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Vibo to resume 3G handset subsidies

"Vibo will focus on boosting subscribers and revenues this year."

Chang Feng-hsiung, Vibo president

Vibo Telecom Co (威寶電信), the third-generation (3G) mobile service provider, plans to resume handset subsidies this year to expand its subscriber base, aiming to hit its target to break even this year, a company executive said yesterday.

"Vibo will focus on boosting subscribers and revenues this year," Vibo president Chang Feng-hsiung (張豐雄) said.

Chang took up his new post about two weeks ago after leaving the nation's top telecoms firm, Chunghwa Telecom Co (中華電信), where he worked for the last two decades in a variety of capacities, including mapping marketing strategies.

Vibo aims to acquire 600,000 new sign-ups this year, to add to its existing 600,000 users, Chang said.

If Vibo could expand its customer base fast enough, it would help end the firm's struggle to make the books meet earlier, Chang said. But it would be "quite challenging" to achieve the goal of breaking even in August, he said.

To lure new subscribers away from rivals in the nation's saturated telecoms market, it is common for operators to offer free or NT$1 handsets.

"We should adopt the approach [handset subsidies] this year to speed up growth," Chang said.

As part of the handset subsidy project, Vibo plans to spend approximately NT$3 billion buying up to half a million mobile phones this year for its new sign-ups, Chang said.

The firm plans to buy mobile phones from local brands, such as Giga-Byte Communications Inc (集嘉通訊), as well as from overseas vendors, he said.

The decision came as prices for 3G phones are expected to fall sharply this year, which "will be a cost-saving for Vibo," Chang said.

A high-end 3G mobile phone is expected to fall 20 percent to US$400 per unit this year from US$500 last year, he said.

As Vibo had limited leeway with its budget when compared to the major players, it had abandoned giving lavish handset subsidies.

Instead, the phone company tried to promote its services by deducting voice call fees from handset charges last year.

"Pricing is also an important strategy," Chang said.

He declined to comment on whether Vibo would cut rates to win subscribers.

Chang said the company had not ruled out the possibility of issuing new shares to raise funds for building more base stations. Vibo raised NT$6 billion last year to write off accumulated losses.
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