It's Harvey Chang to the rescue

Taiwan Cellular Corp (台灣大哥大), the nation's largest mobile service provider, yesterday named Harvey Chang (張孝威), Taiwan Semicon-ductor Manufacturing Co's (TSMC, 台積電) chief financial officer, as its new president, the company said in a statement.

Chang will replace Chen Chin-hsing (陳進興) in the posting as of Sept. 8, the statement said.

"With Chang's managing expertise, I believe Taiwan Cellular will continue to lead the telecom market," said Daniel Tsai (蔡明忠), chairman of Taiwan Cellular, in the release.

Tsai, who's also vice chairman of Fubon Financial Holding Co (富邦金控), Taiwan's biggest financial services company, took over the chairmanship of Taiwan Cellular in the middle of last month.

He has vowed to improve corporate governance and employ cost-cutting measures to reverse a more than 10 percent slide in the company's net income last year.

Due to slow sales, Taiwan Cellular's profits fell 10.8 percent last year.

Tsai had said the company hopes to meet its goal of boosting full-year profits by about 10 percent.

Competition

But he is facing more competition in a market where Far EasTone Telecommunications Co (遠傳電信) announced on July 17 it would buy smaller rival KG Telecommunica-tions Co (和信電訊) to create the nation's second-largest operator.

Currently, Taiwan Cellular has 9.05 million users, accounting for 32 percent of market share as of the end of this month.

The company reported NT$46.6 billion in sales last year and is targeting NT$50.5 billion this year.

Taiwan Cellular's net debt last year more than tripled to NT$54.6 billion from 2001, raising the debt-to-asset ratio to 47 percent from 29 percent a year earlier after buying 550 million shares of the state-run Chunghwa Telecom Co (中華電信) with NT$27.7 billion.

The appointment of Chang as Taiwan Cellular's president, therefore, is viewed by analysts as a savvy move to help improve the company's finance and corporate image.

Shares of the mobile-service company yesterday rose NT$0.30, or 1.2 percent, to NT$26 before the announcement.

"Chang's reputation and ability will definitely bring advantages for the company," said Tony Tsai (蔡東松), an analyst at Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor's.

Complications

Tsai said Taiwan Cellular is known for its complicated ownership structure and lower financial transparency, which present challenges for most shareholders.

"Chang is exactly the master on how to manage a company's finances to assure its investors and customers," Tsai said

"But before we see any concrete policy-making after Chang assumes office, we'll maintain our current ratings for Taiwan Cellular at twA+/twA-1," Tsai said.

Meanwhile, Taiwan Semiconductor yesterday confirmed that Chang will be leaving his post with the company and said it has appointed Lora Ho (何麗梅), currently TSMC controller, to succeed Chang in the company.

"Harvey Chang has made great contributions to TSMC in the past five-and-a-half years he has been with the company ? We give Harvey our very best for his future success," said Morris Chang (張忠謀), TSMC's chairman in a statement.

Harvey Chang, also an independent board director of Fubon Group, entered TSMC in January 1998. Prior to joining TSMC, he served as vice president of KG Telecommunications Co (和信電訊) in 1997, chairman of China Securities Investment Trust Corp (中華投信) in 1993 and president of the China Development Industrial Bank (中華開發工銀) in 1992.