Mon, Aug 01, 2016 - Page 16 News List

Taiwan Mobile outperforms peers in sales

SERVICES AND SUBSCRIPTIONS:The company reported small increases in subscriber numbers, mobile service revenue and average per-use revenue in the second quarter

By Ted Chen  /  Staff reporter

Taiwan Mobile Corp (台灣大哥大) outperformed its peers in wireless mobile market-driven sales last quarter as players in the sector seek to wean subscribers off unlimited data plans, the company said last week.

Net income grew 4 percent annually to NT$4.12 billion (US$129 million) during the April-to-June period, with revenue remaining flat at NT$28.44 billion, the company said, adding that earnings per share were NT$1.51.

The company managed to increase mobile subscriber numbers, mobile service revenue and average per-use revenue by 0.4 percent, 1.2 percent and 0.6 percent respectively, while its competitors reported declines.

Subscription growth has led to a 5 percent year-on-year rise to NT$7.4 billion in telecom contribution to earnings before interest, taxes, depreciation and amortization, the company said.

Attempts to migrate subscribers to newer data plans has made progress in line with expectations, company president James Cheng (鄭俊卿) told an investors’ conference.

Mobile service revenue grew 1 percent annually to NT$16.6 billion, while blended average revenue per user rose 1 percent to NT$743, company data showed.

“In June, 36 percent of new 4G subscribers had signed up for the NT$1,399 monthly rate contract, while 45 percent signed contracts with monthly rates above NT$1,000,” Cheng said, adding that the carrier is focusing on higher-tiered consumers.

However, the company is not expecting unlimited plans to go away in the near future, Cheng said, adding that he is positive on earnings growth in the second half.

Although device sales fell 9 percent annually to NT$4.63 billion due to a lack of standout products, the company benefited significantly from lower handset subsidy expenses and customer acquisition costs, Cheng said.

Demand for low-to-mid-end handsets is expected to rise in the second half of the year, although Apple Inc’s upcoming iPhone 7 handset is not likely to reverse a slump in interest for flagship models, he said.

This will result in continued costs benefits in the second half, Cheng said. Inc (富邦媒), the carrier’s 51-percent owned television and online shopping affiliate, saw combined sales rise 8 percent annually to NT$6.69 billion. Online shopping sales rose 18 percent annually to NT$4.82 billion, while TV and home shopping sales fell 11 percent to NT$1.87 billion.

The company’s cable TV sales posted a 1 percent annual increase to 1.65 billion, due to rising competition.

“The current level of competition is not financially sustainable and should not persist for long, and I believe some of our rivals are in bad shape,” Cheng said, noting regulators require operators to provide heavy subsidies for set-top boxes in exchange for market access.

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