Coverage improves but Consistent Quality varies for Taiwanese mobile operators post-merger

It seems that the mobile network industry has witnessed an increase in mergers and acquisitions in recent years across all continents. Some of the drivers include the need to achieve economies of scale and better finance the high costs of mobile network deployments or enhancing customer offerings through the convergence of mobile and fixed services. Opensignal has previously analyzed the effect of mergers between operators on the mobile network experience of our users in several markets, such as Indonesia, Italy, Malaysia, Spain, Thailand and the U.K.

This time, we focus on the impact on Opensignal users of two major mergers in Taiwan. Both mergers occurred simultaneously, reducing the number of national operators from five to three players – a unique situation, even on a global scale. The mobile landscape in Taiwan significantly changed when FarEasTone completed its merger with GT (APT’s brand) and Taiwan Mobile did the same with T Star. GT and T Star were smaller players, holding 6.5% and 8.5% of the market share in Q3 2023, according to GSMA Intelligence. In the same period, FarEasTone and Taiwan Mobile each had a market share of less than 25%. After finalizing mergers with their rival operators, they controlled 29.8% and 33.3% of the market in Q1 2024, respectively — narrowing the gap between them and Chunghwa Telecom, which maintained a 36.9% share. This analysis specifically examines the impact of Taiwanese mergers on Opensignal users, excluding Chunghwa’s scores from the assessments.

Key findings:

• Improved Coverage Experience. FarEasTone's and Taiwan Mobile's Coverage Experience scores substantially increased after the mergers.
• Shaky Consistent Quality. Both mergers appear to have initially caused network integration issues, resulting in lowered Consistent Quality. However, our FarEasTone users observed more substantial declines in Consistent Quality across the country and Taiwan’s main cities than those with Taiwan Mobile.
• Changes in spectrum usage. There are shifts in 4G spectrum bands usage post-mergers. FarEastTone uses the 700MHz band more frequently than it used to, and it now has access to 2.6GHz TDD band (band 38), both due to using GT’s spectrum assets. Our Taiwan Mobile users also observed slight changes in their spectrum band usage — as the operator is now using the 900MHz and 2.6GHz FDD bands for 4G connections, due to its access to T Star spectrum licenses. 

We generally expect that combined network infrastructures of merging operators lead to improved coverage of the new entity — especially if both operators have previously focused on covering different geographical areas. For example, our predictive analysis of the potential effects of the 3 and Vodafone mergers in the UK indicates potential significant coverage improvement for the combined operator. Similarly, examining the Coverage Experience metric for Taiwanese operators before and after the merger, we can observe notable increases for both FarEasTone and Taiwan Mobile.

Our users on FarEasTone’s Coverage Experience score increased from 8.2 to 8.5 points on a 10-point scale, while Taiwan Mobile’s users observed an even higher increase, from 8.1 to 8.6 points. Both operators’ scores in 2024 are statistically tied. The improvements in Coverage Experience scores mean both operators have a wider and larger geographic footprint of coverage in populated areas of Taiwan compared to the prior year. Operators’ own continuous investments in increasing their 5G footprint have also paid off, such as Taiwan Mobile’s partnership with Nokia, which was signed to boost the performance and capacity of its 4G and 5G networks, especially in rural areas of the island.

Now we turn our attention to Consistent Quality, a crucial metric for understanding how well a network meets the demands of everyday mobile application usage. Consistent Quality measures if the network is sufficient to support common mobile application requirements at a level that is ‘good enough’ for users to maintain (or complete) various typical demanding tasks on their devices. It assesses a number of experience indicators such as download speed, upload speed, latency, jitter, packet loss, and time to first byte.

Although both mergers were finalized in December 2023, the subsequent network integration process appeared to prove challenging for both FarEasTone and Taiwan Mobile. Around the time of the merger in December 2023, FarEasTone’s Consistent Quality dropped significantly from 82.5% to 76.2%, primarily due to poor packet discard on GT’s network. While the score has gradually improved since, the data collected during the 90-day period starting on August 1st, 2024, shows that FarEasTone’s Consistent Quality score remains well below pre-merger levels.

Looking across Taiwan’s main regions, we can see that Consistent Quality scores have generally dropped for FarEasTone on a year-on-year basis in all regions bar Eastern, where they are still statistically similar. The declines for FarEasTone have been especially high in Taiwan’s largest cities — dropping by 7.8 percentage points in Taipei, 6.2 in New Taipei, 5.6 in Taichung, and 4.9 in Kaohsiung. Taiwan Mobile has seen moderate increases in its scores in all four regions and in many Taiwanese cities.

Operators joining forces does not only mean combining their infrastructural assets, but usually their mobile spectrum assets as well, unless local regulators mandate the divestment of certain frequencies. For 5G deployments, Taiwanese operators rely mainly on the 3.5GHz band obtained during the 2020 spectrum auction. 

However, we see a slightly different story when looking at 4G connectivity and the distribution of 4G readings across the spectrum bands for all Taiwanese operators, pre- and post-mergers. 4G connectivity is still prevalent in Taiwan. Nearly 70% of mobile phone users still subscribe to 4G services, according to data from the NCC. The uptake of 5G services is still relatively slow, compared to the initial adoption rates for 4G services. A survey conducted by the NCC revealed that Taiwanese users are hesitant to migrate from 4G to 5G services due to substantially higher monthly fees for 5G packages than for the 4G ones, while their need for mobile data can be sufficiently met with 4G connectivity.

FarEastTone uses the 700MHz band more frequently than it used to (an increase from 21% to 29% of share in total readings), as it has gained access to an additional 2x10MHz in the 700MHz, previously owned by GT. We also see this operator using the 2.6GHz TDD band (band 38) for 4G connectivity — which it didn’t before the merger, as it didn’t have access to these frequencies. GT owned the licence to the entire 50MHz block in the 2.6GHz TDD segment.

Taiwan Mobile also observed slight changes in its spectrum band usage — namely, it uses the 900MHz and 2.6GHz FDD bands for 4G connections, which it also couldn't use pre-merger due to the lack of access to these bands. These were the bands in which T Star had spectrum licences.

The Asia Pacific region has witnessed numerous big MNO mergers in recent years — such as Indosat Ooredoo and 3 in Indonesia, Celcom and Digi in Malaysia, and DTAC and True Move H in Thailand. These markets usually see intense competition, with numerous players in the market. The high infrastructure costs and the push to deploy 5G networks pose greater challenges for smaller underperforming players and encourage them to combine resources, customer bases, infrastructural resources and spectrum assets to gain economies of scale. Mergers enable operators to consolidate and optimize spectrum holdings, often resulting in increased capacity and coverage; however, network integration remains a complex and challenging process, as indicated in this Taiwan merger analysis.

Opensignal will continue monitoring how FarEasTone and Taiwan Mobile fare after the mergers and how this impacts our users in this new reality for the Taiwanese mobile landscape. To stay up to date, subscribe to our newsletter. You can also read our latest Mobile Network Experience report on Taiwan, where you can see the performance of Taiwan’s operators across our speed, experiential, coverage and consistency metrics.