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Core businesses to be divided into separate units

State-run giant Chunghwa Telecom Co (中華電信) announced plans to restructure, a move that will separate its long-distance and mobile-phone service groups into individual business units, the head of the company said yesterday.

"In order to make the company's operations more clear and efficient, we have separated our fixed-line services and mobile-phone services into separate units," said Chunghwa Chairman Mao Chi-kuo (毛治國).

"Fixed-line service, mobile-phone service and Internet-data service are Chunghwa's three core businesses, so we decide to restructure the huge company based on these three product lines," Mao said.

He made the announcement yesterday at the six-year anniversary celebration of Chunghwa's spin-off from the government's Directorate General of Telecommunications.

Mao has been at the helm Chunghwa for the past two years.

"Over last 20 months, the company went through a very difficult time as the telecom market gradually opened up and we faced the pressure of corporatization," he said.

Mao recently began streamlining the company to help it retain its competitive edge.

Since 1996, the company's 35,000 strong workforce has been cut to 28,000.

While several attempts to move the company closer to privatization have failed, one industry watcher said Chunghwa is beginning to change.

"Chunghwa is feeling pressure from shareholders as well as from market competition to speed up its development plan," said Alex Tung (董家均), a telecom-industry analyst at Jih Sun Securities Co (日盛證券).

Chunghwa Telecom also understands its strength lies in controlling its huge networks and is therefore aggressively promoting its ADSL services.

"Once Chunghwa gains a large number of subscribers, it will be hard for other market entrants to steal customers," Tung said.

Chunghwa split its marketing section from its management department just over a year ago.

"With the telecom market at a turning point, Mao has done a pretty good job," Tung said.
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