Wed, Jan 29, 2014 - Page 14 News List

Taiwan Mobile cutting capital expenditures

By Kevin Chen  /  Staff reporter

Taiwan Mobile Co’s (台灣大哥大) capital expenditure will be lower this year than last year, as the nation’s second-largest telecommunications company aims to maintain a stable profitability.

The company yesterday said its board had approved capital expenditure of NT$12.8 billion (US$420.3 million) for this year.

Last year it allocated NT$15.1 billion.


Taiwan Mobile attributed the 15.23 percent decline to its expectation that reductions in 3G expenditure could be larger than increases in 4G spending, according to a presentation document released on the company’s Web site following the company’s quarterly investors conference.

Taiwan Mobile is among six firms that won 4G spectrum licenses through a government-held auction in October last year, with the company acquiring the A4 and C1 frequency blocks for a total of NT$29.01 billion.


The company is one of the first two operators that have received approval from the National Communications Commission to apply for a 4G-network rollout this year, according to the document on the Web site.

Taiwan Mobile yesterday also forecast it would make a net income of NT$3.91 billion this quarter, or earnings per share of NT$1.45.

The forecast represents an increase of 3 percent from NT$3.81 billion, or NT$1.42 per share, made in the first quarter of last year.

“Lower write-off losses and a one-time land disposal gain of NT$0.16 billion will lead to a 3 percent year-on-year increase in EPS to NT$1.45 in the first quarter,” the company said.

The figure is compared to NT$3.55 billion, or NT$1.32 a share, recorded in the fourth quarter of last year.

The slight increase in net income comes as the company aims to maintain its consolidated earnings before income tax, depreciation and amortization (EBITDA) at the same levels recorded a year earlier, while managing to substantially reduce its non-operating expenses.


Taiwan Mobile predicted that its EBITDA would stay flat at NT$7.46 billion this quarter, but that its non-operating expenses would decline by 74 percent to NT$70 million from NT$280 million last year.

“Maintaining EBITDA stability for our telecom operations will be management’s top focus this year,” Taiwan Mobile said in the presentation document.


The company also said it hopes for further profit contributions from its TV shopping business. Taiwan Mobile holds a controlling stake in the nation’s No. 2 TV shopping channel operator, Fubon Multimedia Technology Co (富邦媒體科技), which operates the MoMo TV channel.

“MoMo will be a bright spot with a more than 30 percent increase in EBITDA , aided by forecasted healthy growth in its online shopping business and cost cutting of its other business lines,” Taiwan Mobile said in the presentation document.

“Nonetheless, a depreciation and amortization rise in the wake of the LTE service launch would affect short-term earnings,” the company added. LTE stands for the “long-term evolution,” or 4G, telecom network.

Meanwhile, revenue is forecast to rise by 5 percent year-on-year to NT$27.98 billion in the current quarter, the company said.

That represents a 2-percent decrease from the NT$28.55 billion the company made in the fourth quarter last year.

For this year, Taiwan Mobile expects the mobile industry to continue benefiting from rising smartphone and mobile data adoptions.

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