Conference on Smart City, IoT, and Telecom Market Competition

Trans-editor: Yating Chan

Date: March 25, 2016

Venue: Innovation Incubation Center, National Chengchi University

Taiwan Communications Society (TCS) on Mar. 25 hosted the Conference on Smart City, IoT, and Telecom Market Competition at the Research and Innovation-Incubation Center, National Chengchi University. In the opening remarks,  TCS president Yu-li Liu said, while aiming to expand 4G network and user base to achieve better content and value-added services after the 4G auction in 2015, Taiwan's telecom operators also need to turn their attention to IoT as smart home and smart city is gradually transforming the landscape of our life. The conference, she added, served as a platform for the academy, industry, and government to exchange ideas and opinions on telecommunication policies and development in a hope to stimulate more related studies in the field.

In the speech of honor, Minister without Portfolio Chung Char-dir said that as the idea of IoT and its technologies have been much advanced over the past 6 years, the real challenge is how to expand its network infrastructure and application services. In the face of the digital convergence era, he added, loosening regulations will encourage telecom operators to make the most use of spectrum resources and engage in cross-industry investments, further stimulating a positive market competition.

In the first session on smart city and IoT, the Session Chair Yi-Bing Lin, deputy minister of the Ministry of Science & Technology, said that in addition to hardware infrastructure, developing viable and sustainable IoT application services is also important in forming a smart city and a robust creative and innovation industry. Another key principle, he added, is to involve people by providing user-friendly technologies and appealing application services. 

Jang-Hwa Leu, deputy director general of Industrial Development Bureau of Ministry of Economic Affairs, said that in the wave of IoT, local governments have been putting much effort in building smart networks for the implementation of a localized smart city. Further, he added, to compete for a spot in the Intelligent Community Forum's annual smart city lists, different goals based on each city's strength and advantage have been laid out with citizens' need at the forefront. 

Hen-Zhuang Wu, Convener of the Taiwan Smart City Solutions Alliance and President of ASUS Cloud, said that a smart city framework aims to respond to a city's need from the citizens' end by providing profitable data to satisfy people's want and create business revenue, and that service operation will be the key of a smart city's sustainability.

Faced with challenges of fast urbanization and ageing population, technology seems to be the only way out for the overcrowded city ecosystem. Jenn-Hawn Tarng, professor of the Dept. of Electrical and Computer Engineering of National Chiao Tung University, said that an important meaning of smart city is the quantization and digitization of real-life events in which network systems will automatically analyze data and then release feedback. However, he added, IoT development is also faced with many challenges that await the industry and the government to tackle hand in hand, such as uncertain business model, information sharing and safety issues (e.g. concerning individual privacy), and a lack of standardized transducer interface. 

After observation from officials and scholars in the first session, four presenters from Taiwan's telecom operators shared their experience in the second session on smart city and IoT. The Session Chair Po-li Liu, Director of Research Division IV of Taiwan Institute of Economic Research, pointed out that the government's role and function in IoT development is yet unclear, and hoped that operators' feedback will assist the government in mapping out future policies.

Rong-Syh Lin, Vice Chief President of Chunghwa Telecom, said that the company's core business lies in network infrastructure and it has aimed to assist local governments in building smart cities by offering cross-disciplinary services. Lin believed that big data analyses and applications are the driving force of a smart city's transformation and evolution, and that to generate the greatest value of data will need experts from different fields to work hand in hand.

As Chunghwa Telecom's representative talked about IoT and smart city development from a meta-perspective, Vice Chief President of Taiwan Mobile Daphne Lee said that mobile payment plan is a service of great potential as Taiwan's mobile phone account holders have surpassed its total population. And telecom operators' role is to set up an application management platform to assist business owners to enter the smart shopping arena with a relatively low cost.  

Andy Kuo, sales vice president of Far Eas Tone, said that linking the digital world to the physical world can make people's life much better. Take IoT for example, connecting sensors are core components, and software that is compatible to the sensors will be the development focus in the near future, he added. 

Kevin You, vice chief president of Asia Pacific Telecom, said that thanks to its economy of scale, IoT will generate a huge business opportunity while also having a tremendous impact on the current industry. However, he added, there is still much room for improvement as only roughly 1% of data has been effectively used.

The third and fourth sessions in the afternoon focused on issues related to spectrum refarming and competition in telecom market and on issues related to spectrum fees and policies by inviting scholars and experts to share their views on the best practices and solutions. 

In the third session on spectrum refarming and competition in telecom market, NCC Commissioner Bo-Zong Weng said that the government's attitude and policies on spectrum refarming will hugely affect both users' rights and the telecom market environment after 3G licenses expired at the end of 2018.

Kung-Chung Liu, researcher of Institutum Iurisprudentiae of Academia Sinica, said that Taiwan can learn from EU's spectrum policies, such as releasing spectrum without causing much user inconvenience and maintaining service neutrality and spectrum efficiency, to stimulate innovation and competition in the market.

Ting-Jun Wang, division head of Department of Posts and Telecommunication at Ministry of Transportation and Communications, said as 3G users still occupy a major portion in the market, current regulations will harm users’ rights as operators won’t be able to extend or renew their 3G licenses upon the expiry on Dec. 31, 2018.

Taiwan Star Telecommunications President Cliff Lai said that there have been too many spectrum auctions with record-high bids over the past few years, which is likely to refrain local bidders (operators) from pouring in more fund into infrastructure development.

Hsueh-Ching Lu, Emeritus Professor of National Chiao Tung University, said with the emergence and integration of cloud, software-defined networking, and network function virtualization, smart city and smart life will hugely change the current telecom market. In the face of such trend, he added, the best move for a telecom operator is to redefine and transform its enterprise culture.

Po-li Liu, Director of Research Division IV of Taiwan Institute of Economic Research, said that the development of fixed internet in the past had greatly relied on the infrastructure of voice services while the growing value of current broadband internet has derived from IP expansion and its advantage in competition. If looking into IoT development, he added, it is recommended that the government set down clear rules for a comprehensive spectrum reafarming scheme and allow all players in the market to roll out innovative and groundbreaking application services.

In the fourth session on spectrum fees and policies, Session Chair Bonnie Peng, professor of Yuan Ze University, said that though solutions to current challenges facing telecom industry might not come out with ease, she hoped that the academy, industry, and government can continue the discussion via TCS's platform and gradually reach a consensus on issues related to telecom market and policies.

NCC Commissioner Shin-yi Peng said that Taiwan's spectrum fees formulas have been overly simplified. In particular, for spectrum assigned by auction, the design of usage fees need to be in line with the spirit of Charges and Fees Act, namely, to charge fees on the basis of recovering management costs, and in accordance with user-pays principle, equal compensation principle, and cost recovery principle. 

Chorng-Jian Liu, Professor in the Department of Economics at National Taipei University, said that current spectrum fees regulations do not stipulate that collected fees go into an appropriation account for spectrum use and management, which he believed should be reviewed and adjusted to reflect spectrum's real economic value in market. 

Yuntsai Chou, Professor in the Department of Information Management of Yuan Ze University, said that the total 3G and 4G spectrum fees that Taiwan's five telecom operators pay to the government during their 17-year license period will accumulate to 114.3 billion NT dollars, which is about 60% of the spectrums' original auction fees and the percentage is evidently much higher than other countries' 15%-35% while also against the principle of administrative cost.

Shih-Chou Huang, associate professor of Department of Public Finance and Tax Administration of National Taipei University of Business, observed that Taiwan's telecom license fees should be a business tax of certain business entities that is managed in a fund appropriation account specifically for spectrum use and management. However, the current license fees reflect the feature of a general tax revenue, and he believed that a more flexible levy system together with license fees can be a promising direction for future policy-making. 

Li-Chiu Liu, Spokesperson of the Taiwan Telecommunications Industry Development Association, said that Taiwan's telecom operators' spectrum holding cost will continue to increase with the mobile market remained pretty much the same scale of 220 billion NT dollars since 2006, which compared to other countries will otherwise result in higher phone rates and lower quality services for local users.