Far EasTone Telecommunications Co (
Far EasTone, which has a one-third share of Taiwan's mobile services market, said net income would grow to NT$14.7 billion, or NT$3.79 a share, this year, from NT$14 billion last year.
"Further cost savings and a synergy effect [after acquiring KG Telecommunications Co (和信電訊)] will be the main reasons behind the expansion," chief financial executive Yvonne Li (李彬) said, without elaborating.
Far EasTone absorbed KG Telecommunications, previously the local partner to Japanese mobile giant NTT DoCoMo Inc, in a NT$29.7 billion deal in late 2003.
Revenue will also climb by 5 percent to NT$68.78 billion, faster than the 2 percent expansion expected for the overall telecom market here, company president Jan Nilsson told reporters during an annual press gathering.
"Five percent is already respectable growth for stable telecom operators as it is increasingly difficult to count on an expansion in revenue to boost profits in a saturated market like Taiwan," said Stevie Chou (
Chou expects slow growth from the company's new business, including third-generation (3G) services to be launched later this year. As such, Far EasTone's financial forecast exceeded his estimates.
"Obviously, Far EasTone has an upbeat outlook on the industry," he said.
In contrast, Chou expects the company to suffer an 8 percent contraction in net income this year versus last year, because of rising operating costs.
The increase would largely come from the introduction of the high-speed 3G service and more aggressive efforts to retain subscribers to cope with the implementation of phone-number portability in the second half of this year, he said.
Far EasTone plans to allocate NT$1 billion this year for new equipment depreciation expenses and amortization for 3G license fees after it starts offering the data-oriented mobile service, which is scheduled for the second quarter at the earliest.
Far EasTone plans to spend another NT$4.5 billion on new facilities for 3G technologies this year, accounting for half of the firm's total NT$8 billion capital expenditure for this year.
Far EasTone shares jumped 2.47 percent to NT$37.3 on the nation’s over-the-counter market, or Gretai Securities Market (櫃台買賣中心), yesterday, while, shares of Taiwan’s largest phone company Chunghwa Telecom Co (中華電信) fell 0.78 percent to NT$64 on the Taiwan Stock Exchange.
To boost the float of its stocks, Far EasTone yesterday filed an application to the Taiwan Stock Exchange Corp to trade its shares on the nation’s broader equities market, Taiwan Stock Exchange.
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