The nation's three local telecom stock plays soared yesterday amid market rumors and earnings reports -- each moving up the 7 percent limit during mid-day trading with only Taiwan Cellular Corp (
Rumors that Far EasTone Telecommunications (遠傳電信), the nation's third-largest mobile telecom firm by subscriber base, would soon launch its initial public offering (IPO) sent shares of its parent company, Far Eastern Textile Ltd (遠東紡織), soaring in mid-day trading as well. And Far EasTone's president, Joseph O'Konek, did not deny the report.
"We're in our quiet period right now," O'Konek said, adding that the application had already been filed and was awaiting approval by the Securities and Futures Commission.
Far Eastern Textile stock ended the day up 6.3 percent at NT$21.90 per share. Far EasTone also announced it had gained 8.8 percent more mobile phone service users since the end of last year, giving it a total of 3.7 million subscribers.
Shares of Taiwan Cellular also jumped 5.8 percent yesterday, ending at NT$51 per share on news its revenues for the first quarter reached NT$12 billion (US$366 million), with pretax income of NT$4 billion (US$122 billion). The company also said its subscriber base neared 5.4 million customers, making it the nation's largest mobile phone service provider.
Company spokeswoman Irene Chi said Taiwan Cellular's income grew due to an increase in customers, and expects the coming Global Packet Radio Service (GPRS), or second generation mobile Internet system, to add to company revenues in the second half of the year. It remains unclear, however, when the service will begin.
"It really depends on the performance of the GPRS handsets, so it's really hard to say ... maybe the second quarter or third quarter," Chi said. "We really want to launch it when ... the speed is to people's expectations, otherwise its going to be another disappointment."
The first try at mobile Internet use in Taiwan, WAP (Wireless Application Protocol, or first generation), won a resounding thumbs down from consumers who were frustrated by its slow service. This system ran at 9.6 kilobits per second (kbps), or the speed of a 1993-era computer modem. While GPRS is expected to run 10 times faster, the phones have presented a problem in the equation.
The first round of GPRS handsets currently on the market run at between 24 and 36 kbps, much slower than the system is capable of sending and receiving data. Eschewing the slow speeds and afraid of incurring customer wrath for another slow mobile Internet system, the nation's four major mobile telecom operators -- Chunghwa Telecom Co Ltd (中華電信), Far EasTone, Taiwan Cellular and KG Telecommunications Co (和信電訊) -- opted to wait for better handsets before launching their GPRS services. All four firms have tested their GPRS systems.
Chunghwa Telecom rose 7 percent -- the government limit -- to NT$61.5 on news it planned to pay a cash dividend of NT$4 per share this year.
In related news, four mobile telecom firms plan to spend NT$500 million in order to set up underground communications systems in the Mass Rapid Transit (MRT, subway) system. By the end of the year, people riding the trains will be able to jabber away with friends and family without being cut off or receiving poor service.
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