Foxconn's Taiwan LTE gambit

Caroline Gabriel/Wireless Watch
10 Jul 2013

Giant Taiwanese contract manufacturer Foxconn has been looking for ways to diversify its business and reduce its reliance on making Apple devices. Its latest move is to bid for spectrum in Taiwan‘s upcoming 4G auction.

Seven companies will take part, according to the National Communications Commission (NCC). These include the four established cellcos - Chunghwa Telecom, Taiwan Mobile, Far EasTone and Asia Pacific Telecom – plus Foxconn/Hon Hai subsidiary Ambit Microsystems; and two new mobile units set up respectively by the Ting Hsin International Group and the Shinkong Group. Ambit makes wireless routers.

The NCC will now go through a screening process and the auction should get under way in early September. The regulator has already announced reserve prices for the frequencies in the 700-MHz, 900-MHz and 1.8-GHz bands, and should it sell all the spectrum just at those prices, it would raise TW$35.9 billion ($1.2 billion). It is expected that the four cellcos, plus one new entrant, will gain licences.

In the 700-MHz band, the most expensive, four lots of spectrum will be offered, three of 20 MHz and one 30 MHz. In 900-MHz there will be three lots of 20MHz each and in 1.8-GHz, three 20 MHz chunks of spectrum, and two 30 MHz, will be on sale.

Some of the spectrum in the two GSM bands is currently being used for 2G or 3G and there will be lower base prices for these, as the licences do not expire until 2018.

If Foxconn wins spectrum, it could launch mobile services to support its plans to develop own-branded devices and accessories. In theory it could emulate the practice of some Japanese consumer electronics suppliers to offer mobile gadgets with integrated wireless plans in order to establish itself as more than a contract manufacturer.

It has already formed an alliance with Mozilla to cooperate on devices running Firefox Mobile, which could give Foxconn the chance to create an own-branded range.

The Taiwanese firm is said to be recruiting about 3,000 software staff to help support the platform, making a bet on Firefox that could give it a new level of control and influence in the device ecosystem.

That, in turn, could set a new pattern in the market – rather like that in home equipment like set-top boxes – where the Taiwanese ecosystem and the software platforms collaborate directly, reducing the power of the big brand OEMs.

Foxconn is now understood to be working on at least five device prototypes running Firefox, which could be sold under its own brand or those of operators or vendors. The new software staff would have expertise in HTML5, cloud computing and OSs, said Foxconn last week.

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