PHS Provider FITEL in Taiwan Announces Bankruptcy on Dec. 26

FITEL, Taiwan’s only provider of personal-handy-phone service (PHS), has racked up debts of around NT$5 billion (US$161.29 million) due to being less  competitive relative to the popular third-generation (3G) and fourth-generation (4G) mobile services.

Founded in 1997 and having begun PHS service in 2001, FITEL is widely used in hospitals for emitting lower radiation and being cheaper, hence once registering some 1.5 million subscribers.

However, PHS' small coverage and low speed can't compete against  3G and 4G services, which transmit on broader bandwidths for wider coverage, hence the subscriber volume's decline to around 680,000, including 68,000 active users.

FITEL at one time attracted considerable subscribers with free life-time monthly rate, but had been struggling with low average revenue-per-user, with its financial woes having worsened in 2007 when it paid 12.89% of sales revenue for the WiMAX (Worldwide Interoperability for Microwave Access) license, after which it applied to a court for restructuring.

Other telecoms in Taiwan, after the court ruling, had been planning to take over FITEL's subscribers, prompting industry executives to think that the misfortune of the PHS provider would not impact  its customers and the local telecom market.

FITEL's WiMAX license will expire in 2016 and be pulled by the National Communication Commission. 

(KL)