Chunghwa reports 10% drop in profit

Chunghwa Telecom Co (中華電信), the nation's largest provider of telephone services, yesterday reported a 10 percent drop in first-quarter profit because of declining sales from fixed-line and mobile-phone services.

Net income was NT$11.6 billion (US$367 million), the company said in a statement, citing unaudited figures. That compares with a NT$12.9 billion profit a year earlier. Sales fell to NT$44 billion from NT$45 billion.

Chunghwa and rivals such as Taiwan Cellular Corp (台灣大哥大) face declining users in a market that has 21.4 million mobile-phone subscribers and a population of 22.6 million. The cellphone companies are looking to the introduction of so-called third-generation services for growth.

"The market is stagnant and growth momentum will only be back with the introduction of third-generation mobile services," said Kevin Yang (楊師銘), vice president of International Investment Trust Co (國際投信).

The mobile-phone operators have said they may this year offer 3G services. Still, the services may take years to begin contributing significantly to sales and profit, Taiwan Cellular has said.

Chunghwa Telecom said March sales fell 6.5 percent to NT$13.9 billion from a year earlier. Revenue in February was NT$14.8 billion.

Taiwan Cellular, the nation's third-largest mobile-phone operator, had a 17 percent decline in first-quarter profit.