the precedent, the weight of opinion looks to be against Taiwan Mobile.

Cho Cheng-hong, head of the nonprofit Institute for Information Industry, who was appointed as arbiter to the case, was not convinced.

"I do not think that the merger would lead to unfair competition in the market, but I did not hear from the statements from both companies that there is a clear and major public interest involved that would warrant an exemption from the rules," he was reported as saying.

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— Robert Clark, contributing editor, special to Light Reading

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Asia

About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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