Chunghwa Telecom Co (中華電信) yesterday said net income fell more than forecasted to NT$9.14 billion (US$309.4 million) in the first quarter, an annual decline of 4.7 percent.
The nation’s top telecom operator had forecast a net income of NT$8.83 billion for the quarter.
The margin of earnings before income tax, depreciation and amortization (EBITDA) shrank to 34.2 percent last quarter from 35.21 percent a year ago because of price cuts and 17.1 percent year-on-year increase in handset sales, company officials told an investor teleconference.
Chunghwa Telecom, which has 10.35 million mobile subscribers, increased its revenue by 2.1 percent to NT$56.63 billion last quarter from NT$55.48 billion in the previous quarter, with half of the revenue generated by mobile services.
Revenue from mobile data services grew 42.2 percent year-on-year to NT$6.49 billion, helped by annual growth of 68 percent in mobile Internet services.
Blended average revenue per user (ARPU) rose 3 percent roughly to NT$602 last quarter from NT$584 a year ago.
However, ARPU from smartphone users dropped to NT$1,163 from NT$1,185 a quarter ago and NT$1,200 a year ago. Company president Shih Mu-piao (石木標) attributed the decline to the company’s new policy of subsidizing middle-range and low-range smartphones, which carry a lower minimum monthly fee.
Low-range smartphones account for 25 percent of the company's total smartphone portfolio.
Shih said the new smartphone subsidy policy would help increase usage of Chunghwa’s 3G services and would drive customer-retention costs down.