Telecom chair urges share sale

Chunghwa Telecom Co (中華電信), Taiwan's largest telephone operator, said a government plan to sell a stake worth NT$78 billion (US$2.3 billion) in the former monopoly this year hasn't made progress.

"We haven't heard anything from the government on the timing or the size of the stake sale," Chairman Hochen Tan (賀陳旦), 53, said in an interview. He said the government, which faces a legislative election in December, should start the sale because investors are interested.

President Chen Shui-bian's (陳水扁) sale of more than a third of the company during his first term prompted opposition from trade unions and opposition parties. The Ministry of Transportation and Communications, which owns a 65 percent stake, said in May it aims to sell another 15 percent stake this year to help reduce the government's budget deficit.

`Not possible'

"This year is not possible for the stake sale," said Michael Ding (丁予嘉), who oversees the equivalent of US$4.7 billion as president of Fubon Asset Management in Taipei. "They haven't done any roadshows for potential investors."

Taiwan needs to sell more stakes in companies to help plug a budget deficit forecast to reach a record NT$304 billion this year. Trade unions are opposed to the plan because workers will lose their monthly state pensions.

Taiwan's government next year may sell NT$107.8 billion more worth of shares in Taiwan Tobacco & Liquor Corp (台灣菸酒公司), Taiwan Power Co (台電) and other companies in which it has stakes.

Fubon Asset and units of Fubon Financial Holding Co (富邦金控) own more than NT$1 billion in Chunghwa Telecom shares. Ding said he will keep his stake in the company because the dividends return more than 8 percent annually.

No plans are in the works for a roadshow to sell the Chunghwa Telecom stake, Hochen said from his 11th-floor office overlooking the Chiang Kai-shek Memorial Hall in downtown Taipei.

"We do remind the government that the international market is interested," said Hochen, a former vice minister of communications who rides a bicycle to and from work. "It's a good time to sell the stake."

Chunghwa Telecom's shares have gained a 10th since Jan. 1 compared with a 0.33 percent drop for the benchmark TAIEX in the same period. The company's shares were unchanged at NT$54 at the close of trade in Taipei.

The company is on target to reach its forecast 2004 net income of NT$41.6 billion, Hochen said. In the first six months, the company posted NT$26.3 billion in net income.

Chunghwa Telecom has increased its average revenue per user, or ARPU, to NT$740 per month from NT$719 per month earlier this year by increasing business subscribers. ARPU will remain stable for the rest of this year, Hochen said.

3G to be delayed

The company will delay the introduction of what Hochen said will probably be the nation's first high-speed wireless Internet, or so-called 3G, service for cellular phones to "early next year" from a previous target of the third quarter this year.

The company has delayed the rollout twice this year because availability of handsets is too limited, and existing 3G phones exhaust their battery charges too quickly, he said.

"The Taiwan phone companies feel there's no business case because of the lack of handsets," said Dominic Grant, an analyst with Macquarie Securities Ltd.

The company paid NT$10.2 billion for a government license to provide the service, which it originally planned to introduce in mid-2003 after starting to build the first stage of a NT$30 billion network in October 2002.