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.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
New vehicle sales in Taiwan plunged about 37 percent sequentially last month as the long Lunar New Year holiday and 228 Peace Memorial Day holiday cut short the number of working days, along with the lingering uncertainty over import tax cuts on US vehicles, market researcher U-Car said in a report yesterday. New car sales last month totaled 22,043, slumping from 35,073 units in January and down 19.89 percent from 37,515 in February last year, U-Car data showed. Sales of imported luxury cars, led by Mercedes-Benz, plummeted about 45 percent to 3,109 units last month from 5,663 units in the previous month,
RSS