TAIPEI: Taiwan Mobile, the island's No 2 telecoms operator, has talked to its mainland counterparts in the saturated sector about potential investment opportunities for the firm, a senior executive told Reuters yesterday.

Taiwan and the mainland companies have signed a series of business deals over past years, mainly opening the tourism and transportation sectors, with many investors keen on more agreements in the financial, tech and telecoms industries.

"We've held talks with the other two operators," said Rosie Yu, vice president for finance at Taiwan Mobile, referring to China Unicom and China Telecom, the mainland's second and third-largest mobile operators.

"More talks are needed because we still need to know each other better, and it'll not be limited to a stake sale, and will include talks on areas to see where we can cooperate further," she said during the Reuters China Investment Summit.

Taiwan Mobile's smaller rival Far EasTone had agreed to sell a 12 percent stake to China Mobile in April, but Taiwan regulations currently forbid mainland investors from holding stakes in the island's telecoms firms.

Yu said there still was no clear model on how future cooperation with any mainland telecom operator would work, and that was an issue the company was still trying to work out.

"It's not clear what shape such cooperation will take, so that's something we've both got to look at," she said. "Why would any business allow you to go into their market and allow you to compete with them?" Taiwan regulations currently allow overseas investors, excluding mainland companies, to hold up to 60 percent of a telecom's shares.

Revenue from mobile Internet plans, one of Taiwan Mobile and the sector's fastest-growing segments, should continue to climb by about 20 percent for the next two to three years as consumers take to surfing the Web on their smartphones and mobile devices.

"Taiwan has about 4.5 million notebook PC users, and less than 20 percent of those are using a wireless card," Yu said. "The number of 3G cellphone users is also in just the mid-teens, so there's a lot of upgrading that can come up soon." This growth would be in line with Taiwan Mobile's larger rival Chunghwa Telecom, whose chairman told Reuters in June he expects revenue from data plans to grow between 20-30 percent.

The research firm IDC said revenue from non-voice services grew by 30 percent in 2008, but it did not have a forecast for 2009.

Yu made her comments after the Taiwan stock exchange closed yesterday. Taiwan Mobile shares were about 1 percent lower, lagging a 0.29 percent advance on the benchmark TAIEX share index.

Reuters

(HK Edition 09/03/2009 page2)