Chunghwa Telecom Co (CHT, 中華電信), the nation’s biggest telecom, yesterday forecast that net profit would decline as much as 5.8 percent annually this year, due to higher operating expenses, including 5G deployment costs and license fees.
Net profit is to be between NT$30.91 billion and NT$32.47 billion (US$1.03 billion and US$1.08 billion), compared with NT$32.81 billion last year, hitting the lowest level in the company’s history, it said.
Earnings per share would fall to between NT$3.99 and NT$4.19 from NT$4.23 last year, it added.
Operating expenses would increase 5.3 to 5.5 percent annually to between NT$175.51 billion and NT$175.83 billion, from last year’s NT$166.74 billion, the company said.
Chunghwa Telecom attributed the increases primarily to new equipment amortization costs for 5G network and related expenses, along with higher costs for telecom devices.
“On the mobile business front, we have defended our market leadership, building a strong base for our upcoming 5G business,” chairman Sheih Chi-mau (謝繼茂) said in a statement.
As the nation’s 5G spectrum auctions near their conclusion, Chunghwa Telecom plans to introduce 5G services in the third quarter of this year, Sheih said.
Revenue is expected to increase 3.2 to 3.7 percent annually to between NT$214.1 billion and NT$215.29 billion, from NT$207.52 billion last year, the company said.
The revenue growth would be mainly due to increases in its Internet TV business, multimedia-on-demand, and Internet value-added services, offsetting constant declines in mobile service revenue amid intensive competition, it said.
Chunghwa Telecom has secured 90 megahertz of bandwidth, the largest among the five bidders, for NT$46.29 billion in the first phase of the 5G spectrum auction, which ended last week with total bids reaching NT$138.08 billion, more than four times the floor price set by the National Communications Commission.
The final bid total is expected to climb even higher, as the telecoms are to bid for the location of their 5G frequency bands in the second phase scheduled for Feb. 21.
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