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International Communications ForumInternational Communications ForumInternational Communications ForumInternational Communications ForumInternational Communications Forum

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Contents

I. Foreword....................................................................................... 3

II. Agenda ........................................................................................ 4

III. An Overview of communications developments in

Sweden, Australia, and Taiwan.................................................... 5

III.1 The development of the Sweden communications

industry........................................................................................... 5

III.2 The development of the Australian communications

industry............................................................................................ 8

III.3 The development of the Taiwan’s communications

industry........................................................................................... 13

IV. Speakers............................................................................................ 18

Mr. Göran Marby............................................................................ 18

Mr. Richard Bean............................................................................ 19

Dr. Hsiao-Cheng Yu ........................................................................ 20


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I. ForewordMoving into the ninth year since our establishment, the NCC is able to build on past accomplishments to usher in the future of communications. By making appropriate adjustments to the regulatory framework, not only do we endeavor to promote healthy competition within the broadcasting and telecom sectors of Taiwan, we also encourage cross-sector investments between them. Such efforts highlight the tendency toward convergence that new technology brings. This point is underscored further by the current issue of 4G and a whole new regulatory regime for convergence. Spectrum for 4G services was successfully conducted in the fall of 2013 in line with our objectives of ensuring technological neutrality, healthy competition, and the best use of spectrum.

The NCC fully acknowledges the need and is committed to still further liberalization of the regulatory framework. This could hardly be achieved without the extremely valuable insight and cooperation of our international peers. In that light, it is a great honor and a privilege for me to welcome Director-General Göran Marby, from the Swedish Post and Telecom Authority (PTS), and Deputy Chair Richard Bean, from the Australian Communications and Media Authority (ACMA) to Taiwan to celebrate the 8th anniversary of NCC and to join the accompanying 2014 International Communications Forum with us.

By observing the regulatory experiences and expertise of our honored guests, we can feel confident that all participants will benefit and be inspired to develop the most effective policies for the modern era of communications to meet the customers' need.

Howard. S. H. Shyr Chairman of the National Communications Commission


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II. Agenda2014 NCC ‘s 8th anniversary celebrations—International Communications Forum

Organized by: National Communications CommissionDate: Friday, Feb. 21st, 2014.Venue: 3F International Conference Hall, MOTC International Convention Center

13:30～14:00

14:00～14:05

14:05～14:45

14:45～15:25

15:25～15:45

15:45～16:15

16:15～16:45

16:45～16:50

Registration

Opening RemarksDr. Howard S.H. Shyr, Chairman, NCC

Keynote Speech:Mr. Göran Marby, Director-General, PTS• The Swedish experience and future regulatory challenges• The telecom sector in Europe and challenges on the EU level• Global challenges - Shift in paradigms in the telecom sector, both regarding business models and technology.

Keynote SpeechMr. Richard Bean, Deputy Chair, ACMA• Practical convergence: Lessons learned and conversations to come

Coffee Break

Keynote SpeechDr. Hsiao Cheng Yu, Vice Chairman, NCC• Convergence in Taiwan: Now and Future

Panel Discussion & QAModerator: Dr. Hsiao Cheng Yu, Vice Chairman, NCC

Closing RemarksDr. Howard S.H. Shyr, Chairman, NCC

III. An Overview of communications developments in Sweden, Australia, and Taiwan

III.1 The development of the Sweden communications industry

According to the ITU 2012 IDI publication, Sweden is ranked second globally in ICT technology development (South Korea, Sweden, Iceland, Denmark, and Finland). The people of Sweden show high capabilities in communications and benefit from the highest broadband penetration rate in Europe.

Internet access has been continuously growing and the capacities to access online services have turned out to be a very important part of end-users’ lives. The total number of subscriptions that adopted 4G (LTE) network has grown dramatically by 873 percent by the end of July of 2013. Until June 30 of 2013, there were 811,000 subscriptions, and it indicated a huge increase of 728,000 compared with the same period one year earlier, according to the Swedish Telecommunications Market First Half-year 2013 of the PTS

TeliaSonera Tele2 Telenor Hi3G Com Hem OtherThe Swedish Telecommunications Market First Half-year 2013

(Source: PTS)


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4G AuctionAlong with as the telecom equipment supplier Ericsson, TeliaSonera, the largest Nordic telecom service provider being founded in 1853, has been the driving force behind ICT development in Sweden. TeliaSonera provides a variety of telecommunication services under the consumer brands Telia and Halebop, and thus can be compared to Chung Hwa Telecom in Taiwan. It has invested substantially in broadband infrastructure deployment, including 4G expansion, providing access to the whole Nordic region, as well as other areas, including Russia, Spain, Turkey, and even as far as Nepal. Tele2, another major telecommunications operator with its headquarters in Sweden, has more than 300 million subscribers from 11 countries worldwide. Tele2 obtained a license for 2 x 10MHZ of the 800MHz spectrum at the 2012 Nederland auction for the provision of 4G services.

Planning for the release of spectrum has been undertaken by The Swedish Post and Telecom Agency (PTS), which, since 2008, has been releasing bandwidth for the LTE network, adopting TDD and FDD in the 2.6GHz and 800MHz bands, through a series of auctions. The auction for wireless services in the 2500–2690MHz (2.6 GHz) and the 1900–1905MHz bands began on January 1, 2008. In Feb. 2011, an auction for 800 MHz took place, ending after 5 days and 31 rounds. Another auction, this time for 2 x 35MHz of spectrum in the 1800MHz band began in October 2011 with licenses being valid for 25 years from 2013. Both TeliaSonera and Net4Mobility, which is a joint venture of Tele2 and Sweden, acquired 2 x 35MHz of spectrum in the 1800 MHz band, which is being used to strengthen their respective LTE and mobile networks.

During the first half of 2013, total income from the consumer market for mobile voice and data services was just over SEK 14

billion, showing an increase of over 3% when compared with the first half of 2012. Although voice services remained the primary source of income (59%), in line with other highly developed countries, income from mobile data services was steadily increasing (28%).

Although SMS messages decreased 8%, the number of MMS messages jumped 22%. Outgoing voice calls from mobile networks also increased by 4% to 12.6 billion minutes during this time, while calls from fixed networks fell 17%, which equated to the total number of outgoing traffic minutes decreasing by almost 5%.

Turning to fiber broadband, subscriptions stood at 1.1 million, an increase of 16 per cent, or 150,000 subscriptions year on year. Demand for high-speed broadband continued to grow: 840,000 broadband subscribers enjoyed access speeds of 100 Mbit/s or more, 27% of all fixed broadband subscriptions. Since the first half of 2012, the number of mobile broadband subscriptions with download speeds of 30 Mbit/s or more has increased by more than 2 million to 2.7 million. This development is bound up with the strong growth of 4G subscriptions during the period. IPTV via fiber, a platform for traditional TV services, also continued to show steady growth, but has slowed slightly when compared to earlier periods.


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III.2 The development of the Australian communications industry

As of June 2013, the number of mobile subscriptions in Australia had reached 31.09 million and continued to grow steadily with mobile penetration reaching more than 130%. At the same time, Australia had 19.65 million mobile handset internet subscribers and 6.1 million mobile broadband internet subscribers. Across all access technologies, Australian internet subscribers increased 13 per cent to 32.0 million internet subscribers. In line with other advanced nations, fixed-line telephony has been gradually declining as the demand for mobile broadband services grew exponentially as more users took to smart phone, which in turn consequently drove dramatic growth in mobile data traffic on networks. As of June 2013, the number of fixed-line telephone services in operation had declined one percent to 10.32 million services compared to 10.44 million services at June 2012. In contrast, the number of smartphone users at May 2013 had increased to 11.19 million users, a 29 per cent increase since May 2012.

Mobile Internet Subscribers in Australia(Source: ACMA Communications report 2012-13)

The Australian telecom market is served by the three major operators: Telstra, Optus, and Vodafone, along with a number of other smaller providers. The total revenue for 2013 stood at approximately USD42.5 billion, down slightly from 2012. This was seen as a result of lower revenue from Vodafone and Optus, and continuing economic uncertainty among some sectors of society that have lowered spending.

Carrier Share of Mobile Services in Operation, June 2013(Source: ACMA Communications report 2012-13)

Global ICT Developments 2000-2010(Source: IT World Telecommunication ICT Indicators, ITU)


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Although it has seen its market share decline from 80% in the early 2000s, Telstra still dominated the Australian telecom market today with a share of just under 60% according to 2011 figures. Similar to Chunghwa Telecom in Taiwan, Telstra, the former government provider of telecommunications services in Australia was a fully privatized company, which provided a wide range of telecommunications services. Figures for 2011-2012 showed it enjoyed a 46% market share of mobile subscriptions in Australia.

As the main competitor to Telstra, Optus also provides a wide range of telecommunications services. Its market share has remained mostly unchanged in recent years at between 20-22%.

In 2009, Vodafone Hutchison Australia (VHA) was formed through the merger of Vodafone and Hutchison. Both the merger and some subsequent network issues have eroded its market share to around 10% though it does account for 23% of carrier mobile subscriptions.

Australian Main Mobile Carriers

Carrier Population coverage(aggregate) Frequencies and networks

Telstra 99%

1800MHz(4G LTE)850MHz(NextG 3G)2100Mhz(3G)900MHz and 1800MHz(2G)

Optus 97%2100MHz(national 3G)900MHz(national 3G and 2G)1800MHz(metro 2G and 4G selected markets)

VHA 94%

2100MHz(urban 3G)900MHz(regional 3G)850MHz(new 3G data network)900MHz and 1800MHz (2G)

(Source: IBIS, World 2012 industry figures)

After years of steady growth, the market is expected to slow down in 2014 and 2015, with forecasts predicting growth of 1-1.5% annually. The primary reason is that most consumers of fixed-line and mobile services will not tolerate price increases, so opportunities to increase consumer and business expenditure in the short term are limited to mobile data services based on 4G/Long-term Evolution (LTE) technologies.

4G AuctionIn May 2013, the Australian Communications and Media Authority (ACMA) announced the results of the auction for the 700MHz and 2.5GHz spectrum bands in Australia, which had began in May the previous year. Telstra, Optus and TPG Internet gained most spectrums. According to the announcement, the bid of Telstra amounted to far more than AUD1.3 billion for 40MHz of 700MHz spectrum and 80MHz in the 2.5GHz band. Optus acquired half as much spectrum in each band for the sum of AUD649 million, while TPG Internet, the new entrant and also a internet service provider, bid more than AUD13 million for 20MHz of 2.5GHz spectrum. VHA was absent from the auction after it withdrew before it began, claiming it would rely on the existing 1800MHz airwaves to provide 4G services instead of acquiring new spectrum for the same purpose. As a result of the VHA’s absence, some 30MHz of the 700MHz spectrum remained unsold.


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Digital Dividend Auction Results in Australia Unit: AUD

(Source: ACMA 2012-13 annual report)

ACMA announced that licenses for the 700MHz band are to be valid from January 1st 2015 while those for the 2.5GHz band will commence from October 1st 2014 (except for Metro Perth and the Regional Western Australia region, which will kick off on February 1st 2016); all licenses will be valid for 15 years.

III.3 The development of the Taiwan’s communications industry

During the fourth quarter of 2013, the number of mobile phone subscribers reached 29.82 million (127.6 subscribers per 100 residents), 0.2 million more than the previous quarter. The number of subscribers in the same quarter of 2012 was 29.59 million (126.9 subscribers per 100 residents), which indicates a growth of 0.24 million subscribers year on year. It was also noted that during the fourth quarter of 2013, the number of both 2G and PHS mobile phone subscribers declined to 4.21 million and 0.72 million respectively, while 3G subscribers soared to 24.77 million, which accounted for 83% of the total mobile phone subscribers. In the same quarter of the previous year, there were 22.68 million, which accounted for 77% of the total mobile phone subscribers.

Among the mobile phone subscribers of the fourth quarter of 2013, 63% of them included mobile data service functionality; namely, 18.77 million mobile phone subscribers in Taiwan are able to access the Internet. Among those mobile phone subscribers with Internet access, 3G subscribers accounted for 95.8% (17.98 million). Among the 17.98 million 3G subscribers with data service, 68.5% had accessed the Internet service during the last month. The percentage showed steady growth and reached a record high. In addition, the number of 3G subscribers who had accessed Internet service during the most recent month plus the subscribers of PWLAN and WiMAX equaled 13.81 million, 0.86 million more than the previous quarter. In addition to WiMAX, 4G is the latest trend in LTE technology worldwide. As an independent regulator, to inspire digital convergence, the NCC already launched the 4G auction by the second half of 2013.

BidderSpectrum secured

Total price700 MHz band* 2.5 GHz band*

Optus Mobile 2×10 MHz(20 MHz in total)

2×20 MHz(40 MHz in total)

$649,134,167

Telstra 2×20 MHz(40 MHz in total)

2×40 MHz(80 MHz in total) $1,302,019,234

TPG Internet Nil 2×10 MHz(20 MHz in total) $13,500,000

Total spectrum sold

2×30 MHz(60 MHz in total)

2×70 MHz(140 MHz in total) $1,964,653,401*

Total spectrumunsold

2×15 MHz(30 MHz in total) Nil N/A


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4G AuctionFully recognizing the importance of 4G, Taiwan accelerated the procedure of issuing 4G licenses and completed 4G mobile spectrum auction by October 30th 2013. The spectrum has been auctioned with the objective of promoting fair competition in mobile markets and maximizing spectrum use. 4G mobile broadband licenses shall be released adhering to the principle of technological neutrality. The auction has achieved NCC’s purpose of promoting higher competition in the 4G mobile market. We expect that the consumers will benefit from better services and faster mobile broadband speeds.

More specifically, a total of 270MHz of frequency spectrum, in the 700MHz, 900MHz and 1,800MHz bands, was auctioned for mobile broadband service use. After 393 rounds of bidding over 40 days, Ambit Microsystems Corp, Asia Pacific Telecom Co., Ltd., Chunghwa Telecom Co., Ltd., Far Eastone Telecommunications(FET) Co., Ltd., Taiwan Mobile Co., Ltd., Taiwan Star Cellular Co., Ltd., have all won spectrum. The auction has raised a total of TWD118.65billion, more than twice (231%) exceeding the reserve price (TWD35.9 billion). In particular, the bidding price was TWD30.52 billion for 700MHz, TWD9.345 billion for 900MHz, and TWD78.785 billion for 1800MHz, respectively.


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(Source: NCC)

(Source: NCC)

Digital Dividend Auction Results in TaiwanUnit: TWD in billion

Winning Bidders Frequency Block Total Price

Ambit Microsystems Corp

A3(2×10 MHz)Uplink 723~733MHzDownlink778~788MHz

B3(2×10 MHz)Uplink905~915MHzDownlink 950~960MHz

9.18

Asia PacificTelecom Co., Ltd

A1(2×10 MHz)Uplink 703~713MHzDownlink 758~768MHz

6.415

Chunghwa Telecom Co., Ltd.

B2(2×10 MHz)Uplink 895~905MHzDownlink 940~950MHz

C2(2×10 MHz)Uplink 1725~1735MHzDownlink1820~1830MHz


39.075

Far EastoneTelecommunications(FET) Co., Ltd.

A2(2×10 MHz)Uplink713~723MHzDownlink 768~778MHz



31.315

Taiwan Mobile Co., Ltd.

A4(2×15 MHz)Uplink 733~748MHzDownlink 788~803MHz


29.01

One companybacked by TingHsinInternationalGroup

B1(2×10 MHz)Uplink 885~895MHzDownlink 930~940MHz

3.655

118.65(Source: NCC)


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IV. Speakers

Mr. Göran MarbyDirector-General of Post and Telecom Authority (PTS)

Appointed by the Swedish Government, Göran Marby is the Director-General of the Swedish Post and Telecom Authority (PTS) since January 1, 2010. Mr. Marby chairs the Body of European Regulators for Electronic Communications (BEREC) during 2014.

PTS is the governmental authority that regulates the electronic communications and postal sectors. The concept 'electronic communications' includes telecommunications, IT and radio.

Mr. Marby has more than 20 years of working experience in the IT Sector. Prior to his current position he co-founded AppGate Network Security AB where he served as CEO between 2002 and 2009. He has held several executive positions within the IT sector: CEO Cygate, Country Manager Cisco Sweden, CEO Unisource Sweden. Göran Marby holds an MSc in Finance from University of Gothenburg, School of Business, Economics and Law.

Mr. Richard BeanACMA Deputy Chair

Richard Bean was appointed Deputy Chair of the ACMA in 2010 for a five year term.

During his career Richard has worked in a variety of roles in Australia’s media and communications industries. Before joining the ACMA he oversaw the legal, regulatory affairs and human resources functions at wireless broadband infrastructure owner and ISP Unwired. He had previously held positions responsible for the legal and business affairs side of Australian commercial free to air television network Network Ten's programming activities, and practised as a commercial, media and litigation lawyer at national commercial law firm Blake Dawson Waldron (now Ashurst).

As Deputy Chair, he takes a particular interest in the ACMA’s cyber safety and security activities, and is the Authority’s spokesman for those matters.

Richard holds an honours degree in Literature and Philosophy from the University of Sydney and a law degree from the University of New South Wales.


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Dr. Hsiao-Cheng Yu NCC Vice Chairman

Dr. Hsiao-Cheng Yu was appointed Vice Chairman of the National Communications Commission since August 2012 for a four year term. Dr. Yu received his Ph.D. degree in Industrial & Systems Eng. at Georgia Institute of Technology, Atlanta Georgia in 1981. He has served as a Member of Technical Staff at AT&T Bell-Labs from 1985 to 1992 and has acquired three patents related to Bi-directional Video Telephony Using Shared Channels on Coaxial Cable Network.

Before joining NCC, Dr. Yu was a professor in the Institute of Technology Management, Chiao-Tung University, Hsinchu Taiwan from 1992 to 2012. Being a professor in the management school, Dr. Yu believes in de-regulation and liberalization.

MEMO


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MEMO MEMO


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