Taiwan's incumbent operator, Chunghwa Telecom Co. Ltd. (NYSE: CHT), plans to spend 130 billion New Taiwan Dollars (US$4 billion) upgrading its undersea, access, and mobile networks during the next five years.

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Chunghwa suffered a loss of service in late December following an earthquake that severed primary and backup sub-sea cables. (See Earthquake Cuts Cables Near Taiwan and Chunghwa Assesses Quake.) Now it needs to repair those links while it works with a consortium of Tier 1 Chinese carriers, KT Corp. , and Verizon Communications Inc. (NYSE: VZ) to build a new transpacific undersea cable. (See Carriers to Connect China With $500M Cable.)

But the company isn't just splashing out on international connectivity. It's also investing in 3G mobile infrastructure and plans to replace part of its copper access network with fiber, a move the carrier signaled earlier this year when it announced its intention to migrate to an all-IP network. (See Chunghwa Plans $4B NGN.)

It has earmarked NT$60 billion ($1.84 billion), to be spent during the next five years, for an FTTH and FTTB (fiber-to-the-building) network that will initially connect about 25 percent of Taiwan's 7.4 million residences and offices. That's an even bigger outlay than expected -- local reports earlier in the year pegged the FTTH capital expenditure at NT$50 billion ($1.54 billion).

The network will enable access speeds of up to 100 Mbit/s for the delivery of services such as IPTV, video on demand (VOD), and Karaoke on demand (KOD -- the best telecom acronym ever), which Chunghwa has been singing about for some time. (See Intellon Links to Chunghwa, Alcatel, Acer to Deploy IP TV in Taiwan, and Chunghwa Expands IPTV Deal With Orca.)

As a result, Chunghwa's annual capex budget will rise this year to NT$30 billion from NT$24 billion in 2006.

Chunghwa is already rolling out such services over its existing access infrastructure using ADSL2+ gear from the likes of Alcatel-Lucent (NYSE: ALU) and ECI Telecom Ltd. . (See Chunghwa Picks Alcatel's ADSL2+ and ECI Makes Hay in Taiwan, Europe.)

Chunghwa has also deployed EPON-based FTTB equipment, based on chipsets from Teknovus Inc. , that currently connects about 150,000 customers. (See Teknovus Goes Turbo.)

The carrier has provided less information about its 3G plans, where Nokia Corp. (NYSE: NOK) is the incumbent supplier, though it is working closely with Nortel Networks Ltd. on developing alternative wireless broadband capabilities using WiMax. (See Nokia Wins 3G Expansion Deal and Chunghwa Uses Nortel WiMax.)

Chunghwa could not be reached for further information.

— Ray Le Maistre, International News Editor, Light Reading