Delta and Northwest Airlines may be getting together in the US, with rumors of other possible carrier consolidations. This is always a good idea in a bloated industry with more players than necessary, especially so in economic hard times. I said before and others echo for me: Taiwan's telecom sector desperately needs consolidation.

With increasing reports of local small-fry operator Vibo's woes, one can theorize that some "involuntary" consolidation of the market may occur.

Recently Vibo (which is 3G-only, kudos for that, but in last place in the market) said it would drastically cut capital spending by 44 percent. Not a good move for a company that needs to build on its small base and ramp up its tech advantage. Now comes news that the company has lost around US$360 million since its founding some eight years ago. Doesn't sound so terrible, does it?

Well, the company's booked total REVENUE last year was about US$120 million. So, yeah, it's pretty bad.

Is there any hope for this company? Sure. Someone else could go under first and bequeath Vibo some customers. However, the writing's been on the wall for a while now. The company and its brand have become less and less visible... one rarely sees its ads these days. I don't know a single person who uses its service. 

Consolidation is a good thing for telecoms, sometimes it's just not voluntary.

More to come
--jag

 

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