December 30, 2021 – Taiwan's telecommunications sector is about to enter a new era. Taiwan Mobile Co., Ltd. (Taiwan Mobile) announced today (Dec. 30) that it has officially completed the signing of a merger agreement with Taiwan Star Telecom Corp. Ltd. (T Star). Taiwan Mobile anticipates issuing 282 million new shares in the stock-for-stock merger with T Star and forming a new 5G “Team Taiwan.” As the surviving company in the merger, Taiwan Mobile will emerge with a 100MHz block of the 3.5GHz band, the most medium frequency bandwidth capacity in the industry. It will also have 11,000 3.5GHz 5G base stations that will provide high quality 5G service to 90% of the population and cover 95% of Taiwan’s communication traffic.
After Taiwan Mobile and T Star held their own board meetings today, Taiwan Mobile Chairman Daniel M. Tsai and T Star Chairman Frank Lin signed the merger agreement on behalf of their companies, setting a new milestone for Taiwan’s telecom sector at a critical time for 5G development. Mr. Tsai said Taiwan Mobile’s biggest goals in working toward this merger were to better integrate the 5G spectrum, make the deployment of base infrastructure for mobile communications more efficient, and take another step toward a low-carbon, sustainable future, while also creating a new order within the industry.
“This merger will deliver more than the sum of its parts and be good for consumers. It will also enable Taiwan Mobile and all of its partners to focus on transcending the imaginations and expectations of consumers on what the technologies of the future will look like,” Tsai said.
Following the signing of the agreement, the two companies will apply for approval with the National Communications Commission (NCC) and the Fair Trade Commission (FTC) as required by law and then set a merger reference date once approval is obtained. Taiwan Mobile President Jamie Lin said the merger will have a positive impact on the customers, employees, shareholders, business partners and other stakeholders of both companies and will encourage the healthy development of the industry. Given those advantages, he hoped the deal will quickly receive the support and approval of the NCC and FTC so that the merger can be finalized and a new chapter in Taiwan’s 5G history can begin.
Saving Precious Energy for Taiwan
The power consumption of 5G base stations transmitting in the 3.5GHz band is three times that of 4G base stations, and before the launch of 5G, Taiwan Mobile argued that Taiwan did not need four or five 5G networks, especially given the increasingly tight supply of electricity and the heavy footprints of power generation and climate change on the environment. Once this merger is completed, a 3G network and thousands of redundant 4G base stations will be eliminated, and those changes along with Taiwan Mobile’s smart, energy-saving systems will save 40 million kilowatt-hours in power consumption annually. Over the longer term, after T Star’s 5G network is taken out of service, annual power savings will reach 100 million to 200 million kWh, a substantial contribution to the mitigation of local electricity shortages and climate change.
Industrial Transformation
Integrating the two companies’ 60MHz and 40MHz blocks on the 3.5GHz spectrum will also provide a major impetus for accelerating 5G vertical applications and industrial transformation. Taiwan Mobile believes that private enterprise networks require dedicated bandwidths to prevent interference from public networks. Up to now, however, Taiwan has yet to announce when a dedicated frequency would be made available, and because the 4.8-4.9GHz spectrum planned for vertical applications is not part of the first wave of mainstream spectrums established worldwide, its costs, equipment, and end device development are not yet conducive to vertical development. Once our 5G “Team Taiwan” takes shape, Taiwan Mobile plans to address the demand for vertical fields, such as for smart factories, by immediately adapting T Star’s 40 MHz block on the 3.5GHz spectrum to provide dedicated network services for enterprises. Though the services will continue to use the infrastructure already in place, they will not be interfered with by public networks and will be highly cost effective. This approach should expedite the upgrading of Taiwan’s 5G services, and make them more competitive internationally.
Complementary Networks
Another benefit will come from the complementary nature of T Star’s 900MHz and 2600 MHz spectrums and the 700MHz, 1800MHz, 2100MHz, 3.5GHz and 28GHz spectrums held by Taiwan Mobile. In the future, the merged network will enable 5G NR CA with a carrier aggregation up to 7CA while meeting 5G demand for low-frequency penetration, medium-frequency capacity and super-fast high-frequency bands, capabilities that will accelerate the development of next-generation fields such as the metaverse, Web 3, and AIoT.
In terms of users’ rights, the merger will bring together 9.8 million users and form a large-scale economic entity that offers more efficient investment in basic infrastructure and a greatly improved customer experience. Customers of both companies will be able to take advantage of call discounts within a much bigger network, and T Star customers will benefit from a 1.5-fold increase in 4G coverage and 3-fold increase in 5G coverage without a change in rates. They will also gain access to a much larger retail network, meaning greater convenience and more attentive service.
With the signing of the merger
agreement, the management teams of the two companies will begin work on an
employee placement plan. At the same time, the base of nearly 10 million
customers created by the merger promises to help Taiwan Mobile maximize the
impact of exclusive sales promotions, such as the “Double Play” and momobile
plans, and the Disney+ service, and tie-ins with affiliates momo and TWM
Broadband will further capitalize on the larger customer base. These
initiatives, founded on the spirit of Taiwan Mobile’s “Open Possible” brand
vision, will deliver results that reward all of our stakeholders. .