Chunghwa Telecom Co (中華電信), the nation’s largest telecom, yesterday said its 4G business is expected to turn profitable next year, three years after its launch, as a fast-growing subscribers list helps offset heavy investment on infrastructure and expensive license fees.
Chunghwa’s 4G business is to take about half the time it took to recover investment costs on its 3G business.
The company said when it launched 3G services in 2005, it was difficult to make revenue from 3G services as the uptake was slow amid the lack of 3G-enabled handsets and applications.
Photo: CNA
However, the situation is changing, the company said.
The company has accumulated 5 million 4G subscribers in just one-and-half-years since its launch in May 2014, supported by the sufficient availability of 4G mobile phones and rising data transmission, it added.
In the middle of this year, Chunghwa’s 4G business is likely to break even in terms of earnings before interest, taxes, depreciation and amortization, chairman Rick Tsai (蔡力行) told reporters on the sidelines of the launch of the company’s new 4G services on its newly acquired 2,600 megahertz (MHz) band.
“We will start making profits [from the 4G business] next year,” Tsai said, citing the continuing growth in subscriber and appropriate investments.
“Since we launched [4G] services in 2014, we have made better progress than we thought,” he said.
This year, Chunghwa plans to add 2 million new 4G users, Tsai said, adding that this is a conservative forecast.
The company has invested NT$49.03 billion (US$1.5 billion) in bidding for 4G bandwidth. The company plans to spend 22.4 percent more on capital spending to NT$30.5 billion this year, compared with NT$25 billion last year.
Chunghwa is the first telecom in Taiwan offering 4G services on the ultra-high-speed 2,600 MHz band.
Far EasTone Telecommunications Co (遠傳電信) is scheduled to launch its service on the 2,600MHz band next quarter.
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