Chunghwa Telecom unveils plans to boost 3G revenues

Chunghwa Telecom Co (中華電信), the nation's biggest telecom operator, yesterday said it aimed to increase third-generation (3G) subscriptions by 50 percent this year by offering free handsets and lower-priced phones in a bid to boost revenues.

The company's stock advanced 5.08 percent to NT$68.2 after Chunghwa Telecom resumed trading its shares on the main bourse, compared with a 1.53-percent rise in the benchmark TAIEX. The company suspended share trading on Dec. 29 to cope with a 9 percent capital reduction plan.

Chunghwa Telecom hopes to increase its number of 3G subscribers to 3.5 million from 2.3 million at the end of last year, with the nation's 3G market expected to take off this year after mobile phone vendors launched more affordable 3G handsets, company spokesman Shih Mu-piao (石木標) said by phone.

The number of 3G users in Taiwan may grow by 54 percent to around 10 million this year from 6.5 million last year, Shih said.

"We are offering several packages to encourage phone users to switch their 2G service to 3G with similar voice fees coupled with higher data transmission rates," Shih said. "The expansion in the number of 3G users will help boost Chunghwa Telecom's revenues this year, as 3G users have a higher average revenue per user."

Chunghwa Telecom said its 3G average revenue per user stood at NT$1,100, 57 percent higher than the NT$700 for 2G subscribers.

Chunghwa Telecom said revenue rose 1.7 percent to NT$170.76 billion in the first 11 months of last year.

The company has a total of 8.7 million subscribers, taking up 37 percent of the local mobile market.

Starting next month, Chunghwa Telecom will be offering three free handsets from Samsung, Nokia and an unspecified brand with a new number and a 24-month contract at a minimum monthly charge of NT$383.

That would make Chunghwa Telecom the first major telecom player in Taiwan offering free 3G handsets.

Smaller rival Vibo Telecom Inc (威寶電信) has been using this approach to lure subscribers from competitors since starting commercial operation in December 2005.

"We believe our rivals will follow suit," Shih said.

The phone company planned to increase handset purchases by 23 percent to 2.8 million units this year, from 2.2 million units last year, with 3G phones to account for 60 percent of this year's purchases, Shih said.