Far EasTone may promote WiMax handsets, but not Skype

Far EasTone's high-speed wireless network will support WiMax phones, but if it distributes a handset of its own it will not put Skype on it

Far EasTone Telecommunications doesn't plan to shy away from WiMax handsets once its high-speed wireless network is up and running in southern Taiwan, but the company certainly won't welcome Skype's popular Internet telephony software.

The Taiwanese company is the only major mobile phone service provider on the island to win a license to build a WiMax network and offer high-speed wireless Internet access to people in the southern half of the island. The conundrum it faces is the development of handsets designed to run over WiMax networks using VoIP, which bypass traditional mobile phone and landline networks to give users low-cost and sometimes no-cost calls. Such devices could cut into mobile phone service revenue for all companies.

Far EasTone will support WiMax phones on the network, but if it decides to distribute a WiMax handset of its own, it will not put Skype on it, said Jan Nilsson, president of Far EasTone, during a news conference in Taipei.

Earlier this year, he blamed VoIP phone calls for the first ever revenue decline in Taiwan's telecommunications industry in 2006, lamenting the fact that people on the island have turned to using free or low-cost long-distance calls over the Internet in place of traditional phone calls.

Skype is the favorite VoIP software of Taiwan, due in large part to an agreement Skype inked with popular Internet portal operator PCHome Online to market and distribute its software in Taiwan.

Nearly 20.5 million copies of Skype's software have been downloaded from PCHome's Skype site so far, a huge number considering Taiwan's population is only around 23 million people.

Far EasTone plans to have its WiMax network up and running by the end of next year or early in 2009, said Nilsson. The company plans to seek a partner in northern Taiwan in order to offer full-island service. Taiwan awarded WiMax licenses to six companies earlier this year, three each for the north and south of the island.

Far EasTone won the right to build a WiMax network in southern Taiwan. It was the only one of the island's major phone service providers to win a license, edging out rivals Chunghwa Telecom, the biggest phone company in Taiwan, and Taiwan Mobile.

WiMax base stations can send wireless broadband Internet signals far greater distances than the Wi-Fi technology used to deliver wireless Internet access in coffee shops and airports today. Although estimates vary on how far WiMax signals can go, in a densely populated place such as Taiwan, the distance should be between 2 kilometers (1.24 miles) and 4 km.