Chunghwa Telecom Co (中華電信), the nation’s biggest telecom, yesterday forecast that its net profit this year would contract for a fourth consecutive year as operational costs rise, mostly due to increased expenses for new information and communications technology (ICT) projects.
Net income for this year could shrink by 4 percent year-on-year to NT$34.11 billion (US$1.11 billion), or grow 0.5 percent to NT$35.68 billion, compared with the NT$35.52 billion last year, Chunghwa Telecom said.
Earnings per share would reach between NT$4.4 and NT$4.6 this year, compared with NT$4.58 last year, the company said.
Total revenue for this year is expected to increase by a range of between 2.4 percent and 3.5 percent to between NT$221 billion and NT$223 billion, buoyed by increasing enterprise ICT projects, value-added services and Internet services such as integrated data centers and information security, chief financial officer Harrison Kuo (郭水義) told an investors’ conference.
Chunghwa Telecom also expects its multimedia-on-demand (MOD) service to continue to be major engine for income, Kuo said.
The number of registered MOD users exceeded 2 million at the end of last year, which helped boost the business’ revenue by 27.7 percent year-on-year, he said.
Operating costs and expenses are expected to rise by between 3.4 percent and 3.7 percent year-on-year to between NT$177.84 billion and NT$178.25 billion this year, which Kuo mainly attributed to an expansion of ICT projects.
Earnings before interest, tax, depreciation and amortization is expected to grow by between 3.4 percent and 5.9 percent to between NT$78.03 billion and NT$79.95 billion, compared with NT$75.49 billion last year, the company said.
Even though the company’s ICT revenue decreased year-on-year last quarter, the company expects to see it rebound in the year ahead, president Sheih Chi-mau (謝繼茂) said.
The company plans to provide more focused ICT solutions, as well as streamline its ICT product platform to make it more competitive, he said.
Due to fierce price competition, the company’s mobile services revenue declined by 19 percent year-on-year to NT$15.04 billion last quarter and fell 15.7 percent to NT$63.91 billion for the whole of last year, company data showed.
“We believe the market this year will be better than last year and there should be some opportunity to see mobile service revenue improve,” Chunghwa assistant vice president Shen Fufu (沈馥馥) said.
With a slowdown of sales of high-end handsets, the company expects its average revenue per mobile user to decline as the handset replacement cycle becomes longer and the market remains competitive, Sheih said.
Chunghwa Telecom on Tuesday announced that its board of directors had approved an investment of NT$4.5 billion in Web-only Next Bank (將來銀行), a larger sum than its original plan to invest NT$3 billion.
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