Taiwan Star Telecom Co (台灣之星) on Thursday last week said it aims to achieve a positive bottom line next year, after reporting earnings ahead of schedule last month.
The nation’s No. 4 telecom said its earnings before interest, taxes, depreciation and amortization (EBITDA) last month turned positive.
It attributed the performance to subscriber and revenue growth, adding that the nation’s major telecoms have seen a downtrend during the period.
Taiwan Star’s number of subscribers rose 21 percent annually to 2.06 million as of the end of last month, while service revenue grew 19 percent annually to NT$3.4 billion (US$113.7 million) in the first fourth months of this year, the company said.
“It is encouraging for us to see EBITDA turning positive in April. We expect a positive EBITDA for the whole of this year,” Taiwan Star president Cliff Lai (賴弦五) said. “It means that the company is able to generate cash flow to fund its operating expenses.”
That supports the company’s belief that it will swing into monthly profits some time next year, when its subscriber base is expected to rise to 2.5 million, Lai said.
Taiwan Star has been playing a subversive role in the nation’s telecom industry by offering affordable rate plans and innovative services since entering the market four years ago, Lai said.
As a result, the company has not followed in the steps of major players, led by Chunghwa Telecom Co (中華電信), in offering low-rate packages, such as the controversial NT$499 per month unlimited data plan, he said.
“Low-price [plans] can be available for one week, or one month, but they cannot last for one year, considering the costs,” Lai said. “We do not compete with rivals just with low-cost services.”
The company has a better cost structure than its rivals and is confident that it will continue to see growth in its subscriber base, Lai said, shrugging off concerns about losing subscribers to rivals over the NT$499 monthly plan.
Taiwan Star also expects its average revenue per user to stay at about NT$500 for post-paid users, he said.
The company said it plans to spend between NT$5 billion and NT$6 billion on building base stations this year, which is similar to the figures announced by its rivals.
However, its expenditures are to decline next year, it said.
The company’s number of base stations is to increase 40 percent year-on-year to 14,000 by the end of this year, Taiwan Star added.
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