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Big telecom contracts in Taiwan
August 15, 2002
International telecom-equipment heavyweights are competing for
lucrative contracts to supply 3G systems to three telecom service
providers in Taiwan. Nortel Networks, Siemens, Nokia and Telefon.
Ericsson submitted bids on Aug. 13 for the US$441.2 million contract
to supply 3G systems to Chunghwa Telecom.
On the same day, Taiwan Cellular issued the specifications of the
system it plans to buy. Far EasTone Telecom plans to announce its
contracts for 3G systems soon. Local industry specialists estimate
the contracts of the three Taiwanese telecom providers will have
a total value of around US$882.4 million.
Early this year, five of the island's cellular-service providers
were licensed to offer 3G service, including Chunghwa Telecom, Yuan-Ze
Telecom, Taiwan Cellular, Asia Pacific Broadband Wireless Communications
and Taiwan 3G Mobile. Asia Pacific is nearing an agreement to buy
US$109 million of equipment from Nortel. Samsung Electronics of
South Korea, which was outbid by Nortel for the Asia Pacific contract,
has submitted a counter-bid of only US$82.6 million. Chunghwa will
buy 800 transceiver base stations in the first phase of its 3G development
plan and 1,000 stations each in the second and third phases. Its
contract specifies that additional purchases after the three-phase
procurement should be made through price negotiations with the contract
winner to expedite purchasing procedures. The Chunghwa contract
requires systems to have a total capacity of at least one million
subscribers.
In a departure from past practice, Chunghwa will base its contract
decision not only on price. Suppliers' previous track record will
be weighted 15% in the assessment, specifications 55%, and price
30%. The system is designed to find a balance between price and
technological capability. Chunghwa plans to roll out 3G services
in October next year, leading many to predict that it will pick
a 3G system supplier by mid-November this year
Taiwan Cellular issued the specifications of the system it plans
to buy on the day Chunghwa began receiving bids. Taiwan Cellular
is expected to buy systems for one million phone lines at a cost
of around US$147.1 million to US$200 million. Far EasTone will issue
specification forms on August 26. The company is expected to buy
systems carrying one million lines totally for US$100 million to
US$200 million. Ericsson, local industry specialists estimate, is
the most likely winner of the contract. Taiwan Cellular and Far
EasTone plan to decide bid winners ahead of Chunghwa's decision.
Taiwan 3G Mobile is still choosing from among five bidders for its
3G contract.
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3G Motorola A920
