Far EasTone Telecommunications Co (FET, 遠傳電信) on Tuesday reported higher-than-expected net profit for the first three quarters of this year, boosted by the contribution of its 4G business.
Taiwan’s No. 3 telecommunications operator is the only telecom operator in the nation to have adjusted its subscription fees since the launch of 4G services in June — by eliminating a NT$199 to NT$299 monthly level plan, while adding a NT$799 monthly plan with 3.5 gigabyte data usage.
However, the company reported an annual decline of 5.3 percent in earnings before income tax, depreciation and amortization (EBITDA) last quarter, mainly due to rising handset subsidies, especially after Apple Inc’s new iPhone products hit the local market on Sept. 26.
Shares in Far EasTone rose 3.51 percent in Taipei trading yesterday, compared with the broader market’s 1.48 percent increase, as investors welcomed the company’s positive outlook for the near term and its leading position in the 4G market, despite subsidy-led weakness in the past quarter.
Net profit reached NT$9.44 billion (US$310.8 million) from January to last month, 10 percent higher than the company’s forecast of NT$8.58 billion, Far EasTone president Yvonne Li (李彬) told investors during an investors’ conference call yesterday.
That represents a 4 percent annual growth rate from NT$9.1 billion in the same period of last year, according to the company’s financial statement.
The company had about 410,000 4G subscribers as of the end of last month, accounting for 35.07 percent of the nation’s total 1.17 million 4G users, Li said.
From its existing customer base, the company has seen an increase of between 6 percent and 10 percent in average revenue per user (ARPU) for average customers who migrate from 3G to 4G networks, she said.
As the firm reported 1.4 percent year-on-year improvement of ARPU last month, the revised 4G tariffs have started to contribute to its revenue growth, boosting the firm’s cumulative revenue for the first three quarters up 5 percent to NT$23.25 billion from a year earlier, she said.
Far EasTone’s local market share rose to 28.3 percent last quarter, up from 27.6 percent the previous year, Li said, mainly by gaining shares from Vibo Telecom (威寶電信) and Asia Pacific Telecom Co’s (亞太電信).
The company is confident that it will achieve its profit target of NT$3.35 per share this year, and its dividend payout ratio next year will be more than 100 percent, Li said.
The company also looks to complete its 4G roll-out on 700 megahertz (MHz) covering more than 95 percent of the nation’s population by the end of this year, before rolling out 4G services on 1,800MHz next year, she said.
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