Chunghwa Telecom Co (中華電信), the nation’s largest phone company, is in talks with China’s three biggest carriers to sell wireless applications in China to expand outside a Taiwanese market in which growth has stalled.
Chunghwa aims to offer value-added services such as stock information and electronic-book downloads in the world’s biggest phone market, company chairman Lu Shyue-ching (呂學錦) said.
China will be “the focal point for development for years to come, maybe decades,” Lu, 60, said in an interview on Wednesday. “China has the scale, and is still growing. The Taiwan market is saturated.”
An agreement would depend on Taiwan further relaxing restrictions on its companies doing business in China. In June, Taiwan opened 100 industries and projects to Chinese investment while keeping telecommunications among the sectors that retain restrictions, along with semiconductors and flat-panel displays.
Lu declined to estimate a timeframe for an agreement, or say whether Chunghwa Telecom may seek a stake in a Chinese phone company once regulations permit.
Chunghwa, 36 percent-owned by the government, hopes to extend services such as real-time stock prices and fortune-telling to China as carriers there move to introduce so-called smartphones and faster mobile services.
“We have experience in value-added services, and it would be an extension of our domestic efforts,” Lu said.
The company had revenue of NT$186.8 billion (US$5.8 billion) last year, little changed from NT$186.3 billion in 2007. In July, the company forecast a 1.8 percent decline in third-quarter sales.
China, where 41.6 percent of the nation’s 1.3 billion people have a mobile phone, is already providing a source of growth for the former Taiwanese state-owned monopoly.
Voice traffic between China and Taiwan has risen to a third of Chunghwa’s international total from zero two decades ago, and may exceed 50 percent in five to 10 years, Lu said.
Chunghwa also plans to expand into emerging markets including Vietnam and Thailand, where fewer people have mobile phones.
The company formed a US$30 million venture last year with state-owned Vietnam Military Telecommunications Corp, Vietnam’s largest mobile-phone company by subscribers, to provide data-storage services.
The venture, 30 percent owned by Chunghwa, is set to make a profit next year, Lu said.
Lu said the company plans to form a venture in Thailand to provide energy-saving solutions through Internet networks.
The investment was put on hold last year because of the financial crisis, Lu said. It will resume the project when the global economy recovers, he said.
“International acquisitions at this moment have to be very, very cautious,” Lu said. “It really depends on the global economy and the confidence on the market.”
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