Taiwan: 4G Auction Coming as Operator Capex Peaks with FTTH and LTE Investments

Product Synopsis
Although Taiwan is one of the less populous Asia-Pacific markets, it still ranks seventh in total service revenue for the region. The upgrade to a faster data service infrastructure, in the form of a nationwide rollout of fiber networks and the launch of LTE, will propel the market toward a value of $13.6bn in 2018. The migration to high-speed connectivity will result in Taiwan being a capex hotbed in both wireline and wireless communications in the coming years.

Introduction and Landscape
The Taiwanese telecom market generated $12.5bn in service revenue in 2012, a 3.0% increase over the previous year. Mobile data was the most important driver behind this trend, generating $390m more revenue in 2012 than in 2011. Thanks to the widespread adoption of smartphones, coupled with smartphone users generating ARPU of $48, mobile data revenue grew by 23.5% in 2012. Most mobile data traffic is over GSM networks at present, with LTE networks to begin service in 2014. Going forward, we expect mobile data to lead the top-line growth of Taiwan's telecom market, which will grow at a 12.9% CAGR to $4.2bn. We foresee Taiwan's FTTH/B household penetration rising from 12.5% to 60.8% over our forecast period to bring in $1.5bn in 2018. We expect another data-based service, VoIP, to undergo the most explosive growth at a 16.8% CAGR. While cable TV operators engage in consolidation as saturation approaches, IPTV will lead pay-TV to grow at a 2.7% CAGR, comfortably outpacing the overall telecom market's 1.4%.

Executive Summary
Market and Competitor Overview
Taiwan in a regional context
Economic, demographic and political context
Regulatory environment
Demand profile
Service evolution
Competitive landscape
Major market players
Segment analysis
Mobile services
Fixed services
Pay-TV
Identifying Opportunities