Far EasTone denies rumors of wireless service acquisition

Far EasTone Telecommunications Co (遠傳電信), the nation's second-biggest mobile service provider, yesterday downplayed speculation that it would soon announce the acquisition of a local wireless service provider.

Local newspapers, including the Commercial Times, reported at the weekend that Far EasTone was seeking to bolster its falling revenues by buying a controlling stake in Q-ware Systems and Services Corp (安源資訊).

The telecom company was planning to unveil the deal later this month, the report said.

In response, Far EasTone yesterday said it "will continue to evaluate any investment proposals that could be helpful to the wireless business and investors' return on equity," a statement submitted to the Taiwan Stock Exchange said.

Q-ware Systems and Services, 70 percent owned by Uni-President Enterprises Corp (統一企業) and 7-Eleven operator President Chain Store Corp (統一超商), operates the Wifly Internet access service in Taipei.

Q-ware Systems and Services have NT$844.56 million (US$25.57 million) in paid-in capital and 200 employees, information from the Ministry of Economic Affairs and the company's Web site showed.

The acquisition would help Far EasTone boost its subscriber base and bolster revenues that have fallen as a result of a sharp decline in pre-paid card subscribers stemming from President Chain Store's offer of a mobile phone service using rented bandwidth.

The convenience store operator sought approval to follow in Aurora Telecom Corp's (震旦電信) footsteps and enter the nation's new mobile virtual network operator (MVNO) market.

As of last November, Far EasTone still held about a third of the nation's mobile market, with 5.43 million subscribers.

Far EasTone said pre-tax income reached NT$16.13 billion last year on NT$67.23 billion revenues, a 9.68 percent decrease in pre-tax income and a 6.5 percent decline in revenues year-on-year.

Far EasTone shares have climbed nearly 3 percent this year, closing at NT$38 yesterday.