The government is once again considering Worldwide Interoperability for Microwave Access (WiMAX) deregulation and its possible future. The Executive Yuan called a meeting on June 15 2011 among the agencies involved in WiMAX development to review strategies to address the plight of WiMAX operators. Among the proposals, the Ministry of Economic Affairs recommended that operators be allowed to consolidate among themselves before they are required to achieve the deployment threshold of 70% population coverage. The Executive Yuan has instructed the National Communications Commission to conduct a comprehensive review of deregulating operating rules to help operators resolve the dilemma. As substantial investment in the development of the WiMAX industry has been made, the government hopes that it will not be in vain.
WiMAX operators have jointly proposed to the government that the commission:
- reduce the 70% population coverage threshold;
- allow nationwide operation instead of existing licence zones in the northern and southern regions respectively;
- reduce licensing fees to increase operating incentives; and
- adopt technical neutrality, which would allow operators to use Long-Term Evolution Time-Division Duplex (LTE-TDD), the latest innovation in telecommunications technology.
The commission has reservations about deregulating operating rules, as the requirements for WiMAX operators in terms of population coverage and licensing fees are much less stringent than those for 2G and 3G licence holders. It was commented that both the excessive granting of six licences and overoptimism about market development in the beginning have contributed to the current operation issues for WiMAX operators.
Under the existing operating rules, an operator may merge or acquire another operator only when the population coverage of its base stations reaches 70% within its service area in five years. However, thus far operators have achieved only around 20% coverage.
The Ministry of Economic Affairs suggested a system of deregulation which would allow operators to consolidate among themselves before being required to achieve the development threshold of 70% population coverage. The commission, however, expressed concern that this change to the operating rules could be contested by players that lost out in previous WiMAX licence auctions.
The operators hoped that a dual approach incorporating both WiMAX and LTE for the adoption of 4G communications technologies can be adopted on the grounds that LTE has built up a strong momentum and is more user friendly when it comes to global roaming. The government's response to this approach seemed unfavourable - especially when the commission highlighted that the current development of LTE has not yet proven successful in the European Union or the United States, while more efforts have been committed to the development of LTE-TDD in China. LTE should not be the sole solution to WiMAX operators' failure in business, according to a government official close to the source.
The government has so far refused to indicate whether it will abandon WiMAX and turn to LTE for the next generation of mobile networks.
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