Chunghwa Telecom, Taiwan Mobile warned of violating fair trade laws as price war continues

Taiwan’s telecom giants continue offering low-cost 4G plans despite promises to end the price war

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A promotion for Chunghwa Telecom's 4G  LTE-WLAN aggregation (LWA) services (from Chunghwa Telecom)

A promotion for Chunghwa Telecom's 4G LTE-WLAN aggregation (LWA) services (from Chunghwa Telecom)

TAIPEI (Taiwan News) -- Fair Trade Commission (FTC) Chairwoman Huang Mei-ying (黃美瑛) warned Chunghwa Telecom (中華電信) and Taiwan Mobile Co. (台灣大哥大) that they both may be in violation of fair trade laws if they collude to withdraw from the low-cost 4G mobile market.

Both companies had promised to phase out their least expensive 4G plans at the end of February but instead extended the promotions. If the companies agree, as media rumors have suggested, to exit from the low-cost plans simultaneously, they would be in violation of fair trade laws and may face penalties.

Huang said that the continued low-cost promotional activities between the two telecom giants would lead to unsustainable low-cost competition, according to a UDN report. She added, “They must be very careful” not to violate fair trade laws when finally ending the price war, and she believes the companies are aware of the consequences.

Chunghwa Telecom, Taiwan’s largest telecom, extended its flat-rate subscription plan for the second time at the end of February, forcing its peers to extend with their own competitive plans and continue a price war.

The company said its NT$699 (US$22.66) plan for unlimited 4G data usage would be available until March 15. It also extended the availability of its low-cost 4G subscription plan, which charges a minimum monthly fee of NT$777 for unlimited internet during the first year, by two months.

Local peers argued that flat-rate plans are cutting into profits as they called for an end the price war.

The top three telecoms in Taiwan launched flat-rate 4G plans three years ago but have been unable to phase out the plans due to competition.

At the end of February, Far EasTone Telecommunications, the nation’s third-largest telecom, announced a continuation of its cheapest 4G plan, which it had planned to eliminate on Feb. 22.