Taiwan's 4G Providers to be Subsidized for 19 Smart City Projects

The Ministry of Economic Affairs (MOEA) has approved subsidies to Taiwan’s 4G telecom service providers for their smart city projects.

Chunghwa Telecom Co., Ltd., Taiwan Mobile Corp., FarEastone Telecom Co., Ltd., and Asia Pacific Telecom Co., Ltd. will be subsidized to undertake the 19 projects they have submitted, with Chunghwa alone having proposed nine projects.

These projects involve providing broadband services based on digital technologies including the Internet.

Coined by International Business Machines (IBM) Corp., the term “smart city (also smarter city)” generally defines the concept of using digital technologies or information and communication technologies to enhance quality and performance of urban services, to reduce costs and resource consumption, and to engage more effectively and actively with its citizens.

The MOEA has budgeted NT$5.18 billion (US$167.12 million) for the subsidies over a three-year span, with the sum being part of the NT$15 billion (US$483.87 million) the Taiwan Cabinet has set aside from the NT$118.65 billion (US$3.82 billion) it had collected from the telecom providers to bid for 4G-service licenses.

The subsidy makes up half of the needed capital required by each project, which anticipates inspiring matching investment of at least NT$10 billion (US$322.58 million) in smart city projects to create at least two million paying customers in three years.

Chunghwa’s projects call for the telecom to so far have signed agreements with 15 local governments including Taipei City and New Taipei City to set up smart transportation service, in-car telematics and online entertainment service, dynamic traffic control service, smart life service and smart tour service in these cities.

Taiwan Mobile has signed an agreement to provide smart services as tourist attraction guide, live broadcasting of art and cultural activities, interactive multimedia learning, and live broadcasting of activities at shopping districts in Kaohsunng City in southern Taiwan.

FarEastone will work with Tainan Government in southern Taiwan to provide 20-plus smart applications, including smart bus service, smart traffic information inspection, and smart tourism and cultural service.

Industry executives point out that rolling out smart city services suggest the island’s 4G service providers are shifting their focus to promote value in service from popularly-priced services. They feel the crucial battleground market to be smart transportation, smart government, and smart entertainment services.

Industry executives project the number of the island’s 4G-service subscribers will surge past 10 million by the end of this year to account for around 43.5 percent of the island’s total population of around 23 million, versus the current number of around 6.5 million, with the number to increase to about half of the island’s population next year.

They say that now is opportune for Taiwan’s telecom-service providers to promote value-added 4G services as the network covers at least 95 percent of the island.

Market consultancy Frost & Sullivan forecasts the smart city market to reach US$1.57 trillion by 2020 in consideration of the 1,000-plus cities worldwide engaged in smart-city programs.