Taiwan says Hon Hai among six winners of 4G licenses

Reuters News
Posted: Oct 30, 2013 1:48 AM

TAIPEI (Reuters) - Taiwan's National Communications Commission (NCC) said on Wednesday six companies would pay T$118.65 billion ($4.03 billion), more than triple the original offer price, for 12 domestic fourth-generation (4G) mobile spectrum licenses as the bidders try to seize market share in the high-margin business.

The world's largest electronics assembler, Hon Hai Precision Industry, won two licenses as it seeks diversify beyond its traditional contract manufacturing business.

Other winners included Chunghwa Telecom Co Ltd, Taiwan Mobile Co Ltd, Far Eastone Telecommunications Co Ltd, Asia Pacific Telecom Co, and a company backed by Ting Hsin International Group.

Taiwan's offer of 4G licenses comes late in Asia and behind Japan, South Korea, Hong Kong, Singapore, and the Philippines.

The total bidding price was 231 percent higher than the total original offer price. NCC chairman Howard Shyr told a press conference that bids from non-operators helped drive up prices.

Hon Hai is paying T$9.18 billion for two licenses in the lower 700MHz and 900MHz bands at a premium of 48 percent and 13 percent respectively.

"Winning the 4G licenses is a good way for Hon Hai to diversify its business as the profit margin is much better than its current businesses," said Aaron Chen, a fund manager at Capital Securities Investment Trust in Taipei. "Ultimately, whether or not it will succeed depends on if it can expand into the Chinese market and other overseas markets."

The NCC is releasing a total of 270MHz of frequency spectrum in the 700MHz, 900MHz and 1800MHz bands for 4G service.

(Reporting by Clare Jim; Additional reporting by Faith Hung; Editing by Jeremy Laurence)