Market saturation and tough economic times are forcing Taiwan's major telecom retailers to close over 200 outlets this year.
"The current economic downturn and slower growth in demand for mobile phones have forced us to downsize our retail operations over the last two years," said Chiang Ming-cheng (江明正), spokesman for Arcoa Corp (全虹通信).
Arcoa closed some 80 of 460 sales outlets during the last two years due to slowing demand, Chiang said.
"We had been too optimistic about the new generation of mobile phones," Chiang said.
"But, obviously, the GPRS [general packet radio service] models are seeing slow uptake in the market. Also, we don't see mass production of third generation mobile phones happening soon, as the current technological development is still in a bottleneck," he added.
GPRS is a wireless standard for use in mobile phones and wireless Internet devices such as personal digital assistants (PDAs). It will transmit data at speeds 10 times faster than WAP (wireless application protocol).
Arcoa hopes to manage a distribution network of 400 stores in Taiwan and is still struggling to break even.
"We have closed some unprofitable stores but we still plan to open new stores -- if they prove to be profitable," Chiang said.
Arcoa is not alone in shutting retail stores. Cellphone retailer Aurora Corp (震旦行) also cut the number of its stores to 130 from 300 this year.
"This year will be the worst year for us," said Su Juei-chi (蘇睿麒), spokesman for the company, hinting that Aurora is expected to report a financial loss of over NT$2 billion for this year. "As we plan to reduce manpower and liquidate some non-core businesses, we expect to cut losses by NT$1.3 billion next year."
The nation's mobile phone penetration rate stands at over 80 percent.
RSS