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 (
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 (
"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.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable