Telecommunications

As introduced by the Yearbook of the Republic of China:

To comply with WTO requirements, Taiwan has increasingly liberalized its telecommunications sector, established a mechanism for fair competition, and accelerated the development of its broadband network infrastructure.

Mobile phone, radio paging, trunking radio, and mobile data services were open to the private sector in 1997; followed by satellite communications in 1998; cable leasing and 1900MHz digital low-power cordless phone services in 1999; fixed networking and international submarine cable leased-circuit services in 2000; and international simple resale (ISR) and third-generation mobile telecommunications services in 2001. Local phone services are currently available via fixed networks throughout Taiwan. Chunghwa Telecom Co., Ltd. (CHT), which dominates Taiwan's telecommunications market, was joined by three private competitors in fixed networking in 2001.

These networks are all interconnected, facilitating dial-up connections to selected local phone service providers and a choice of long-distance and international phone service providers. Local and toll-free phone subscribers have been allowed to retain their original phone numbers even after they have switched to a new service provider. As of November 2002, local phone subscribers totaled 13.09 million, pushing the penetration rate up to 58.2 percent.

Since their liberalization at the end of 1997, mobile phone services have become more diverse, and the number of subscribers has increased. Taiwan's mobile phone penetration rate grew from 6.86 percent in 1997 to 111.33 percent in June 2003, thus becoming number one in the world within five and a half years.

CHT currently employs a fiber-in-the-loop technique to provide telecommunications services to some residential and commercial buildings, communities, and schools in remote areas, which together account for only 1 percent of its subscribers. Based on the success of this techniques, plans are underway to extend its use to government organizations, educational and medical institutions, commercial buildings, and industrial parks.

In compliance with the government's liberalization policies, local and long-distance leased-circuit cable services are being opened to public utility corporations employing cable transmission networks in order to increase competition, lower operating costs, and facilitate the establishment of faster networks by related service providers. The MOTC began accepting applications in June 1999 from electric power, mass transportation, petroleum, and cable radio and television systems, and by the end of 2002, had issued 27 licenses.

The following figure shows Taiwan's telecommunications penetration rates from 1996 to 2001:

As Taiwan's Internet penetration rate rose, e-commerce developed and demand for broadband networking expanded. Permits were issued to three companies for establishing international submarine cable leasing operations, expanding the international submarine cable traffic capacity, lowering related costs, and enhancing Taiwan's competitive edge in the global telecommunications market.

As of November 2002, Taiwan's active Internet users totaled 8.35 million, representing a 6.78 percent growth from December 2001 and an overall penetration rate of 37 percent. In June 2003, 39 percent of the total population was Internet users. The steady rise in these figures is attributed to the increased availability of broadband services. As of June 2003, the number of broadband users had reached 2.47 million, representing 28.18 percent of the total 8.76 million Internet users, and 35.4 percent of households already had broadband access to the Internet. This penetration rate pushed Taiwan to the second place in the world, after South Korea.

In contrast, as of September 2002, users of comparably slower traditional Internet services showed a decline, with leased-line, ISDN, and direct PC subscribers decreasing by 3 percent, 8 percent, and 19 percent, respectively, from June 2002. Dial-up subscribers, however, increased by one percent for that same time period.

The following figure shows Taiwan's internet peneration rates from 1998 to 2002: