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Far EasTone sees flat revenues for first half of 2007

Far EasTone Telecommunications Co (遠傳電信), the nation's second-largest mobile service provider by revenue, yesterday said that local telecom companies may only post flat revenues in the first half of next year on weakening private consumption.

Taiwan's major mobile carriers are expected to have their first stagnant year in terms of revenues amid a saturated telecom market and less budgets for new services, or handsets, Far EasTone president Jan Nilsson said.

"Domestic consumption came down this year and we believe it will not recover soon," Nilsson said.

As a result, Nilsson said Taiwanese telecom companies may post relatively flat revenues for the first half of next year.

Nilsson made the remarks on the sideline of a press conference unveiling a new rate plan in order to expand market share. The new rate would be 50 percent lower than local competitors marketing similar packages, the company said.

Net income fell 15 percent to NT$6.6 billion (US$203.1 million) in the first six months, from NT$7.8 billion earned a year ago on the back of intense competition, the company said.

Revenues were down 1.2 percent year-on-year to NT$21.6 billion during the same period.

Far Eastone owns about 30 percent of the nation's mobile phone market with 5.53 million mobile subscribers out of the total 18.98 million mobile users as of September, according to government statistics.

Asked about a recent plan by telecom regulator, the National Communications Commission (NCC), to request local mobile operators to lower prices by 4.5 percent a year over the next three-year period, Nilsson said the company was confused about it, as Far EasTone has in recent years been cutting prices at a faster pace.

Average revenue per minute is expected to fall 8.2 percent at annual pace this year, Far EasTone said. The decline was 7.2 percent last year. In the first 10 months, Far EasTone's average revenue per minute was NT$6.99.
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