Taiwan Mobile Co (台灣大哥大), the nation’s second-biggest telecom operator, expects mobile revenues to trend downward this year mainly because of a proposed 5.87 percent cut on voice tariffs by the telecom industry regulator, a company executive said yesterday.
Mobile business is the company’s major revenue source, accounting for about 80 percent of its total revenue of NT$68.48 billion (US$2.1 billion) last year.
“This year, the biggest uncertainty facing the telecom industry is the adjustment of the X [variable in calculating telecom tariffs],” chief operating officer Cliff Lai (賴弦五) said.
“We expect data services to see strong growth this year, but it will not be able to offset the price erosion,” he said.
The National Communications Commission (NCC) proposed early this year revising the variable in the pricing formula, which the commission uses to gauge whether charges by local telecom carriers are reasonable.
That change will lead to an annual reduction of 5.87 percent for mobile voice charges and 5.69 percent for broadband Internet access fees over a three-year period beginning in April.
“We have originally expected our mobile revenues to resume growth this year, or next year. It looks unlikely now as a consequence of the [price] adjustment,” Lai said. “Mobile revenues may slide again this year.”
Taiwan Mobile reported a 6.47 percent drop in mobile revenues to NT$53.9 billion last year, compared with NT$58.25 billion in 2008, outpacing the 1.2 percent drop in overall revenues, based on financial statements posted on the company’s Web site.
Despite the big challenge to minimize price erosion, Taiwan Mobile said it would stick to its original marketing strategy to spur growth.
The company aims to increase handset purchase by 18 percent to about 1.3 million units this year from 1.1 million units last year, in an effort to lure new users and retain existing subscribers.
The telecom operator also hopes to raise the percentage of smartphone to 18 percent of total handset purchase, from 10 percent last year, as smartphone users pay much higher monthly fees and help boost data services.
It added that it would start selling Apple Inc’s iPhone next month.
Far EasTone Telecommunications Co (遠傳電信), the nation’s No. 3 telecom company, said yesterday that smartphones would account for 20 percent to 30 percent of its total handset purchases this year.
Shares of Taiwan Mobile slid 0.33 percent to NT$59.60, outpacing the benchmark TAIEX, which dropped 0.89 percent yesterday. Far EasTone was flat at NT$37.60 and Chunghwa Telecom Co (中華電信) dropped 1 percent to NT$59.40.
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