Chunghwa buys into content provider

Chunghwa Telecom Co (中華電信), the nation's top telecom operator, yesterday said it has acquired a major stake in a local content aggregator to strengthen its online video services.

Chunghwa Telecom obtained a 21-percent stake, or 2.59 million shares, in Elta Technology Co Ltd (愛爾達科技) by subscribing to the firm's rights issue, the telecom company said in a statement.

Elta delivers digital content, including sports games such as the Major League Baseball Games, to Chunghwa Telecom's mobile users and Internet TV subscribers as well as other mobile carriers.

After the share offering last week, Elta increased its outstanding shares to 12.25 million from 9.5 million shares. Chunghwa Telecom also acquired a seat in Elta's five-member board.

"The investment is part of Chunghwa Telecom's strategy to integrate its video business and provide richer video services," Chunghwa Telecom said in the statement, adding that was riding on the growing demand for online digital video.

The deal would also help the telecom firm better manage its video content, the statement said.

Elta also welcomed the investment, with Elta chairman Sally Chen saying the deal should "strengthen our partnership with Chunghwa Telecom."

Chunghwa Telecom did not reveal the financial details of the Elta shareholding purchase. The deal was Chunghwa Telecom's fifth investment in telecom-related areas over the past year.

In early January, Chunghwa Telecom bought a 32-percent shareholding in Senao International Co (神腦國際), the second-largest domestic handset retailer, for NT$1.06 billion in line with its goal of boosting third-generation (3G) subscription.

The telecom company, which had about NT$70.67 billion in cash and equivalent as of the end of last year, said it is looking for suitable investment targets as part of its efforts to better utilize capital as well as reduce cost.

Separately, Chunghwa Telecom denied a report by the Chinese-language daily Commercial Times yesterday that it plans to invest tens of millions of US dollars in Vietnam's top mobile operator, Vietnam Mobile Telecom Services Co.

"Chunghwa Telecom is evaluating the feasibility of expanding into overseas markets, but we have not made any substantial progress yet," the company said in a filing with the Taiwan Stock Exchange.

The company also said it had not yet reached an agreement with Yang Ming Marine Transport Corp (陽明海運) on plans to jointly invest in Vietnam's property market or telecom infrastructure, it said in a separate filing.

The statement came in the wake of a Commercial Times report that the company was scheduled to sign an agreement with Yang Ming next month to jointly expand business overseas.