Taiwan Mobile announced that it has officially completed the signing of a merger agreement with rival operator Taiwan Star Telecom, the former said in a release.
Taiwan Mobile, which ended 2021 with 7.3 million subscribers, noted it plans to issue 282 million new shares for the stock-for-stock merger. The operators’ boards approved the deal on December 30.
Following the merger process, Taiwan Mobile will emerge with a 100MHz block of spectrum in the 3.5GHz band. It will also have 11,000 3.5GHz 5G base stations that will provide 5G service to 90% of the population and cover 95% of Taiwan’s communication traffic.
Taiwan Star has spectrum in the 900MHz, 2.6GHz and 3.5GHz bands, while Taiwan Mobile’s holdings include frequencies in the 700MHz, 1.8GHz, 2.1GHz, 3.5GHz and 28GHz bands.
“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,” Taiwan Mobile chairman Daniel 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 Star ended 2021 with 2.5 million subscribers, while market leader Chunghwa Telecom closed the year with 9.7 million users, while Far EasTone had about 7 million mobile customers.
“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,” the telco said in a statement.
“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.”
The telco noted that once the merger is fully completed, Taiwan Mobile plans to address the demand for vertical fields, such as for smart factories, by immediately adapting Taiwan Star’s 40 MHz block on the 3.5GHz spectrum to provide dedicated network services for enterprises.