Taiwan Mobile Co (台灣大哥大) said that it would focus on quality and subscriber retention after rivals lowered the prices of unlimited mobile data plans from NT$1,399 (US$44.22) per month to as low as NT$499.
“The reality of the competitive environment is that unlimited data plans are not going away any time soon, and the threshold will only trend lower,” Taiwan Mobile president James Jeng (鄭俊卿) told an investors’ conference.
While rival carriers’ rock-bottom prices might yield them short-term gains, they are destructive in the long run, as subscribers tend to switch carriers when incentives from aggressive promotional campaigns expire, Jeng said.
Lower prices would also limit the amount of commission payments and handset subsidies carrier can extend to their channel partners and subscribers, Jeng said.
“At the end of the day, what matters is maintaining a low turnover rate for subscribers,” he said.
In the first three quarters of this year, the company’s total subscriber count dipped 0.4 percent annually, compared with a 1.2 percent drop for Far EasTone Telecommunications Co (遠傳電信) and a 3.8 percent drop for Chunghwa Telecom Co (中華電信), Jeng said.
Jeng said that among Taiwan Mobile’s new subscribers in the past two months, more than 51 percent signed for unlimited data plans priced at more than NT$1,000, while overall subscriber retention was 50 percent.
The focus on higher quality has led to a 1 percent gain in average revenue per user in the first nine months of the year, while the same metric dropped 0.1 percent and 1.2 percent for Chunghwa and Far EasTone respectively, he said.
Jeng said Taiwan Mobile is on track to meet its earnings guidance for this year, backed by a solid mobile spectrum and network investment strategy and a disciplined handset subsidy policy.
The company’s net profit in the third quarter fell 4 percent annually to NT$3.99 billion, with sales rising 3 percent to NT$28.45 billion.
In the first nine months, profit totaled NT$11.88 billion, or earnings per share of NT$4.36, topping Chunghwa’s NT$4.17 and Far EasTone’s NT$2.83.
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