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Taiwan to spend $664 mln on WiMax development

TAIPEI, Oct 22 (Reuters) - Taiwan pledged on Monday to invest US$664 million over the next few years on WiMax, as it agreed to work with five major manufacturers to develop technology for the emerging next-generation wireless standard.

Officials from the five manufacturing partners, Motorola MOT.N, Alcatel-Lucent ALUA.PA, Sprint Nextel S.N, Starent Networks STAR.O and the networking unit of Nokia NOK1V.HE, all joined in a ceremony in Taipei to mark the new agreement.

Taiwan has been an aggressive advocate of WiMax, awarding six licences in July for the standard, billed as much faster than current third-generation (3G) mobile services, with an eye to taking a slice of the fast-growing high-speed data market.

Taiwan economics minister Steve Chen said the WiMax services sector in Taiwan alone would be worth US$4.24 billion by 2012.

“The signing of the memorandums of understanding will signify a step forward in the global development of WiMax technology,” he said at the ceremony. The five partners agreed to help develop WiMax products and services in Taiwan, but gave few additional details.

Alcatel-Lucent has said it will open a WiMax research and development centre in Taiwan. Sprint Nextel, the No. 3 U.S. wireless carrier and a big WiMax booster, also said on Monday it would consider setting up a similar centre.

“By setting up a lab here, we will be able to offer a range of equipment, devices, applications and to help the industry develop further devices and infrastructure,” said Patrick Plas, COO of GSM/WiMax at Alcatel Lucent.

Taiwan has become a “WiMax role model” for Asia and the rest of the world, said Simon Leung, Asia Pacific president for Motorola, another strong WiMax booster.

Last week, Motorola announced contracts to supply WiMax technology to Far EasTone 4904.TW, one of the six Taiwan licensees, though it did not give a value for the contracts.

“We recognise Taiwan’s strength in manufacturing and developing capabilities,” Leung said.

Taiwan and other Asian markets have been among the most aggressive adopters of WiMax, as companies look for the next technology to boost transmission speeds needed to make data-rich applications like video downloads and streaming more practical.

Other Asian markets in various stages of WiMax network development include South Korea, Vietnam and Japan.

Global investments in WiMax networks are expected to reach at least US$5.2 billion between 2006 and 2008, according to Taiwanese think thank Market Intelligence Center, with spending growing at a compounded annual rate of 150 percent.