Far EasTone Telecommunications Co (遠傳電信), the nation’s third-largest telecom operator, said yesterday it could maintain capital spending next year and focus on expanding its next-generation network for future growth, adding that the economic slowdown seemed to have had less of an impact on the telecoms industry.
In contrast to a sharp reduction in spending or job cuts in the global manufacturing and financial sectors, Far EasTone and industry rival Chunghwa Telecom Co (中華電信) said they did not plan to drastically lower spending on new equipment next year, citing the milder impact of the economic slowdown.
“Every company is cutting costs in leaner times. We are cutting cost too, but we need to invest on next-generation networks for future growth,” New Century InfoComm Tech Co (NCIC, 新世紀資通) president Jeffey Gee (紀竹律) said.
“Overall, capital spending next year could be similar to this year’s,” Gee said. “We will continue to invest [on building infrastructure].”
NCIC is a fixed-line arm of Far EasTone.
“The [adverse] impact on the telecoms industry is relatively milder than in the financial and manufacturing sectors. Our customers still need to do business and communicate [via phones],” Gee said.
Far EasTone, NCIC and Internet service provider Digital United Inc (數位聯合), a Far EasTone affiliate, intend to spend NT$10 billion (US$300.7 million) in total on new equipment this year, Gee said.
Next year, the telecom companies intend to spend a large portion of the amount on expanding 3.5-generation (3.5G) networks in the mobile area, Gee said.
In the fixed-line area, the company said it would invest as much as NT$2 billion on high-speed next-generation network (NGN) deployment in the fixed-line area after spending NT$17 billion upgrading the infrastructure over the past seven years, he said.
The telecom companies also intended to make the first major investment on the new WiMAX network next year, he said.
Far EasTone won one of the six WiMAX licenses the government issued in summer last year to offer next-generation mobile services for users in the south.
NCIC debuted its Internet phone services for local customers, aiming to gain a share of the fixed-line market from Chunghwa Telecom, which dominates the sector.
The economic slowdown, which may have driven the nation’s economic growth into negative territory last quarter for the first time since 2001, has changed customers habits, with many putting off purchasing replacement handsets.
“Sales of high-end models are dropping because of the economic recession,” said Cliff Lai (賴弦五), chief operating officer at Taiwan Mobile Co (台灣大哥大), the nation’s second-biggest telecom carrier.
However, Taiwan Mobile had no plan to cut down handset purchase volume this year, Lai said. The telecom company has said it would buy 1.2 million cellphones this year for its service packages.
“People are postponing replacing their old phones,” said Dick Chang (張永鴻), general manager of local handset retail chain Synnex Technology International Corp (聯強國際).
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