In sea transportation, Kaohsiung ranked the world's sixth-largest container port in 2005, while Keelung was among the top forty. Free trade zones have been established in these two ports as well as Taichung Port 臺中港 and Taipei Port 臺北港 so as to enhance international competitiveness.

In air transportation, 49 airlines provided international flight services to and from Taiwan, transporting 44.27 million passengers and handling 1.82 million metric tons of cargo in 2005.

In telecommunications, the number of mobile phone subscribers in Taiwan reached 22.17 million (including 2G, PHS, and 3G) in 2005, with a penetration rate of 97.37 percent. Broadband subscribers exceeded 4.6 million, and the target of 6 million broadband subscribers is expected to be reached ahead of the 2008 schedule.

This chapter introduces the nation's transportation infrastructure, covering land, sea, and air facilities, as well as telecommunications.

Railways

Taiwan's modern railway system provides frequent and convenient passenger services between all the island's major cities and, indeed, many of its smaller towns too. There are four types of passenger train services: Zihciang 自強號 trains belong to the fastest express class and stop only at major stations; Jyuguang 莒光號 trains, the next fastest class, stop at more stations; Fusing 復興號 trains stop at every station on designated routes; and local commuter trains serve mostly shorter routes, stopping at every station, and generally yielding to higher-priority trains.

The Taiwan Railway Administration (TRA) 臺灣鐵路管理局 has undertaken numerous major construction and business renovation projects in recent years. These include adding a twin track to the mountain line between Jhunan 竹南 and Fongyuan 豐原, and electrification of the Kaohsiung-Pingtung line. Certain projects are carried out on a continual basis, such as track structural maintenance, beautification along rail routes, and improvement of train safety facilities.

In business overhauls, the TRA adjusted the pricing structure, upgraded ticketing and information services, and improved facilities. The TRA has also invested heavily in upgrading services, such as in its purchase of 810 Zihciang train passenger cars, which are now all in service.

To support the government's target of doubling the number of tourists visiting Taiwan, the TRA has implemented programs to encourage tourism by train. One such program, a round-the-island package tour on the premium-class sightseeing train Star of Formosa 寶島之星, began on October 30, 2004, and includes first-class services and facilities and stays at five-star hotels. The TRA also operates regional train tours, such as the East Coast Tourist Express and West Coast Tourist Express.

To reduce noise pollution, eliminate traffic jams, improve environmental quality, and integrate the Taipei Rapid Transit Systems (TRTS) 臺北都會區大眾捷運系統 and the High Speed Rail Project, the Taipei Railway Underground Project (TRUP) 臺北市區鐵路地下化工程計畫 is being carried out in four stages.

The first, second, and third stages of the TRUP—connecting Wanhua 萬華 with Huashan 華山 (including Taipei Railway Station), Huashan with Songshan 松山, and Wanhua with Banciao 板橋 respectively—are already operational. The fourth stage, which began construction in November 1998 and is scheduled for completion by 2009, will extend the line from Songshan to Nangang 南港.

Plans to put the railway underground in Kaohsiung City were completed in November 1999. Construction is currently proceeding on the R11 Station for its mass rapid transit (MRT) red line, while the TRA Zuoying 左營 Station was completed in July 2005.

Plans are also underway to transform sections of the Taiwan mainline railway into MRT-type operations. These projects include the lines between Kaohsiung and Pingtung, Hsinchu 新竹 and Neiwan 內灣, and Tainan and Shalun 沙崙, and the Eastern Railway Line 東部鐵路.

High-speed Rail

The Taiwan high-speed rail (HSR) system, the first major infrastructure project to be constructed under the Build-Operate-Transfer (BOT) model, will help reduce travel time from Taipei to Kaohsiung from 4 hours and 30 minutes by existing Zihciang trains to just 90 minutes.

The planned 345 km HSR route will traverse the western corridor of the island and cover ten stations: Taipei, Taoyuan 桃園, Hsinchu, Miaoli 苗栗, Taichung 臺中, Changhua 彰化, Yunlin 雲林, Chiayi 嘉義, Tainan, and Zuoying.

The Taiwan High Speed Rail Corporation (THSRC) 臺灣高速鐵路股份有限公司 signed the Taiwan HSR construction, operation, and development contract with the Ministry of Transportation and Communications (MOTC) 交通部 in July 1998. This officially granted construction and operation concessions of the project to the THSRC for 35 years.

Ports and Shipping

Maritime transportation is vital to Taiwan's trade-oriented economy. At the end of 2005, Taiwan's shipping fleet included 270 vessels with a weight of 100 gross tons or more each, and had a combined weight of 3.38 million gross tons (5.48 million deadweight tons, DWT).

In 2005, Taiwan had 149 shipping carriers, among which Evergreen Marine Corporation (EMC) 長榮海運股份有限公司, Yang Ming Marine Transport Corp. 陽明海運股份有限公司, and Wan Hai Lines Ltd. 萬海航運股份有限公司 provided container transportation services, while U-Ming Marine Transport Corporation 裕民航運股份有限公司 offered bulk transportation services.

Several measures have been adopted to improve the shipping environment and raise Taiwan's international competitiveness. Plans are underway to facilitate cross-strait shipping; relevant shipping laws and regulations have been undergoing review; ship owners are encouraged to register their newly purchased vessels as national-flag carriers so as to expand the national shipping fleet; budgets are being allocated each year for professional maritime training to enhance local seafarers' expertise; and organizational reforms are being carried out to streamline and increase administrative efficiency.

To keep pace with global trends of liberalization and internationalization, attract foreign investment, and raise Taiwan's international competitiveness, the port authorities have developed Free Trade Zones (FTZs) 自由貿易港區 at the island's four international ports: Kaohsiung, Keelung, Taichung, and Taipei.

Security measures have been promoted continually in response to the International Ship and Port Facilities Security (ISPS) Code and to amendments to the International Convention for the Safety of Life at Sea (SOLAS) adopted by the International Maritime Organization. Review and certification of domestic ships' security plans were completed in June 2004, and all Port Facility Security Assessment (PFSA) and Port Facility Security Plan (PFSP) work was completed in May 2004.

Taiwan has seven international ports: Keelung, Suao 蘇澳, Taipei, Taichung, Hualien 花蓮, Anping 安平, and Kaohsiung. Of these, both Suao and Taipei serve as auxiliary ports to Keelung, as Anping does to Kaohsiung.

Kaohsiung Port

Kaohsiung Port handled nearly 9.47 million TEUs (twenty-foot equivalent units) in 2005, making it the sixth-largest container port in the world.

This port features 118 operating berths, totaling 26.6 km in length, which can accommodate up to 153 ships (including mooring buoys) at any one time. It has five container terminals, 26 container wharves, 67 gantry cranes, two grain silos, and 293.5 hectares of container yards.

A sixth container terminal is currently being constructed to meet future demand and is scheduled to be completed in 2010. Its quay will be around 1.5 km long and cover 74.8 hectares.

Kaohsiung Port container terminals provide prompt, accurate, and comprehensive logistical services, with a container handling capacity of up to ten million TEUs annually. Its strategic location makes it an ideal choice for a marine transportation hub in East Asia.

To enhance the port's competitiveness, the Kaohsiung Harbor Bureau (KHB) 高雄港務局 set up an FTZ, which went into operation in January 2005. The FTZ encompasses all of the port's five container terminals and has a total area of 397.69 hectares.

Keelung Port

Located near the northern tip of Taiwan, Keelung Port has 57 berths. Its two container terminals, one each on its eastern and western banks, have 15 container berths equipped with 29 gantry cranes capable of handling 13-18 rows of containers at a time.

In 2005, Keelung Port handled over 2.09 million TEUs, making it among the top 40 container ports in the world. To meet the requirements of global shipping, two dredging programs were completed in January 2001, increasing the depth of the main channel to 15.5 m and enlarging the diameter of its turning basin to 650 m. Keelung Port can now accommodate vessels of 60,000 DWT. To promote operational efficiency and improve quality of service, stevedoring in Keelung Port was opened to private companies in January 1999.

The Keelung FTZ, which went into operation on October 1, 2004, comprises an area of 53 hectares from West Wharves No. 11 to 33 on the west bank, and an area of 14 hectares from East Wharves No. 6 to 22 on the east bank.

Taichung Port

Taichung Port is a man-made port covering a total area of about 3,760 hectares. Located on the west coast of central Taiwan, the harbor was designed to help cope with the fast growing needs of national economic development, and to relieve some of the shipping traffic from the heavily used Keelung and Kaohsiung ports.

Taichung Port's main channel is 16 m deep and its turning basin is 14 m deep at low tide. The port has 46 deep-water wharves and eight container piers. Since most of its equipment is automated, Taichung Port is very efficient.

In 2005, the harbor handled 1.23 million TEUs of cargo weighing 88.43 million metric tons. Taichung Port's FTZ began operation in October 2005; at 536 hectares, it is the country's largest.

Hualien Port

Located on Taiwan's east coast, Hualien Port is an artificial harbor formed by eastern and western breakwaters. It faces the Pacific Ocean to the east and is flanked by the island's Central Mountains 中央山脈 to the west.

The port has 25 berths capable of handling up to 34 million metric tons of cargo annually, and is fully equipped to meet most commercial shipping needs. In 2005, the port handled 21.95 million metric tons of cargo, a record high and an increase of 0.91 percent from the previous year.

In line with the government's policy objectives, the port will continue to develop its infrastructure to maintain its international competitiveness and promote tourist activities such as cruise lines and whale watching tours.

Auxiliary Ports

Taipei Port

Located on the south bank of the Danshuei River 淡水河 near Bali Township's Syuntang Village 訊塘村 in Taipei County, Taipei Port is being developed to serve as an auxiliary harbor relieving some of the heavy traffic using Keelung Port. The first of a three-phase construction has been completed, and the port is already equipped with two berths 9 m deep totaling 340 m in length, and a 70-hectare stacking yard. The second phase, due to be completed by 2014, includes construction of an outer breakwater 9,264 m in length (of which 7,074 m have already been completed) and seven container berths. The third phase involves construction of another 18 berths. Taipei Port's FTZ, covering 79 hectares in its initial phase, began operation in September 2005.

Suao Port

Suao Port also serves as an auxiliary harbor for Keelung Port. Located in Yilan County on Taiwan's northeast coast, the harbor covers about 2.9 sq. km and currently has 13 operating berths totaling 2,610 m in length. Measuring between 7.5 m and 15 m deep, these are capable of accommodating Post-Panamax vessels. A total of 654 vessels passed through Suao Port in 2005, carrying more than 6.52 million metric tons of goods, an increase of 7.37 percent over 2004.

Anping Port

Located in Tainan City, Anping Port serves as an auxiliary harbor to Kaohsiung Port. At present, it has a total of 2,567 m of wharves with 16 operating berths, and includes an 11.5 m deep channel that can accommodate ships of up to 20,000 DWT. In 2005, 905 vessels visited Anping Port, carrying more than 6.70 million metric tons of cargo, which represents an increase of 31.6 percent on 2004.

Airlines Providing Domestic Services

Far Eastern Air Transport 遠東航空公司 Mandarin Airlines 華信航空公司 TransAsia Airways 復興航空公司 UNI Airways 立榮航空公司 Daily Air Corporation 德安航空公司 Sunrise Airlines 中興航空公司

Civil Aviation

At the end of 2005, a total of 49 airlines, including code-share airlines, provided flight services to destinations in Taiwan. Of these airlines, 43 foreign carriers and 6 national airlines operated scheduled international air services to and from Taiwan. Six companies, including two helicopter operators, also offered domestic passenger flight services.

There are currently two international airports in Taiwan: Taiwan Taoyuan International Airport 臺灣桃園國際機場, formerly known as CKS International Airport 中正國際機場, in northern Taiwan and Kaohsiung International Airport 高雄國際航空站 in the south. In addition, there are 16 domestic airports in operation: Taipei, Hualien, Taitung 臺東, Taichung, Tainan, Chiayi, Pingtung, Magong 馬公, Cimei 七美, Orchid Island 蘭嶼, Green Island 綠島, Wangan 望安, Kinmen 金門, Hengchun 恆春, as well as Matsu Island's Beigan 北竿 and Nangan 南竿.

Taiwan Taoyuan International Airport has two terminals, the second of which opened in July 2000, providing an annual handling capacity of 20 million inbound/outbound and transit passengers. To shuttle passengers between Terminal I and II, a people-moving system connecting the two terminals started service in January 2003. A mass rapid transit link has also been approved to connect the airport with Taipei City. This 51.5-km line will start from the airport's Terminal II and run eastward to Taipei and southward to Taoyuan and Jhongli 中壢 cities. The MRT is scheduled for completion in 2012.

Kaohsiung International Airport serves Taiwan's civil air transportation needs in southern Taiwan. An international passenger terminal was opened in 1997, with the then existing terminal being designated as the airport's domestic terminal, and further expansions of airport facilities have continued in order to transform Kaohsiung into a regional business operations center.

The government has been negotiating additional air traffic rights for domestic carriers operating international air services. In 2005, Taiwan revised aviation agreements with Germany, Belgium, Australia, Vietnam, the United Kingdom, and Cambodia. In addition, two new air services agreements were concluded with Guatemala and Burkina Faso.

Airlines Providing Scheduled International Services to/from Taiwan
Air Hong Kong Air Macau Air New Zealand Air Nippon Angkor Airways Asiana Airlines Cargolux Airlines International* Cathay Pacific Airways China Airlines Continental Micronesia Emirates Airlines* EVA Airways Far Eastern Air Transport Corp. Federal Express Airways* Garuda Indonesia Airlines Gemini Air Cargo* Hong Kong Dragon Airlines Japan Asia Airways Jet Star Asia Airways KLM Royal Dutch Airlines Korean Air	Malaysian Airlines Mandarin Airlines Northwest Airlines Pacific Airlines Pacific East Asia Cargo Airlines* Palau Asia Pacific Air Palau Trans-Pacific Airlines Philippine Airlines Polar Air Cargo* Singapore Airlines Singapore Airlines Cargo* Thai Airways Thai Sky Airlines Trade Wind Airlines* TransAsia Airways UNI Airways United Airlines United Parcel Services* Vietnam Airlines
	*Cargo services only
Airlines Providing Code-sharing Services Only
Air Canada Alitalia American Airlines Austrian Airlines British Airways	Continental Airlines Delta Air Lines Lufthansa Qantas Airways
Source: Civil Aeronautics Administration, MOTC

Highways

Highways in Taiwan are classified according to the level of government under whose jurisdiction they fall. Thus, highways are either national 國道, provincial 省道, county 縣道, rural 鄉道, urban 市道, or exclusive highways 專用公路. Highways are classified into seven kinds in accordance with their functions: freeways 高速公路, expressways 快速公路, round-the-island highways 環島公路, cross-island highways 橫貫公路, longitudinal highways 縱貫公路, coastal highways 濱海公路, and connecting highways 聯絡公路.

Two north-south freeways—the Sun Yat-sen Freeway and Formosa Freeway—connect the island's two biggest cities, Taipei and Kaohsiung.

Sun Yat-sen Freeway

Inaugurated in 1978, the Sun Yat-sen Freeway 中山高速公路 was Taiwan's first national freeway. The 373-km route connects Kaohsiung in the south with both Taipei and Keelung in the north.

Several sections of the freeway have become heavily congested. One such stretch is the section running through Taipei, where two 21-km-long elevated viaducts were constructed to run parallel with the freeway from the Sijhih 汐止 interchange to the Wugu 五股 interchange. Similarly, an additional lane was added to each side of the 31-km-long four-lane freeway from Yangmei 楊梅 to Hsinchu; and interchanges, toll stations, and service areas were added to each side of the heavily used 111-km section from Hsinchu to Yuanlin 員林.

Plans have also been drawn up to widen the freeway between Yuanlin and Kaohsiung in southern Taiwan. This project will begin at the Yuanlin interchange and run 158 km to the Wujia 五甲 interchange in Kaohsiung. Bidding and construction started in early 1998 and the entire project is expected to be completed by 2007.

Formosa Freeway

Construction of the Formosa Freeway 福爾摩沙高速公路—which until September 2004 was called the Second Freeway—was started in 1987 to alleviate the heavy load on the Sun Yat-sen Freeway. The freeway extends 432 km from Keelung in the north to Pingtung in the south. The northern section, from Keelung to Hsinchu with an additional 6-km route connecting to Taipei and a 12-km inner beltway to Taiwan Taoyuan International Airport, was opened to traffic in 1993.

Construction of other sections began in 1993. Including a 19-km beltway to Taichung, 17-km branch to Tainan, and 32-km branch to Kaohsiung, the Formosa Freeway system was fully opened to traffic in January 2004 and consists of a total of 518 km of roadways.

Chiang Wei-shui Freeway

The Chiang Wei-shui Freeway, on which construction began in July 1992, traverses the Syue (Hsueh) Mountains 雪山山脈 and connects the Formosa Freeway in eastern Taipei with Yilan County.

The most crucial and challenging part of the expressway is the 12.9-km Hsuehshan Tunnel, the fifth-longest highway tunnel in the world.

The entire freeway was opened to traffic in June 2006, reducing the previous 2-hour-30-minute drive from Taipei to Yilan to a mere 30 minutes.

New Highways

With a comprehensive transportation network established on the island's western corridor, construction has been carried out on National Expressway No. 5 in the east. This expressway, which includes the Chiang Wei-shui Freeway, will ultimately link Taipei with Pingtung in southern Taiwan. Plans for the expressway include a 31-km section between Nangang and Toucheng 頭城, 24-km section between Toucheng and Suao, 86-km section between Suao and Hualien, and 173-km section between Hualien and Taitung. The first two of these were opened to traffic in December 2005 and January 2006 respectively. The Suao-Hualien Expressway 蘇花高速公路 should have begun construction in 2003 but environmental concerns have stalled the project, which then delayed the schedule for the Hualien-to-Taitung section even though that has passed environmental assessment.

The central cross-island section of the 38-km-long Nantou 南投 section of National Expressway No. 6 will connect Formosa Freeway at Wufong 霧峰 and extend east to Puli 埔里. Construction began in March 2004 and is scheduled for completion in 2008.

Remaining portions of the Taiwan expressway network project, including the southern cross-island expressway from Taitung to Pingtung, and the eastern section of National Expressway No. 6 are in the planning stages.

Freeway Traffic Control

Traffic volume during holidays is generally 30 to 50 percent above normal. Accordingly, since 1993, the Taiwan Area National Freeway Bureau (TANFB) under the MOTC 交通部臺灣區國道高速公路局 has adopted a ramp metering control system 匝道儀控管制系統 on national holidays and long weekends to maintain an acceptable flow of traffic.

In addition, High Occupancy Vehicle Control 高乘載車輛專用通行時段管制 has been in force since the 1995 Lunar New Year holiday. High occupancy vehicles, such as buses and cars carrying at least four people, are given priority. As a result, congestion on freeways has been significantly reduced during holidays.

Tolls

Taiwan has 23 toll stations; 11 are on the Sun Yat-sen Freeway, 11 on the Formosa Freeway, and 1 on the Chiang Wei-shui Freeway. Standard toll fees are NT$40 (US$1.20) for cars, NT$50 (US$1.50) for buses and small trucks, and NT$65 (US$1.95) for trailer trucks. In 2005, a total of 573.81 million vehicles passed through Taiwan's tolls, generating revenues of more than NT$22.12 billion (US$661.78 million).

To help vehicles pass through more quickly, there are also "No Change" lanes at every toll station in which drivers use coupons purchased in advance at post offices, gas stations, or service areas.

To meet freeway drivers' needs for more efficient and convenient toll collection, the TANFB mapped out an electronic toll collection (ETC) system and introduced the BOT model for Private Participation in Construction and Operation of Freeway Electronic Toll Collection System 民間參與高速公路電子收費系統建置及營運計畫 in February 2003.

The initial phase, to be implemented on the Sun Yat-sen and Formosa freeways, began operation in February 2006. Only two lanes at toll stations in northbound and southbound directions are reserved for ETC users. One lane is for cars and passenger-carrying vehicles and the other is for trucks and trailers.

Vehicles using ETC lanes must be fitted with an onboard unit (OBU) and an integrated-circuit (IC) card with a minimum deposit of NT$500 (US$14.96). Tolls are automatically deducted from the IC card based on the principle of "toll by mileage" when ETC vehicles pass through toll stations. This system thus contributes to fairer toll payments, more efficient toll collection, and increased convenience for drivers.

Mass Rapid Transit Systems

Taipei City

Mass rapid transit (MRT) systems have proven to be effective means of resolving transportation problems in large cities and, consequently, of alleviating traffic congestion and parking problems. Taipei City is testimony to the benefits that can be derived from MRT systems. Kaohsiung City is currently constructing its MRT system, which is expected to be operational by 2007.

Construction of the Taipei MRT system, the Taipei Metro, began in December 1988. The initial network already in operation has a total length of 76.6 km and consists of the Mujha 木柵 Line, Danshuei 淡水 Line, Sindian 新店 Line, Jhonghe 中和 Line, Nangang 南港 Line, Banciao 板橋 Line, Tucheng 土城 Line, and Siaonanmen 小南門 Line. According to the Taipei City's Department of Rapid Transit Systems (DORTS) 臺北市政府捷運工程局, about 1.1 million people use the Taipei Metro every day.

The second phase of the network, totaling 77.8 km in length, is currently under construction. This includes the Neihu 內湖 Line, Lujhou 蘆洲 Line, Sinjhuang 新莊 Line, Nangang Eastern Extension Line, Sinyi 信義 Line, Taiwan Taoyuan International Airport Access MRT system (Sanchong 三重 to Taipei City), and Circular Line 環狀線 Phase I. All these lines will be completed before 2013.

A third phase of the network, planned for completion by 2021, will extend the Taipei Metro network to a total of 280 km and transport an estimated 3.6 million passengers per day.

The Taipei City Government has improved urban transportation by integrating bus and MRT systems by means of 48 feeder bus routes. It has also designed 11 exclusive bus lanes that cover 53.98 km of streets. Another 5.1-km bus lane on Jhongsiao 忠孝 East and West Road is under construction. Lanes and parking bays for exclusive use by motorcycles have also been established, while crosswalk monitors with countdown timers have been extensively installed at pedestrian crossings to improve safety. All these efforts have helped improve Taipei's transportation environment and quality of life.

Kaohsiung City

Kaohsiung is Taiwan's second-largest city and its premier harbor. Rapid industrial development and population growth have accentuated the need for efficient metropolitan transportation. Accordingly, the Kaohsiung City Government has completed the first phase of the Kaohsiung Metropolitan Area Mass Rapid Transit System Development Plan 高雄都會區大眾捷運系統第一期發展計畫, which adopted the BOT model. The Kaohsiung Mass Rapid Transit (KMRT) system is designed to integrate high-speed and regular railways with the city bus system, thus providing a comprehensive mass transportation network.

The US$6 billion network, totaling 42.7 km in length, will consist of Red and Orange lines with 37 stations. The Kaohsiung Rapid Transit Corp. (KRTC) 高雄捷運股份有限公司 won the KMRT contract in 2000, granting the company concession periods of 6 years for construction and 30 years for operation. Construction of the KMRT project commenced in October 2001, and is expected to start partial trial operation in December 2006 and full operation of the Red and Orange lines in October 2007.

Telecommunications

Following revision of the Telecommunications Act 電信法 and restructuring of the Directorate General of Telecommunications (DGT) 交通部電信總局 in 1996, the telecommunications market has been gradually liberalized and a fair competitive environment established. By the end of 2005, the number of Type I operators had increased to 100 and Type II operators to 597, as compared with only 1 Type I operator and 67 Type II operators in 1996. This demonstrated that the telecom market had been fully liberalized and the various mechanisms instituted and aligned with international practices. Type I covers facility-based services while Type II includes those services using the Type I network, in particular those providing value-added services.

Fixed Networks

Local phone services, formerly monopolized by the state-owned Chunghwa Telecom Co. Ltd. (CHT) 中華電信股份有限公司, are available via fixed networks throughout Taiwan. The Ministry of Transportation and Communications (MOTC) issued three licenses for operating integrated network services to three private operators in 2000, namely Taiwan Fixed Network 台灣固網股份有限公司, New Century InfoComm Tech Co. Ltd. 新世紀資通股份有限公司, and Asia Pacific Broadband Telecom Co. Ltd. (APBT) 亞太固網寬頻股份有限公司. As of the end of 2005, local telephone subscribers numbered 13.62 million, an increase of 85,500 over the previous year, with a penetration rate of 59.79 percent.

Moreover, to fulfill Taiwan's WTO accession commitments, the MOTC reopened license issuances for integrated network and leased circuit services. And on September 20, 2005, the MOTC promulgated revisions of certain provisions of the Regulations Governing Fixed Network Telecommunications Businesses 固定通信業務管理規則, opening applications for licenses of local, long-distance, and international networks. It also subsequently handled the applications for fixed network licenses.

Mobile Communications

Eight licenses were originally issued for second-generation mobile communications business when the sector was deregulated in 1997. Following a succession of mergers, three large operators from the initial eight remain active in Taiwan's mobile phone market. These are CHT, Taiwan Cellular Corp. (TCC) 台灣大哥大, and Far Eastone Telecommunications Co. Ltd. 遠傳電信.

In February 2002, the MOTC auctioned off five third-generation mobile communications licenses. The successful bidders were Taiwan PCS Network Inc. (Taiwan PCS) 聯邦電信股份有限公司, later renamed to VIBO Telecom Inc. 威寶電信; TCC; CHT; Yuan-Ze Telecom Co. Ltd. 遠致電信股份有限公司, a subsidiary of Far Eastone; and Asia Pacific Broadband Wireless Communications Inc. (APBW) 亞太行動寬頻電信股份有限公司. APBW started operation in 2004 and the other four in 2005. It is expected that growth in 3G subscribers will begin to accelerate in 2006, and that they will gradually replace 2G subscribers.

As of the end of 2005, mobile phone subscribers (including 2G, PHS and 3G) totaled 22.17 million, which represented a drop of 589,400 as compared with the same period of the previous year and a penetration rate of 97.37 percent. According to the International Telecommunication Union's (ITU) statistics at the end of 2005, Taiwan ranked 21st in the world in terms of mobile phone penetration rate.

National Communications Commission (NCC)

In light of technology convergence, a worldwide trend has emerged toward the integration of telecommunications and broadcasting under a single supervisory unit. Many nations have already carried out organizational restructuring, as evidenced by the United States' establishment of a Federal Communications Commission (FCC) and the United Kingdom's Office of Communications (OFCOM). Similarly, relevant telecommunications, information, and broadcasting policies in Taiwan were formerly the responsibility of different agencies. Chief among these were the Directorate General of Telecommunications and Department of Posts and Telecommunications 交通部郵電司 of the Ministry of Transportation and Communications (MOTC), and the Government Information Office (GIO) 行政院新聞局. In January 2003, a preparatory taskforce was formed to draw up plans to set up an integrated and independent supervisory agency for overseeing the telecommunications, broadcasting, and other relevant industries. After a series of meetings and public hearings, the Communications Basic Act 通訊傳播基本法 and the National Communications Commission Organization Act 國家通訊傳播委員會組織法 were formulated and submitted for legislative review that same year. Promulgation of the Communications Basic Act in January 2004 provided the legal basis for the NCC's establishment as a regulatory body with independent powers. The NCC Organization Act, promulgated in November 2005, introduced a form of proportional representation for the election of NCC commissioners that is unprecedented in similar agencies of other countries. The Act stipulates that a review committee—formed by 11 academics and experts recommended by political parties based on their proportions in the Legislature—elect 13 commissioners from a total of 18 candidates. Three of these candidates are nominated by the Executive Yuan and 15 by political parties in proportion to the number of seats they hold in the Legislature. In January 2006, however, the Executive Yuan filed a preliminary injunction against, and called for a constitutional interpretation of, the NCC Organization Act on the grounds that the method by which NCC commissioners are selected would violate the division of powers between the legislative and executive branches as stipulated by the Constitution. On July 21, 2006, the Council of Grand Justices ruled that several paragraphs of Article 4 of the NCC Organization Act regarding the selection and nomination of NCC commissioners are unconstitutional, and that they should be rectified no later than December 31, 2008. During this time, the NCC shall continue to function until amendments to the law are made, which should be completed before the said deadline, to ensure the constitutionality and full legitimacy of the agency. The NCC was established on February 22, 2006; as of October 2006, nine commissioners were in office. The MOTC and the GIO continue to be responsible for policymaking as well as guidance and provision of incentives of their respective sectors in order to ensure a healthy industrial development.

The Internet

The Internet has become the foremost tool for the creation and exchange of information throughout the world. It therefore has a huge influence on human life. In line with this international trend and to raise Taiwan's national competitiveness, the government has vigorously promoted liberalization of the telecommunications market and development of broadband systems, thereby leading to a growth of broadband subscribers, both among enterprises and private individuals.

DGT statistics show that as of the end of 2005, broadband household subscribers totaled 4.60 million (including shared subscriber accounts), an increase of 22.69 percent on the previous year. Of this figure, subscribers to ADSL accounted for 3.74 million, to cable modem 541,300, to leased line accounts 21,200, and to Public Wireless Local Area Network (PWLAN) 39,710. ITU statistics for 2005 also showed that Taiwan's broadband penetration rate ranked 12th worldwide and 4th in the Asia-Pacific region.

Rapid developments in broadband Internet have given rise to various new and innovative applications. One such major development has been the integration of broadband Internet and traditional telephone lines to provide Internet telephone services. In order to provide these services to the public and to promote the integral development of the telecommunications market, the MOTC promulgated the revision of certain provisions of the Administrative Regulations on Type II Telecommunications Business 第二類電信事業管理規則 in November 2005. Also in that month, the DGT promulgated revisions of both the Regulations Governing Network Interconnection among Telecommunications Enterprises 電信事業網路互連管理辦法 and the Regulations Governing Telecommunications Numbers 電信號碼管理辦法. These revisions are intended to help Internet telephone service providers acquire subscriber numbers for providing services.

In 2003, the DGT achieved the short-term target of three million broadband subscribers, its first step toward the target of six million broadband subscribers as outlined in the e-Taiwan sub-plan under the Executive Yuan's Challenge 2008 National Development Plan 挑戰二○○八:國家發展重點計畫. The final target should be reached ahead of the 2008 schedule.

Moreover, to reduce the digital divide between urban and rural areas, the DGT has coordinated with the Executive Yuan's Science and Technology Advisory Group 行政院科技顧問組 to promote "broadband access to every village" 村村有寬頻計畫. As of 2005, the rate of coverage in Taiwan's boroughs and villages had reached 99.01 percent, and even in remote areas had reached 90.47 percent. The World Information Society Report 2006 released by the ITU in May 2006 ranked Taiwan tenth in the world in terms of Digital Opportunity Index in 2005. These accomplishments have established Taiwan as one of the leading e-societies in the Asia-Pacific region.

Related Websites
Ministry of Transportation and Communications：	http://www.motc.gov.tw
National Communications Commission：	http://www.ncc.tw
	http://www.dgt.gov.tw
Institute for Information Industry：	http://www.iii.org.tw

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