Taiwan WiMAX operators consider joint procurement plans

Pooling of interests could reduce capital equipment expenditures for WiMAX base stations.

Six Taiwan service providers with WiMAX licenses are mulling joint equipment procurement in a bid to minimize costs, says a report in the Taiwan Economic News.  A decision is expected to be announced next month.

The providers - Far EasTone Telecommunications (FET), First International Telecom Corp., Global Mobile Corp., Tatung InforComm, Vastart Cable TV Network Co., Ltd.  and VMAX Telecom - hold 2.5 GHz spectrum licenses in either the north or south regions of the country.  A majority of the providers support the concept of improved bargaining power and volume pricing from equipment vendors.  One operator executive commented that a WiMAX base station would cost around US$62,500.  The collective group of providers estimate need for 15,000 WiMAX base stations, which would cost an estimated US$937 million.  The group thinks that price can be cut in half if they purchase as a single entity. 

Agreement on common vendors and interoperability between different base station manufacturers equipment could be a stumbling block to realizing the vision.  Service providers have to overcome interoperability problems that may exist with the systems already installed, noted an executive from VMAX Telecom.  First International Telecom already purchased initial base station radios from Motorola, leaving the company to not gain as much from new arrangements that lower costs for first-time buyers. 

In April, four of the six WiMAX operators formed a consortium to accelerate deployment and operational services.  Far EasTone Telecommunications (FET) and WiMAX Telecom were the two missing when the Consortium of Mobile Broadband (CMB) kicked off.

By Jeff Orr, ORR Technology, LLC

Tuesday, September 30, 2008 in Business  | Permalink |  Comments (0)