Mon, Oct 23, 2017 - Page 16 News List

Chunghwa ends 13 years of losses on MOD service

SLOW START:Subscribers of the TV-on-demand service surpassed 1.5 million this month and the firm hopes to reach 2 million by next year, to recoup NT$31.5bn in losses

By Lisa Wang  /  Staff Reporter

Chunghwa Telecom Co (CHT, 中華電信) on Friday said its online TV business reached the break-even point this month because of significant subscriber gains, ending 13 years of losses.

The nation’s largest telecom has been struggling to eke out a profit from its pay TV business, branded Multimedia-on-Demand (MOD), due to snail-paced growth in the number of subscribers amid a lack of appealing content and fierce competition from local cable system operators.

Chunghwa Telecom has booked cumulative losses of NT$31.5 billion (US$1.04 billion) on the MOD service since its launch in 2004 and chairman David Cheng (鄭優) has made it a priority to turn around the money-losing pay TV business since taking the reins in December last year.

In July, the company agreed on a new profit-sharing scheme with major content operators — Taiwan Interactive Television Co (台灣互動電視), U-Light Entertainment Technology Co Ltd (友量娛樂) and Chunghwa Digico Media Co Ltd (中華超聯) — for their programs aired on the MOD platform.

Since August, the company has seen a net gain of 105,000 MOD users, Cheng said on the sidelines of a product launch in Taipei.

That brought the total number of MOD subscribers to 1.5 million, up about 13 percent from 1.33 million at the end of last year. The company aims to have 2 million MOD subscribers by the end of this year.

“This is substantial growth, indicating that consumers are backing [the company’s advocacy of] the right to choose content,” Cheng said. “There is still room for us to enrich the content delivered on MOD.”

Chunghwa Telecom last month closed an exclusive deal with Fox Networks Group to distribute the Fox+ video-on-demand service in Taiwan for a six-month period.

Cheng said the company is still in talks with other international content providers to broaden its content selections.

Separately, Asia Pacific Telecom Co (亞太電信), a telecom arm of Hon Hai Precision Industry Co (鴻海精密), plans to add 25,000 new base stations over the next three to six months in a bid to enhance its network quality and reduce its reliance on leasing networks.

That includes 10,000 femtocell stations that have been installed after the company received approval from the National Communications Commission in April, the company said on Thursday.

Femtocells are small and low-power cellular base stations, adopted by telecom operators to improve cellular coverage locally within homes and businesses, especially indoors, and to divert mobile users’ traffic from main mobile networks.

“In the first stage, the company has targeted popular business circles, night markets and populous areas to deploy femtocells,” Asia Pacific Telecom said in a statement. “The femtocells will help enhance indoor coverage and Internet connection speeds.”

As a newcomer to 4G technology, the company was slow to introduce its own network and relied on leased base stations from bigger rival Taiwan Mobile Co (台灣大哥大) to fill gaps in its coverage.

However, the company said it has significantly reduced its reliance on Taiwan Mobile to provide wireless services.

The company said it is working with the Taiwan Railways Administration and Taiwan High Speed Rail Corp (台灣高鐵) to install femtocells at 100 busy train stations.

It will also install low-power base stations at 800 stores of local retailer Pxmart Co Ltd (全聯實業), in addition to Asia Pacific Telecom’s 350 sales outlets and branches of handset retailer Aurora Telecom Corp (震旦通訊).

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