The nation’s three major telecom service providers last month saw declines of 8 to 8.5 percent in average revenue per user (ARPU) amid cut-throat competition in the domestic market, KGI Securities Investment Advisory Co (凱基投顧) said last week.
Although May saw a brief recovery in ARPU, revenues from voice communication and data transmission services are expected to fall in the second half of this year, with the three major telecoms possibly seeing a year-on-year contraction in ARPU of 5 to 10 percent, widening from declines of 1 to 5 percent in the January-to-June period, KGI analysts Victor Tseng (曾繁仁) and Jim Liou (劉峻廷) said in a note on Thursday last week.
The forecast came after Taiwan’s three major players — Chunghwa Telecom Co (中華電信), Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co (遠傳電信) — last week released unaudited earnings results for the second quarter of this year, with earnings per share of NT$1.27 for Chunghwa Telecom, NT$1.39 for Taiwan Mobile and NT$0.82 for Far EasTone.
Penalties paid by subscribers who canceled contracts and started low-cost, unlimited 4G service plans in May contributed to the companies’ second-quarter bottom-line figures, assisting them in meeting their earnings guidance and KGI’s estimates, Tseng and Liou said in the note.
However, compared with a year earlier, Chunghwa Telecom’s second-quarter profit of NT$9.86 billion (US$322.69 million) was 5.6 percent lower, while Taiwan Mobile’s net profit of NT$3.8 billion declined 0.8 percent and Far EasTone’s NT$2.68 billion fell 8.2 percent, which KGI analysts attributed mainly to a slowdown in mobile service revenue and an increase from 17 percent to 20 percent in the business income tax rate.
In the second quarter, Chunghwa Telecom saw its overall sales fall 3.6 percent year-on-year to NT$53.66 billion and Far EasTone’s dropped 1.4 percent annually to NT$21.62 billion, while Taiwan Mobile posted an increase of 2.6 percent to NT$28.54 billion, the companies’ data showed.
Market watchers already said in May that the unlimited 4G service plans, particularly the NT$499 monthly package, would have a negative effect on the three telecoms’ ARPU performance going forward, as well as their mobile service and voice revenue.
KGI analysts said Taiwan Mobile also suffered a decline in mobile service revenue in the second quarter, but a marked 32 percent revenue increase at its subsidiary Momo.com Inc (富邦媒體), a television, online and catalog shopping retailer, helped the company’s overall quarterly sales to grow 2.6 percent from a year earlier.
While the three telecoms have made efforts to create new revenue sources in non-mobile services, they would still need to provide a favorable product mix, as well as lower operating costs in terms of handset subsidies and dealer’s commissions, in a bid to offset the effect of escalating subscriber-price cuts, KGI analysts said.
Tseng and Liou said they expect the three telecoms to remain on target this year in growing earnings before interest, tax, depreciation and amortization (EBITDA), even though the companies have shown little commitment to terminating the promotion of such low-cost service plans.
So far this year, shares in Chunghwa Telecom have risen 5.19 percent, compared with the 2.08 percent increase in the broader market, while Taiwan Mobile has fallen 2.33 percent and Far EasTone 0.82 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the