Chunghwa Telecom Co (中華電信) expects capital spending to climb to a new high this year from last year’s budget of NT$30.3 billion (US$1.03 billion), as it looks to expand into emerging businesses such as the Internet of Things (IoT), a company executive said yesterday.
The nation’s biggest telecom is facing big challenges to grow its profit and stem revenue losses as over-the-top services and social media take their toll on its traditional voice call business, the firm said.
“We believe our global peers are facing the same challenges,” Chunghwa Telecom chairman David Cheng (鄭優) told a media briefing. “We will try to reverse this unfavorable trend... I believe our new businesses will show positive results next year and the year after.”
IoT, cybersecurity and software-defined networking services are among the emerging businesses, the company said.
Cheng declined to disclose more details about which other new businesses the company is targeting.
Chunghwa Telecom last week spun off its cybersecurity team to form a new company, CHT Security Co (中華資安國際).
The cybersecurity firm said it aims to hold an initial public offering within five years when its annual revenue reaches US$100 million.
Chunghwa Telecom would continue to spin off its units to form new companies when their scale grows to a significant level, Cheng said.
“By doing so, the company intends to expand its number of businesses and build a huge ‘mother ship,’” he said.
To develop these services, Chunghwa Telecom plans to allocate more budget for equipment purchases this year, Cheng said.
The company’s capital spending last year was mostly on its core business, including adding 4G base stations and deploying fiber optics.
It also plans to grow its headcount by more than 1,000 to cope with the development of new businesses and a wave of employee retirements, Cheng said, adding that special task force has been formed to tackle the issue.
Chunghwa Telecom plans to hire workers with expertise in information technologies such as artificial intelligence, cybersecurity and big data, he said.
The company yesterday announced that it would distribute generous annual bonuses after hitting its financial target last year by making earnings per share of NT$5.1.
Chunghwa Telecom has paid generous bonuses that are equivalent to six months wages over the past few years.
It has decided to raise employees’ wages by an average of 3.54 percent this year.
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