TAIPEI (WiMAX Day). The Taiwanese telecommunications carrier Chunghwa Telecom was dealt a disappointing setback last week after the National Communications Commission (NCC) of Taiwan blocked its investment in WiMAX licensee Global Mobile.

Chunghwa already owns 14.5% of Global Mobile, and was to invest another TWD 160 million (USD 5.3 million). However, according to a report in DiGiTimes, the NCC rejected Chunghwa’s application “on the grounds that it is against the principle of fair market competition.”

Global Mobile was one of the winners of WiMAX spectrum at auction last year, yet Chunghwa failed to gain a license. At the time, the NCC had ruled that no applicant could own more than 15% of another applicant. Now the NCC says that Chunghwa raising its stake in Global Mobile is prohibited by the original terms of the spectrum auction.

Dow Jones reported last week that an NCC spokesman said that when Global Mobile applied for the WiMAX licenses, it did not indicate that Chunghwa would be an investor.

In response to this ruling, Chunghwa said that it will dissolve its Global Mobile investments, however a Chunghwa spokesman said it will continue to discuss the matter with the NCC to find a resolution.

This comes as a disappointment for Chunghwa as its every effort to obtain a WiMAX license has been stymied. The investment and future partnership with Global Mobile was seen as a sure way for Chunghwa to enter into the market, and it gave Global Mobile a very strong partner to build its network.

The news also left Global Mobile on uncertain ground last week as it must increase its capital base to meet the minimum capital requirements set by the NCC.

According to reports today, Global Mobile chairwoman Rosemary Ho has injected TWD 41 million (USD 1.3 million) into the company to maintain its minimum capital. The company said it will continue to look for other investors.