Chunghwa Telecom cuts growth outlook for TV subscriptions

A lack of television content has prompted Chunghwa Telecom Co (中華電信), the nation's top telecoms company, to trim its growth forecast for the number of Internet television subscribers this year, a company official said yesterday.

The telecoms carrier had a rough start last March in delivering television programs on its broadband network, which is similar to the service offered by Hong Kong-based PCCW Ltd.

Chunghwa Telecom last year garnered about 100,000 subscribers for its Internet-protocol TV (IPTV) service after overcoming various difficulties, including government objections about the minimum charges and insufficient supply of set-top boxes which switch between analogue and digital signals.

Practical strategy

"We've got to be more practical now," John Hsueh (薛紀建), a vice president of Chunghwa Telecom, said yesterday.

Hsueh said the company hopes to increase its subscriber base to around 300,000 by the end of the year, which is seen a break-even point for the telecom company, down from its previous target of 500,000 subscribers.

Chunghwa Telecom has spent more than NT$2 billion (US$61.48 million) on purchases of set-top boxes for its subscribers since last year. The outlay made up about 80 percent of the company's total investment in the new IPTV business, Hsueh said.

Early this month, Chunghwa Telecom, which controls one-third of the nation's cellphone market, posted net income of NT$10 billion for the first quarter of this year, down 14 percent from NT$11.63 billion in the same period last year.

Content matters

"It is not easy to expand our customer base, as content really matters," Hsueh said.

Subscribers to Chunghwa Telecom's IPTV service have a selection of only 30 channels, compared with the more than 100 channels offered by cable TV operators.

"We plan to increase users' choices, especially in terms of the multimedia-on-demand service," Hsueh said.

However, Chunghwa Telecom seems to have slowed its content acquisition drive after cable operators filed a complaint to the nation's media regulator questioning the legitimacy of Chunghwa Telecom's entry into the television market. The regulator is yet to make a ruling.

"We are offering the TV service in compliance with the law," Hsueh said yesterday.

Chunghwa Telecom had planned to break into the red-hot TV shopping sector sometime this year, but Hsueh said that there was no rush to offer the service.

"Expanding the customer base is our priority," he said.

Shares in Chunghwa Telecom inched up 0.17 percent to NT$60 on the Taiwan Stock Exchange yesterday.