Chunghwa Telecom looks to Asia

Chunghwa Telecom Co (中華電信) is looking for investment opportunities in Southeast Asia, including Thailand, but the potential deals won't likely be in the form of a merger or acquisition, the company's chairman and chief executive said.

"We are interested in [investing in] the overseas market, but [the investment] may not be through a [merger or acquisition]," Hochen Tan (賀陳旦) told Dow Jones Newswires in a recent interview. "[In addition to] Thailand, other Southeast Asian countries are our primary targets."

Hochen declined to provide further details on the other markets Chunghwa was examining.

Chunghwa Telecom, the nation's top phone company, has already expanded its business outside of Taiwan by offering broadband Internet connection service to Taiwanese businesspeople in Vietnam, Hochen said late last year.

He said at the time that the company had no plans to acquire Vietnamese telecom companies, but was certainly looking to grow its revenue base overseas, as it faced a domestic telecom market that was almost saturated.

Mobile phone sales are expected to post 4 percent growth to 6.9 million units this year from last year in Taiwan, according to a forecast by the Taipei-based market researcher Market Intelligence Center (市場情報中心). Meanwhile, around 11.62 million people in Taiwan, or 59.93 percent of the nation's total population, had broadband Internet access as of January, the Taiwan Network Information Center (TWNIC) reported last month.

Chunghwa said earlier it aims to expand its broadband Internet operations into Thailand.

"I think what we need most is experience in international operations, not only in telecom services, but also in international investment," the chief executive said.

Hochen said the company already had a cooperation agreement with Thailand's TOT Corp to help support the rollout of ADSL (asymmetric digital subscriber line) Internet services.

"That is the starting point for us -- to work with TOT," he said.

Hochen said that in line with the company's strategy to expand into the overseas market, Chunghwa Telecom wouldn't limit itself to acquiring a financial stake in a company, but would also look to expand its business by providing system support.

In Taiwan, the company planned to focus on generating higher revenue by offering third-generation (3G) mobile phone services, he said.

Chunghwa Telecom said earlier this year that its 3G subscribers would jump to 1 million by the end of this year, up from the current 313,000. At the end of last month, the company's total subscriber base was 8.19 million.

Chunghwa Telecom remained committed to a longer term plan to reduce its work force, Hochen said.

Earlier this month, the company offered a new retirement program in a bid to rejuvenate its work force and boost efficiency. The latest early retirement offering is the sixth program the company has offered since 2001, but its first program after it was privatized in August last year. The latest program will run until the end of the month, targeting employees 47 years old and up.

Chunghwa Telecom had a tentative plan to reduce its staff by about 3,000 over three years, he said. Chunghwa Telecom has cut around 20 percent of its workforce in the past few years and has seen the number of employees drop from 35,000 to 27,500.

The company expects to save about NT$4.5 billion (US$137 million) through the work force reduction.