Chunghwa will spend half the money on infrastructure, replacing miles of copper phone lines with fibre-optic cable and the latest switches, a company spokeswoman said. The other half, she said, will go towards developing services and applications on the network designed around the idea of Web 2.0 (a synonym for second-generation World Wide Web).

Taiwan has already rolled out Wi-Fi in Taipei, its largest city, and plans to use WiMax to turn the entire island into a wireless Internet zone in the future. Chunghwa, a key player in the wireless and wireline build-ups on the island, is one of two companies offering Wi-Fi across Taipei.

Chunghwa also plans to continue building on Web 2.0 projects already up and running, such as Xsuite, which offers users drawing applications, blogs, Vblogs (video blogs), photo diaries and other services. Around 3 million people have already signed up for Xsuite in Taiwan.

The idea of Web 2.0 comprises applications and services based on the more collaborative and sharing capabilities of the Internet, rather than static Web pages.

The company will also begin to transfer voice phone calls to Internet protocol from traditional switch lines, continue to build its television and movie broadcasting service and delve into other multimedia services.