During a recent trip to Taiwan, I happened to notice advertisements from telecom operators there offering unlimited 4G data packages for just around NT$499 (HK$130).
Telecom firms usually try to avoid very steep price cuts, as they fear such moves could bring about a domino effect and seriously hurt the bottom line.
However, price wars are not uncommon ahead of a major mobile technology upgrade. In fact, similarly aggressive marketing campaigns were witnessed when the industry transited from 3G to 4G.
When a technology becomes mature, carriers’ capacities have usually been developed to a high level. The facilities are there whether they are being used or not.
If they succeed in persuading customers to lock up for a long contract while getting ready for the next-generation technology, carriers would be in a good position to suggest clients to upgrade and migrate to the new service once it is launched.
The Taiwan market is apparently preparing for 5G era.
We’ve already seen Hong Kong telecom companies mulling over similar price cuts.
Although 4G services are very affordable, it’s likely that local operators would cut prices further in the run up to 5G launch.
That said, Hong Kong may not release spectrum for 5G services until 2019 for bidding by wireless telecom operators, according to the timetable set by the Communications Authority.
That means at the earliest, we have to at least wait for two more years for 5G to become available to the public.
This article appeared in the Hong Kong Economic Journal on May 21
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]