Credit Suisse Group AG is upbeat on Taiwan’s telecoms as the sector’s “big three” make a concerted effort to raise the threshold price for unlimited 4G subscription plans.
Earlier this month, Chunghwa Telecom Co (CHT, 中華電信), the nation’s largest carrier, announced plans to raise the threshold of its unlimited monthly plans — including subsidized purchase of a new handset — from NT$988 (US$30.6) to NT$1,399.
Raising the threshold for unlimited data plans to shepherd the market is in the direction of adopting tier-pricing and fair usage policies, Chunghwa Telecom told an investors’ conference yesterday.
Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co (遠傳電信) have followed suit by increasing prices for new unlimited subscription contracts, effective next month.
“We view CHT’s new plans as sentimentally positive as the bar for the true unlimited plans has been set higher,” Credit Suisse analyst Varun Ahuja said in a note issued on April 11.
In addition, the price hikes coincide with the beginning of a 4G renewal cycle that is anticipated to begin in the second half of the year, as contracts expire among high-end customers who were early adopters of 4G, Ahuja said.
The big three will continue to offer monthly plans at about NT$999 and NT$1,199, with generous data allowances of 15GB and 25GB respectively. They are also aggressively promoting lower-end 5GB plans priced at about NT$500.
However, Ahuja said pricing is expected to continue improving over the next two to three years.
In the first quarter, Chunghwa Telecom reported a 0.8 percent annual gain in sales to NT$56.89 billion, with net income rising 11.9 percent annually to NT$11.66 billion, or NT$1.5 per share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7.8 percent year-on-year to NT$21.92 billion, the company said.
Taiwan Mobile saw its sales last quarter drop 2 percent annually to NT$29.2 billion. Net income declined 1 percent to NT$3.77 billion (NT$1.39 per share), but EBITDA rose 11 percent to NT$8.4 billion.
Far EasTone’s sales last quarter were NT$23.82 billion, 3.9 percent lower than a year ago, while net income rose 0.5 percent to NT$3 billion (NT$0.92 per share) and EBITDA climbed 4.9 percent to NT$6.85 billion.
In a separate note issued yesterday, Ahuja attributed the strong growth in EBITDA to lower handset subsidies which were a result of tepid response to iPhone 6S.
"We expect the benefit of lower handset subsidies to continue until the first half of 2016" ahead of the launch of the new iPhone, Ahuja said in the note.
Overall, EBITDA growth this year may remain robust due to improving pricing dynamics and lower total subsidies, Ahuja said.
HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) has approved two sustainability-linked loans totaling NT$450 million (US$15.55 million) for Taya Group (大亞集團) and Sinbon Electronics Co (信邦電子), the bank said yesterday, adding that interest rates would fall if the borrowers’ sustainability performance improves. Those marked the first sustainability-linked loans granted by HSBC Taiwan, it said. While HSBC Taiwan has experience providing green loans for the nation’s developers of renewable energy sources to support their projects, the bank began focusing on sustainability-linked loans to meet rising demand from companies in other sectors planning to undertake sustainability programs, it said. “As we reward our clients who reach their
‘NEW TRAVEL MARKET’: The carrier initially planned to lay off about 8,000 people globally, but after government intervention reduced that to 18 percent of its workforce Cathay Pacific Airways Ltd (國泰航空) would cut 6,000 jobs and close its Cathay Dragon brand, the South China Morning Post reported, as part of a strategic review to combat the unprecedented damage caused by the COVID-19 pandemic. The Hong Kong-based airline is expected to officially announce the plan after the market close today, the newspaper said. It initially planned about 8,000 layoffs globally, but after government intervention reduced that to 18 percent of its total workforce, including about 5,000 jobs in Hong Kong, it said. The company, which posted a HK$9.9 billion (US$1.3 billion) loss in the first half, has for months
V-SHAPED RECOVERY: Local tech firms have benefited from strong demand for 5G deployment and electronic devices required for a low-contact economy, CIER said The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for the nation’s GDP growth this year to 1.76 percent, from its previous estimate of 1.33 percent, saying exports and private consumption have staged a V-shaped recovery from the COVID-19 pandemic in the second half of the year. “The upgrade aims to reflect the fast recovery in Taiwan’s exports and domestic demand,” CIER president Chang Chuang-chang (張傳章) told a media briefing. The Taipei-based think tank said the economy might have expanded 2.77 percent last quarter — emerging from a 0.78 percent decline in the second quarter — and would grow
Hon Hai Precision Industry Co (鴻海精密) founder Terry Gou (郭台銘) yesterday said that the company remains committed to its project in Wisconsin, but appeared to condition its completion on the receipt of state incentives, the Wall Street Journal reported. Gou said in a statement that Hon Hai, known as Foxconn Technology Group (富士康科技集團) outside of Taiwan, remains committed to its investment, although “market conditions and the COVID-19 pandemic” have altered the timing of its expansion and the specifics of its manufacturing plans. The company has over the past three years invested US$750 million to transform southeastern Wisconsin into a high-tech
RSS