China Mobile not allowed to invest in FET, says Taiwan government agency

Taiwan's National Communications Commission (NCC), in response to local carrier Far EasTone Telecommunications' (FET) signing with China Mobile Communications for strategic alliance and the latter's investment in the former for a 12% stake, has indicated that the existing regulations do not allow Chinese enterprises to invest in any Taiwan-based telecom carrier that has set up own operating infrastructure.

The NCC remarks has cast legal uncertainty over China Mobile's planned investment in FET, according to industry sources in Taiwan.

China Mobile's planned investment will not be realized until the Taiwan government approves it, with the condition specified in the contract signed with the China company on April 29, according to FET vice chairman and president Jan Erik Nilsson at a press conference on May 6.

However, FET has begun to implement the strategic alliance with China Mobile by forming a task force led by president Jeffrey Gee for New Century InfoComm Tech (Sparq as trade name), an operator of fixed-line telecommunication service and FET's sister company, Nilsson indicated.

FET will set up a business office or branch in Beijing, China, by the end of 2009, Nilsson said. Through cooperation with China Mobile, FET plans to initially provide its mobile communication service to companies or business units set up in China by Taiwan-based enterprises and mobile valued-added services to handset users in the China market, Nilsson said.

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