Sat, Sep 09, 2006 - Page 12 News List

Vibo sticks by plan, despite losses

STILL OPTIMISTIC The telecom company said that it still thought it could turn a profit by next September, despite losses of NT$4.75 billion and few subscribers


Vibo Telecom Inc (威寶電信), the nation's smallest mobile telecom operator, yesterday said it would stand by its original timeline that it will begin turning a profit next September, despite running up losses on disappointing subscription for its third-generation (3G) service.

The remarks came after the nation's second pure 3G service provider cut its forecast for subscriber growth for this year by 25 percent to around 750,000 users, from a previous target of 1 million.

"Though 3G subscriptions, in general, are growing at a slower pace than we thought, we are not planning to make any further adjustment to our original plans now," Vibo president David Wang (王柏堂) told reporters on the sidelines of a press conference unveiling a new service package.

Vibo still hopes to start making money in September next year, Wang said. Vibo had said that it aimed to become profitable within 21 months following its launch last December.

Vibo does not plan to cut the target for the growth of new subscribers, either, Wang said. The company has 300,000 subscribers.

"I'll give Vibo a `thumbs up' if the company can hit the goal of starting to make money next year," said Lu Chia-lin (呂家霖), a telecom industry analyst at Yuanta Core Pacific Securities (元大京華證券).

"Intensifying competition and a high mobile penetration rate in Taiwan will make it more difficult for telecom entrants to make profit," Lu said. "It will be a challenge for Vibo to make money next year."

The nation's top phone company, Chunghwa Telecom Co (中華電信), began to make money within two or three years after it was established, Lu said. By comparison, it would be impressive for new players to swing into the black within five years in such a saturated and fiercely competitive Taiwanese market, he added.

Vibo posted a loss of NT$2.58 billion (US$79 million) for the first six months of the year, compared to losses of NT$354 million a year ago, according to the company's filing to the Taiwan Stock Exchange Corp.

That brought the accumulated loss to NT$4.75 billion over the past years since the telecom company's establishment in 2002.

Taiwanese notebook maker Compal Electronics Inc (仁寶電腦), one of Vibo's major shareholders, told reporters earlier this month that it expected Vibo to post losses of between NT$5 billion and NT$6 billion for the full year this year.

Despite the widening loss, Vibo's Wang said that the company did not plan to raise funds by selling new shares by the second half of next year.

"We still have sufficient capital at hand to finance operations," Wang said.

Vibo has NT$15 billion in initial capital and a combine NT$14.2 billion of long-term and short-term bank loans, according to Wang.

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