Taiwan’s blowout 5G auction shows telecoms carriers willing to pay big

Bids in Taiwan’s auction of 5G mobile airwaves have exceeded NT$100 billion (US$3.3 billion), a sign of robust demand as telecommunications carriers race to deploy advanced wireless networks for applications including smart manufacturing and autonomous cars.

Chunghwa Telecom, Far EasTone Telecommunications, Taiwan Mobile Co and two other rivals are bidding for preliminary licences to the spectrum they need to operate their future 5G networks. Bidding continued on Tuesday after the total on Monday surpassed NT$100 billion, 98 per cent of which was for rights to use the 3.5-gigahertz band.

The rising costs for licences shows carriers expect the faster networks – due later this year in Taiwan – will provide a market advantage over competitors. The auction results so far are “blowing away expectations”, New Street Research analysts said in a note dated January 6.

“There is no sign that the bidding will end soon,” Sheih Chi-mau, chairman and chief executive of the island’s biggest carrier Chunghwa Telecom, said on Monday night in remarks at a company event. “It may take a few more days. The competition is fierce.”

While some other sales of 5G mobile spectrum in similar bands have drawn bigger totals, Taiwan’s is the richest relative to population, according to New Street.

The Taiwanese bids set a new bar of US$0.51 per megahertz pop – an industry term that takes into account both the bandwidth and population that the carrier is paying for – which New Street Research analyst Vivek Stalam said is US$0.10 above the previous high reached during Italy’s mid-band spectrum sale in 2018.

An airwaves sale in Italy last year drew US$7.6 billion, the most after Germany’s US$7.4 billion sale. Taiwan’s population of 24 million is less than half of Italy’s 60 million and Germany’s 83 million.