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DigiTimes recently had the opportunity to talk to Chia-jiun Cherng, president of Digital United, which owns Taiwan's second largest ISP, SeedNet, when discussion centered on the potential of VoIP, and its impact on the telecommunication services industry.

Q: The development of the Internet has been very fast. What do you predict will be the next big thing in Internet applications?

A: The trend now is for all Internet communication to move to Internet Protocol or IP. Data and mobile communication will all be based on IP, and video and voice communication will also move in that direction. Mobile phones will eventually be IP based, and although this won't happen in the near future, it is an inevitable trend. I also think WiMAX is something that can be expected to change the dynamic of how we communicate.

Q: The popularity of Skype software seems to be increasing business for VoIP-equipment makers. What do you think of the future of VoIP?

A: We've been talking about VoIP for years, but there are many different VoIP solutions, and different service carriers may opt for different solutions. Therefore, developers of hardware solutions for VoIP may make money, but it is not easy for service providers to make a profit.

VoIP represents a big threat to mobile-phone roaming services provided by traditional telecom firms. Many people are now using Skype to make international calls over the net. A few years ago VoIP was not popular because of bandwidth problems. But now the bandwidth is no longer a problem, and VoIP at 32K can achieve rather good voice quality. And with ADSL's average bandwidth at 1M/128K, voice quality is comparable to traditional phone services.

Since it is not easy to make a profit out of VoIP services, ISPs cannot treat it as a separate business. We see it as an integral part of data communications, bundling it with broadband Internet and other added-value services. One Internet line that processes audio, visual, and data communications - that is how we believe that profits can be generated.

Q: Skype is a kind of peer-to-peer (P2P) application. But one of your clients in the P2P business, Kuro, is facing charges of intellectual property rights infringement. How do you see the case?

A: The problem is not the P2P file-sharing technology; it's the music industry itself that is the problem. The development of technology has had a lot of impact on the music industry, and the movie industry as well. I think they need to come to grips with current reality and try to understand what technology change may bring, and to figure out ways to adapt. The law should also change with the development of technology.

Q: Compared to Japan and South Korea, Taiwan's broadband is both more expensive and slower. Can Taiwan overcome this problem?

A: This is all about competition in a healthy market. In South Korea, cable modems account for 40% of the market, while ADSL holds 60%, which gives ADSL providers enough of an incentive to make improvements, in order to take a bigger share of the market. In Taiwan, there are only 200,000 cable-modem subscribers, a market hardly competitive in the face of ADSL, which has three million subscribers. Without competition, there usually won't be improvements. Subscription fees are not a major issue in terms of competition here.

A country has to make a choice between telecommunication liberalization and income for national coffers. There must be some way for Taiwan to solve its bandwidth problems. It's up to the government to solve them. It is possible for Taiwan to see cheap and quick broadband services similar to those in Japan and South Korea, but the market mechanism must be set straight first.

Q: Will SeedNet enter the digital content sector?

A: Internet management is our expertise, and we will focus on that. We'll let content professionals handle the job of providing content. However, we would not rule the possibility of strategic partnerships with content providers.