Taiwan Mobile Co (台灣大哥大) said its capital expenditure (capex) for this year will increase by 13.4 percent from its previous estimate, as the nation’s second-largest telecommunications company expects further profit contributions from its TV shopping business.
The company yesterday said its board had approved capital expenditure of NT$15.4 billion (US$512.7 million) for this year, compared with its previously projected spending of NT$13.58 billion.
Last year, the company allocated NT$15.1 billion for capital expenditure.
“The board today approved an additional NT$1.82 billion capex budget for 2014, mainly to reflect MoMo’s investment of its logistics and warehousing center,” Taiwan Mobile said in a presentation document released on the company’s Web site following its quarterly investors’ conference.
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.
Overall, Taiwan Mobile plans to spend NT$9.8 billion on mobile business, NT$2.1 billion on fixed-line business, NT$1 billion for cable TV and NT$2.5 billion for MoMo and other subsidiaries, the company said in the presentation document.
Taiwan Mobile has gained approval from the National Communications Commission (NCC) to introduce its 4G telecom network since June and is positioned itself to capture the business upside of the long-term evolution (LTE) services.
The company yesterday said it is scheduled to launch its 4G LTE service using the 1,800MHz frequency bands by the end of September, after the company earlier this month gave back 5MHz in the 2G spectrum to the commission and swapped some 1,800MHz bands with Far EasTone Telecommunications Co (遠傳電信).
“Acceleration in the deployment of the 4G network, the growing number and greater variety of LTE devices and the earlier-than-expected availability of the 1,800MHz LTE spectrum will propel customers’ migration to 4G services,” the Web site document said.
For this quarter, Taiwan Mobile forecast it would make a net income of NT$3.44 billion, or earnings per share of NT$1.28.
The forecast represents a decline of 19 percent from NT$4.27 billion, or NT$1.58 per share, made in the third quarter of last year. It is also compared with NT$4.14 billion, or NT$1.54 a share, recorded in the second quarter this year.
Revenue for this quarter is predicted to increase by about 5 percent year-on-year and quarter-on-quarter to NT$28.3 billion due to growth in both handset sales and MoMo revenue, the company said.
The projected decline in net income for this quarter reflects a drop in the company’s telecom business earnings amid higher 4G-related spending during the early stage of its 4G service launch.
As a result, Taiwan Mobile predicted that its earnings before income tax, depreciation and amortization (EBITDA) would decline 2 percent year-on-year to NT$7.89 billion this quarter, with non-operating expenses likely rising by 115 percent to NT$620 million from NT$290 million last year.
The company’s board yesterday approved up to a US$500 million euro convertible bond issue plan. Investors can convert the zero-yield securities after the bonds mature five years later for Taiwan Mobile shares at a premium of between 20 percent and 32.5 percent, the company said.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Nano-X Imaging Ltd, a start-up founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc to build a machine that could disrupt a century-old X-ray industry. Valued at about US$2 billion after listing on the NASDAQ last month, Nano-X is seeking to transform a multibillion-dollar industry that has essentially relied on the same technology since Nobel Prize in Physics winner Wilhelm Roentgen discovered X-rays in the late 19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays. The backing of SK Hynix, the world’s second-largest maker of memory chips, is a boost for
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into