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Chunghwa Telecom details its plans

Models demonstrate Chunghwa Telecom's new MOD (multimedia on demand) digital-TV service yesterday to mark its nationwide launch. PHOTO: LIAO CHEN-HUI, TAIPEI TIMES

Chunghwa Telecom Co (中華電信) vows to utilize its privatized status to further expand its scope of business, streamline company structure and tap into overseas markets in the long run, company chairman Hochen Tan (賀陳旦) said yesterday.

This is the first time Hochen detailed the company's operational changes and vision for the future, after the nation's largest telecommunications service provider successfully released a 17 percent stake originally owned by the government to both local and overseas investors last week, taking the government's shareholding in the company to under 50 percent.

"Now Chunghwa can enjoy more operational flexibility as company budgets need not be constrained by the Procurement Act (採購法) and legislative oversight," he said.

Some lawmakers criticized the privatization move and said Chunghwa will eventually fall into the hands of business conglomerates following several rounds of share sales, but Hochen refuted such claims as nonsense.

"Cathay Financial Holding Co's (國泰金控) shareholding in Chunghwa has dropped from the original 6.75 percent to 3.9 percent. The combined stake of Fubon Financial Holding Co (富邦金控) and its subsidiary Taiwan Mobile Co (台灣大哥大) has also shrunk by one-third to the current 2 percent. The theory that the company is being controlled by conglomerates is ridiculous," he said.

To boost operational efficiency and reduce personnel costs, the company plans to encourage 3,000 employees to take up an offer of early preferential retirement -- including 875 employees who quit last week following the company's privatization -- over the next three years.

Hochen said the job cuts will enable the company to streamline its organizational headcount to 25,000 while allowing it to recruit more management professionals.

"We have already been a vigorous company but now we can jump even higher," Hochen said, reiterating his confidence that employees' mindsets have been well adjusted to brace for stiff competition from other telecom players.

The newly privatized entity is now working on developing digital-content applications, such as MOD services, to serve local consumers. Chunghwa also plans to develop its terminal-equipment business and enter overseas markets to offer services for Taiwanese businesspeople abroad, Hochen said, without elaborating.

But he stressed that the company would have to nurture professionals specializing in international law and management before making the giant step.

"Now we would first strengthen our ability to provide telecom services for Taiwanese businesspeople" in China and other countries, he said.

Hochen said expanding into overseas markets will be the company's long-term goal. But no timetable has been finalized, considering the relatively higher operational risks and environmental uncertainties this would bring.

However, Chunghwa would start forging strategic alliances with international telecom companies, such as Japan's NTT DoCoMo, South Korea's Korea Telecom and Hong Kong's PCCW Ltd to offer better-quality cross-country services, he said.
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