Chunghwa sees income fall as pricing cuts bite

DATA GROWTH::Local telecoms operators are seeking to boost their revenues by increasing smartphone use, which they hope will drive up the average phone bill

By Lisa Wang  /  Staff reporter

Sat, Jan 12, 2013 - Page 14

Chunghwa Telecom Co (中華電信), the nation’s largest telecoms operator, reported an annual decline of 14.9 percent in net income for last year, as it suffered the brunt of extensive price cuts on its voice and broadband services.

Net income fell to NT$40.07 billion (US$1.38 billion), or NT$5.16 per share, last year, compared with NT$47.07 billion, or NT$6.04 a share, in 2011, according to the company’s financial statement released on Thursday.

However, Chunghwa said it had beaten its financial forecast of NT$39.18 billion in net income for last year.

Revenue edged 0.7 percent lower to NT$191.1 billion last year from 2011’s NT$192.46 billion, after the National Communications Commission requested that local phone companies cut mobile voice service rates by more than 4.8 percent annually for a three-year period including last year, along with landline voice services after cutting long-distance rates.

Chunghwa almost has a monopoly status in the nation’s landline market.

The revenue figure was better than the NT$188.88 billion forecast in February last year. The company attributed the smaller revenue decline to 34.3 percent annual growth in its value-added data services last year, which boosted its data service revenue contribution to 28.2 percent, from 21.5 percent in 2011.

Local telecoms companies seek to boost smartphone penetration rates among their subscribers in order to increase data traffic and to grow their average revenues per user by offering popular handsets such as Apple Inc’s iPhone, as well as mobile phones from HTC Corp (宏達電) and Samsung Electronics Co.

Chunghwa aimed to increase smartphone usage to 70 percent of its overall mobile users last year, from less than 50 percent in 2011.

Internet TV services also helped revenue to grow, the company said. Its subscribers rose to 1.19 million last year from 1.06 million a year earlier.

Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co Ltd (遠傳電信) also said they hit their annual financial forecasts.

Taiwan Mobile, the nation’s second-largest telecoms operator, said net income grew 9 percent to NT$14.69 billion, or NT$5.46 per share, compared with NT$13.47 billion, or NT$4.7 a share a year earlier.

Taiwan Mobile chief financial executive Rosie Yu (俞若奚 ) attributed this growth to steady expansion in the company’s three major sectors.

Revenue expanded about 21 percent to NT$98.14 billion from NT$81.37 billion during the same period.

Far EasTone’s net profit surged 19.37 percent last year to NT$10.6 billion, or NT$3.25 per share, from 2011’s NT$8.88 billion, or NT$2.73 per share.

Its revenue expanded 14.52 percent annually to NT$86.75 billion from NT$75.75 billion.