Taiwan's 4G auction has commenced on schedule this week, and analysts are expecting high sale prices due to the presence of three new market entrants.
The auction for spectrum in the 700-MHz, 900-MHz, and 1,800-MHz LTE bands commenced on Tuesday. Regulator NCC has predicted many rounds of bidding, expecting the auction to conclude in November.
Bank of America Merrill Lynch has projected that the auction will raise two to three times the NT$35.9 billion ($1.21 billion) base price, Focus Taiwanreported.
The investment banking firm expects prices to be in-line with Taiwan's 3G auctions in 2002. This would translate to an average cost per unit of between NT$4 billion and NT$10 billion depending on frequency, and a total auction value of NT$78 billion.
Due to the expected heavy competition, a Merrill Lynch analyst predicts that one or two of the seven bidders will pull out before the auction concludes.
The seven participants are 3G incumbents Chunghwa Telecom, Taiwan Mobile, Far EasTone and Asia Pacific Telecom, Hon Hai affiliate Ambit Microsystems and two new telecom companies set up by Taiwanese conglomerates Ting Hsin International Group and Shinkong Group.
Of the newcomers, Hon Hai has the best chance of succeeding with a 4G foray due to its experienced management and solid financials, Merrill Lynch believes.