The Rundown: APT-FET Deal, Microsoft-Hon Hai Partnership, and FSC Fines Securities Firms

A bi-weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taiwan’s TOPICS

NCC Approves APT-FET Deal

Taiwan’s National Communications Commission (NCC) on March 3 approved local telecom operator Far EasTone’s (FET) application to share its 5G bandwidth on the 3.5GHz frequency band with Asia-Pacific Telecom (APT). As a condition of its approval, the NCC requested the establishment of an oversight task force for internet security and the installation of 2,000 4G and 5G base stations to increase coverage. The deal is now pending the approval of the Fair Trade Commission (FTC).

APT signed a 20-year 5G sharing deal with FET last September – the first such deal in Taiwan – after its own failed bid for the much-desired 3.5GHz frequency band. APT will pay NT$9.47 billion in network deployment costs in exchange for rights to use the bandwidth.  

As of late 2020, domestic mobile telecommunications reached 29.3 million users. Chunghwa Telecom dominates the field with 10.5 million subscribers. Taiwan Mobile comes in second with 7.1 million, followed by FET’s 7.07 million, Taiwan Star Telecom’s 2.5 million, and APT’s 2.02 million subscribers.

The partnership will not only set a precedent for shared networks and frequency bands, but also catapult FET ahead of Taiwan Mobile to become the second largest telecom service provider if including APT’s subscribers.

Microsoft Announces Partnership with Hon Hai

Microsoft announced on March 4 that it would begin partnering with Taiwanese contract manufacturer Hon Hai Precision Industry Co., with an eye to helping Hon Hai accelerate its digital transformation through access to Microsoft’s cloud capabilities and global resources.

Under the partnership, Hon Hai will be given access to Microsoft’s Azure AI platform, digital data library, and other cloud services, strengthening its innovation and R&D capabilities through cloud-native development, DevOps, and other practices. It will also fully adopt Microsoft 365 to establish a hybrid workplace and improve its overall agility and adaptability.

Lastly, Hon Hai will place core enterprise systems on the Azure cloud, linking together its production facilities across more than 20 countries and thereby optimizing management of its operations from its corporate headquarters.

Hon Hai Chairman Young Liu noted that in 2019, the company introduced its own three-phase plan to escalate its digital transformation, which it hoped would increase the company’s competitiveness and drive forward new trends in the manufacturing sector. He said that the new partnership with Microsoft would further strengthen Hon Hai’s technological capabilities, elevating it from a manufacturing company to a technology company.

FSC Fines Securities Firms Over Information Security

Taiwan’s Financial Supervisory Commission (FSC) fined ten securities firms including Cathay Securities, Fubon Securities, and Yuanta Securities over information security breaches of their high-speed trading services. Fines and warnings were issued after the FSC conducted an inspection in November 2020 of Taiwan Stock Exchange’s information center in Banqiao, where securities companies house their trading information systems and place servers to use the center’s colocation service.

According to Securities and Futures Bureau Deputy Director-General Kuo Chia-chun, the inspection found that securities firms had failed to comply with proper information security practices. Cathay Securities, Concord Securities, and SinoPac Securities each received warnings and fines of NT$1.44 million – the highest amount levied against the sanctioned firms – for “serious” offenses. Other punishments included restrictions on an array of business expansions.

The inspection also found that both Concord and SinoPac securities enabled external technologies to monitor their servers remotely while Cathay Securities installed a client-developed trading software on the server. All three firms failed to keep records of their clients’ transaction information, said Kuo.

MasterLink Securities was handed a NT$720,000 fine for failing to install a firewall and allowing external server monitoring via remote connections. Fubon Securities and JihSun Securities were also fined NT$240,000 each for failing to install a firewall while others were ordered to improve minor problems.

This edition was translated from the original Chinese by Jason Wu.

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