For now, a major challenge to a successful sale is Chunghwa's IPO price. Some observers in the securities industry say the government did not take sufficient account of market conditions when setting the price. Look at what's happening worldwide with telecommunications shares. Everything could go through a massive re-rating in the next few months. Fearful of job cuts at a company that industry observers say has one-third too many employees, the union also demanded guarantees from the government that, after privatization, salaries would not be lowered and employees would not be required to retire before the age of 65.
Some investors say a bigger concern than labour demands is recent management instability.
Adding to the anxiety, Chunghwa Chairman Chen Yao resigned a week later, citing family reasons. Maybe there's nothing to worry about, but it's very suspicious. In the long term, however, one industry analyst says there are larger issues at stake. In five years' time, no one will care about these things. What they will care about is whether there is a truly competitive market with a level playing field for new entrants and whether there is high quality of service for the consumer.