TAIPEI: Bids in Taiwan’s auction of fifth-generation networking airwaves have exceeded NT$100bil (US$3.3bil), a sign of robust demand as carriers race to deploy new wireless networks for applications including smart manufacturing and autonomous cars.
Chunghwa Telecom Co, Far EasTone Telecommunications Co, Taiwan Mobile Co and two other rivals are bidding for preliminary licences to the spectrum they need to operate their future 5G networks. Bidding continued yesterday after the total on Monday surpassed NT$100bil, 98% of which was for rights to use the 3.5GHz band.
The rising costs for licences shows carriers expect the faster networks –due later this year in Taiwan – will provide a market advantage over competitors.
The auction results so far are “blowing away expectations, ” New Street Research analysts said in a note dated Jan 6.
“There is no sign that the bidding will end soon, ” Sheih Chi-mau, chairman and chief executive officer of the island’s biggest carrier Chunghwa Telecom, said on Monday in remarks at a company event. “It may take a few more days. The competition is fierce.”
While some other sales of 5G spectrum in similar bands have drawn bigger totals, Taiwan’s is the richest relative to population, according to New Street.
The Taiwanese bids set a new bar of US$0.51 per megahertz pop – an industry term that takes into account both the bandwidth and population that the carrier is paying for – which New Street Research analyst Vivek Stalam says is 10 US cents above the previous high reached during Italy’s mid-band spectrum sale in 2018.
An airwaves sale in Italy last year drew US$7.6bil, the most after Germany’s US$7.4bil sale. Taiwan’s population of 24 million is less than half of Italy’s 60 million and Germany’s 83 million.
The final spectrum fee total in Taiwan is expected to reach NT$114.9 bil, Credit Suisse analysts wrote in a Jan 2 note.
That amount would fall slightly shy of the NT$118.7bil Taiwan raised from its 4G auction in 2013. — Bloomberg
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