Mon, May 07, 2018 - Page 16 News List

Price competition waning: Far EasTone

By Lisa Wang  /  Staff reporter

Far EasTone Telecommunications Co Ltd (遠傳電信), the nation’s third-largest telecom, said price competition has waned somewhat in the domestic market, after bigger rival Chunghwa Telecom Co (中華電信) scrapped a controversial NT$499 (US$16.79) rate plan for unlimited data usage.

Far EasTone president Yvonne Li (李彬) told a teleconference on Friday last week that “this [NT$499 service plan] is a short-term phenomenon among the big three,” referring to Far EasTone, Chunghwa Telecom and Taiwan Mobile Co (台灣大哥大).

“We think that the big three have no intention of initiating a price war in a nearly saturated market,” Li added.

Price competition intensified last month, after Chunghwa extended the service plan to not only civil servants, teachers and military personnel, but also the general public, Li said.

Chunghwa Telecom canceled the plan at the end of last month, but launched new low-tariff programs available to those who sign up online, she said.

As the telecoms are behaving themselves and not making aggressive moves through their retail stores, competition is now back to normal, she added.

To attract new customers, Far EasTone last month teamed up with Line Corp, creator of the Line messaging app, in offering lower-rate Line Mobile services with unlimited data usage.

“This is a new group of users for us, as they are heavily dependent on social media to communicate. They are not heavy users of video streaming, so they do not need a plan that offers a high amount of data,” Li said.

Pricing on the Line Mobile plans is the first in Taiwan to be set according to the plans’ Internet connection speed. For example, subscribers to the NT$299 rate plan would have unlimited data usage at speeds of up to 10 megabits per second, while those who pay NT$399 a month would have speeds of up to 21 megabits per second. Only subscribers to the NT$499 service plan would have full 4G speeds.

Far EasTone reported net profit of NT$2.45 billion for last quarter, matching the company’s forecast of NT$2.4 billion, while earnings per share of NT$0.75 came slightly ahead of its estimate of NT$0.74.

The revenue contribution from new businesses rose to 9.2 percent of total revenue last quarter, from 7.8 percent in the final quarter of last year, with the figure likely to hit 11.8 percent by the end of this year, the company said on Friday.

Far EasTone said it has healthy cash flows and is confident that it will generate about NT$15 billion in free cash flows this year, compared with NT$16.09 billion last year.

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