Taiwan Telecoms Industry Report – 2023-2030

Description

WHY YOU SHOULD BUY THE TAIWAN INDUSTRY TELECOMS REPORT:

• Benefit from the latest market opportunities
• Understand the threats to your operations and investments and protect your company against future risks
• Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market
• Get a full view of the competitive landscape to assess your market position.
• Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
• Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
• Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles

The Taiwan Telecommunications Industry Report, 2023-2030 includes a comprehensive review of the Taiwanese market dynamics, market sizing, market forecasts, analysis, insights and key trends.

EXECUTIVE SUMMARY

Taiwan Telecoms Industry Report at a Glance

Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. Idem Est Research expects the Taiwanese telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to macroeconomic and inflationary pressure.

With already a saturated mobile phone penetration and fixed broadband take-up among households, future growth is likely to remain subdued with a declining working population and an aging population over the long term.

The Taiwanese telecoms market is set to see a wave of consolidation in 2023. By the end of the year, the number of mobile operators could decline from five to three, which is considered a reasonable number for market competition globally. Two of the three major players are set to acquire two smaller companies. Taiwan Mobile is set to merge with Taiwan Star, and FET will take over Asia Pacific Telecom, a smaller operator. Both deals are expected to conclude by late 2023, reflecting a trend of consolidation by private players that we have witnessed in other Asian markets such as Malaysia, Thailand and Indonesia.

Further market consolidation is likely to occur over the forecast period as many telecom players confront the task of creating returns in a growing and capital-intensive industry and are therefore considering ways to grow industry revenues and profitability.

Idem Est Research forecasts that mobile subscriptions will continue to grow in the 2023-30 period and fixed broadband subscribers will also continue to grow but lower its household penetration over the same period due to fixed-wireless substitution. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2015, sliding down every year since then.

Following the market contraction over the last 5 years, Idem Est Research forecasts flat revenue growth to 2030, as long as data pricing stays rational amid the mergers from five to three mobile operators due in 2023.

Mobile subscriptions ares growing faster than mobile service revenue leading to ARPU decline after 3 years of intense competition with the market transitioned completely transitioned to 4G after shutting down 2G and 3G networks in 2017 and 2019 respectively.

Idem Est Research expects the overall telecoms market to remain flat through to 2025 after a marked decline from 2016 due to mobile service revenue pressure partially offset by fixed broadband and enterprise data growth.

Capex Investments
The Capex to GDP ratio peaked in 2014 and has been sliding since, to its lowest in 2019 and rising again in 2020. Capex investments will increase again  from 2023 through to 2030, as mobile operators invest in 5G, bolster their 4G coverage and increase capacity to fulfil strong data demand, increasing again Capex to Sales Ratio.

Operator Profiles
Most operators maintained EBITDA margins at the expense of revenue growth with Chunghwa losing the most share while Far EasTone and Taiwan Mobile also losing mobile service revenue share in the 2016-2022 period at the expense of Asia Pacific Telecom and Taiwan Star.

Mobile Subscribers and Revenue
As the rate of growth of net additions in mobile subscriptions slows, telecommunications providers are channelling their efforts into reducing their cost base and stabilising ARPU through new value-added services using mobile data and bundling fixed and mobile services. The proportion of postpaid subscriptions remained stable at about 81% between 2016 and 2022 while the postpaid segment is growing in popularity with SIM-only offerings and reducing the number of people holding multiples SIMs.

According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. Taiwan mobile users pay for competitively priced data as mobile users recorded the largest monthly download in the Asia Pacific region.

Broadband Subscribers – FTTH Push and Fixed Wireless

The fixed broadband market is experiencing a subdued growth with Chunghwa Telecom losing share to HFC cable operators such as KBro, Taiwan Mobile, TBC and CNS. Chunghwa Telecom invested early in the 2010s in FTTx technologies while migrating its DSL subscribers to its HiNet network. Competing cable operators also invested in upgrading their cable networks bundling mobile, IPTV and e-Commerce services but falling short of upgrading to full-fibre networks limiting opportunities for gigabit speeds.

Fixed broadband penetration is forecasted to decline as fixed-wireless substitution is increasing supporting a rising number of lone-occupancy households.

Thematics – Telecoms Infrastructure / 5G / M&A / Infrastructure

Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

However, in the medium term, the telco sector is likely to experience some corporate activity. Subdued growth due to ARPU pressure compounded by low population growth is pushing telcos to look for outside opportunities to increase scale. Idem Est Research expects a wave of consolidation in Taiwan in both the mobile and fixed broadband market, after some failed merger of cable operators.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

KEY COMPANIES MENTIONED IN THIS TAIWAN TELECOMS INDUSTRY REPORT:
Asia Pacific Telecom (APT), China Network Systems (CNS), Chunghwa Telecom, Far EasTone, Kbro, National Communications Commission (NCC), Taiwan Mobile, Taiwan Broadband Communications (TBC), Taiwan Star (T Star)

Taiwan Telecoms Industry Report – Table of Contents

1       Key Statistics
1.1        Taiwan Population
1.2        Taiwan’s Economy
1.3        Taiwan’s GDP

2       Overall Telecommunications Market, 2016–2030
2.1        Market Overview
2.2        Taiwan’s Race to Lead in 5G and Beyond
2.3        Historical Telecommunications Market Revenue, 2016-2022
2.4        Overall Telecommunications Market Forecast, 2022-2030
2.5        Telecommunications Market Capital Expenditure, 2016-2030
2.5.1      Historical Telecommunications Capex Spend, 2016-2026
2.5.2      Capex to Revenue Benchmark, 2016-2022
2.5.3      Capex to GDP Benchmark
2.5.4      Telecommunications Capex Spend Forecast, 2000-2030

3       Telecommunications Operators Profile
3.1        Chunghwa Telecom Profile
3.1.1      Chunghwa Telecom Revenue, EBITDA and Capex Mix
3.2        Far EasTone Profile
3.2.1      Far EasTone Revenue, EBITDA and Capex Mix
3.1        Taiwan Mobile Profile
3.1.1      Taiwan Mobile Revenue, EBITDA and Capex Mix
3.2        Asia Pacific Telecom Profile
3.2.1      Asia Pacific Telecom Revenue, EBITDA and Capex Mix
3.3        Other Operators Profile
3.3.1      Taiwan Star
3.3.2      KBro
3.3.3      China Network Systems (CNS)
3.3.4      Taiwan Broadband Communications (TBC)

4       Mobile Market
4.1        Mobile Subscribers Historical and Forecast, 2016-2030
4.1.1      Mobile Subscribers Historical, 2016-2022
4.1.2      Mobile Subscribers Market Share, 2016-2022
4.1.3      Taiwan Smartphone Share, 2022
4.1.4      Taiwan Mobile Subscribers Forecast, 2022-2030
4.1.5      Taiwan Mobile Subscribers by Generation Forecast, 2022-2030
4.2        Mobile Revenue Historical and Forecast, 2016-2030
4.2.1      Historical Taiwan Mobile Service Revenue, 2016-2022
4.2.1      Mobile Subscribers ARPU, 2016-2022
4.2.2      Mobile Service Revenue Forecast, 2022–2030
4.3        Spectrum Holdings
4.3.1      Spectrum Regulation
4.3.2      5G and Other Spectrum Auctions
4.3.3      Mobile Frequencies Portfolios Analysis
4.3.1      Spectrum Depth Benchmark by Country
4.4        Mobile Download Data and Pricing Trends
4.5        Mobile Speed Tests
4.5.1      Ookla Mobile Speed Tests
4.6        Internet of Things (IoT)

5       Broadband Market
5.1        Fixed Broadband Subscribers Historical, 2016-2022
5.2        Fixed Broadband Subscribers Forecast, 2022-2030

6       Fixed Telecommunications Infrastructure Investments
6.1        Fixed Digital Infrastructure
6.1.1      Government Plans and Policies
6.1.2      Submarine Cables

7       Mobile Tower Infrastructure Landscape
7.1        Taiwan Base Stations Market Analysis, 2022
7.2        Telco Infrastructure Comparative

8       Thematics / Opportunities
8.1        Consolidation Opportunities
8.2        Diversification Opportunities
8.2.1      e-Commerce
8.2.2      Digital Payments
8.3        New Telecoms Operating Model
8.3.1      The Attraction of Infrastructure Multiples
8.4        5G Developments
8.4.1      5G Overview
8.4.2      5G – Relative Capex Investments and Frequency Range
8.4.3      5G OpenRAN
8.4.4      Beyond 5G and Towards 6G

9       Telco M&A Transaction Database

10     Methodology

11     Copyright Notice

Taiwan Telecoms Industry Report – List of Figures

Figure 1 – Telco sector revenue as % of GDP in Taiwan
Figure 2 – Telecommunications Market Revenue, 2022
Figure 3 – Telecommunications Market EBITDA, 2022
Figure 4 – Telecommunications Revenue & EBITDA pool Share Estimates, 2022
Figure 5 – Total Telecoms Market Revenue and Growth Rate (TWD bn), 20229-2030
Figure 6 – Capex to Revenue Benchmark, 2016-2022
Figure 7 – Capex to GDP Ratio Benchmark, 2016-2022
Figure 8 – Telecommunications Capital Expenditure Spend, 2000-2030
Figure 9 – Chunghwa Telecom Service Revenue Mix, 2016-2022
Figure 10 – Chunghwa Telecom Historical Revenue Mix, 2016 – 2022 (TWD bn)
Figure 11 – Far EasTone Service Revenue Mix, 2016-2022
Figure 12 – Far EasTone Historical Revenue Mix, 2016 – 2022 (TWD bn)
Figure 13 – Taiwan Mobile Revenue Mix, 2016-2022
Figure 14 – Taiwan Mobile Historical Revenue Mix, 2016 – 2022 (TWD bn)
Figure 15 – Mobile Subscribers Share Comparison, 2016-2022
Figure 16 – Mobile Subscriber Share Comparison, 2016-2022
Figure 17 – Mobile Number Porting Total (m), 2013-2019
Figure 18 – Mobile Net Adds/Loss (000’s) Comparison, 2016-2022
Figure 19 – Mobile Subscribers Forecast, 2016-2030
Figure 20 – Mobile Subscribers by Technology (000’s), 2003-2030
Figure 21 – Mobile Subscribers ARPU (TWD), 2016-2030
Figure 22 – Mobile Service Revenue Forecast, 2022-2030
Figure 23 – Mobile Frequencies by Operators and by Band (MHz)
Figure 24 – Subscriptions per MHz of Spectrum, Asia-Pacific Countries, 2022
Figure 25 –Mobile Handsets Monthly Download Data (GB), 2017-2022
Figure 26 – Data Pricing Trends in Asia-Pacific (US$ per GB per month), 2017-2022
Figure 27 – Spectrum available for IoT in Taiwan
Figure 28 – Broadband Subscribers Share Comparison, 2016-2022
Figure 29 – Taiwan Broadband Net-Adds (000’s) by Operators, 2016-2022
Figure 30 – Broadband Subscribers Forecast, 2022-2030
Figure 31 – Taiwan Base Stations Market Share, 2022
Figure 32 – Telecoms Providers EV/EBITDA Ranges
Figure 33 – 5G Network Slices Structure
Figure 34 – Effect of Frequency on Range
Figure 35 – 5G Capacity and Coverage Layers
Figure 36 – Relative Capex Required for 5G Network Infrastructure Investment
Figure 37 – Telecom Infra Project – OpenRAN Vision

Taiwan Telecoms Industry Report – List of Tables

Table 1 – Taiwan – Key Statistics
Table 2 – Telecommunications Market Revenue by Operators, 2016-2022
Table 3 – Total Telecommunications Market Revenue, 2022-2030
Table 4 – Historical Telecommunications Capex Spend, 2016-2022
Table 5 – Total Telecommunications Capex Investments Forecast, 2022-2030
Table 6 – Historical Chunghwa Telecom Revenue, EBITDA and Capex, 2016-2022
Table 7 – Historical Far EasTone Revenue, EBITDA and Capex Mix, 2016-22
Table 8 – Historical Taiwan Mobile Corporation Revenue and EBITDA Mix, 2016-2022
Table 9 – Historical APT Revenue, EBITDA & Capex Mix, 2016-2022
Table 10 – Historical Mobile Subscribers, 2016-2022
Table 11 – Taiwan Mobile Subscribers Forecast, 2022-2030
Table 12 – Australia Mobile Subscribers by Generation (4G & 5G) Forecast, 2022-2030
Table 13 – Historical Mobile Service Revenue, 2016-2022
Table 14 – Historical Monthly Mobile ARPU, 2016-2022
Table 15 – 5G Auction Results, 2020
Table 16 – Spectrum Holdings by Operators and by Bands (MHz)
Table 17 – Historical Broadband Subscribers, 2016-2022
Table 18 – Historical Broadband Monthly ARPU, 2016-2022
Table 19 – Taiwan Broadband Subscribers Forecast, 2022-2030
Table 20 – International Submarine Cable Systems with Landing Stations in Taiwan
Table 21 – Chunghwa Telecom, Far EasTone, Taiwan Mobile, T Star, Asia Pacific Telecom, Telco Infrastructure Landscape
Table 22 – Technology Specifications (ADSL, FTTN, Fibre, 4G/LTE, 4G/LTE-A and 5G)
Table 23 – Telco Transaction Database, 2006-2022

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