Microsoft reportedly is considering reducing its licensing fees in order to get Chunghwa Telecom (CHT) to adopt its MSTV IPTV system in place of the existing OMP (open media platform) developed by Alcatel-Lucent for CHT's multimedia on demand (MOD) platform, according to industry sources in Taiwan.

Microsoft quoted CHT a licensing rate of over US$40 for a new subscriber of MSTV and a discounted rate for existing MOD subscribers who shift from OMP to MSTV, plus a percentage of the licensing fee as an annual charge for upgrading and maintaining the system, the sources pointed out. The high quotation is possibly the key reason why both sides are still negotiating, the sources explained.

In order to close the deal, Microsoft is considering eliminating the licensing fee for existing MOD subscribers who transfer to MSTV, the sources indicated. Such a deal would save CHT a large amount in licensing fees, the sources noted. For Microsoft, securing the contract may be more important than losing out on licensing fees because the MSTV business model in Taiwan could be used to tap markets in Southeast Asia, the sources noted.

Microsoft Taiwan, in response to the report, declined to comment.

In related news, Taiwan's National Communications Commission (NCC) on May 1 examined CHT's application for E.164-format VoIP phone numbers and decided to release 30,000 numbers to CHT.