Mon, Aug 08, 2005 - Page 1 News List

Chunghwa Telecom union to take to streets over sale

By Amber Chung  /  STAFF REPORTER

On the eve of Chunghwa Telecom Co's (中華電信) share sale, the company's union threatened strikes, starting today, on a larger scale than ever after it refused to sign a deal offered by the company regarding employee rights, the union said yesterday.

"We will start large-scale strikes nationwide today throughout the week, as the privatization date of Aug. 12 nears," Simon Chang (張緒中), head of Chunghwa Telecom Workers' Union (中華電信工會), said in a phone interview yesterday.

The union expected nearly half of the 28,000 Chunghwa employees would join the strikes, seeking government guarantees of employee pension benefits before allowing the telecom giant to privatize, Chang said.

The state-run Chunghwa Telecom is by far the nation's largest telecommunications firm. As of May, the company monopolized over 90 percent of Taiwan's fixed line market, with 13.3 million subscribers, and an 80-percent share in the broadband internet connection market, with 3.3 million households. It also enjoys a nearly 40-percent share of the mobile phone market, with 8.1 million subscribers, according to the firm's figures.

This will not be the first time Chunghwa's workers have taken to the streets. Union representatives clashed fiercely with police outside Chunghwa's headquarters in Taipei, protesting the government's plan to sell shares overseas. The union also threatened strikes on July 1, but aborted the plan after it claimed a preliminary consensus had been reached with the management on benefits.

Yesterday, Chunghwa Telecom vice president and spokesman Hank Wang (王漢朝) said the company respected the union's decision, but would endeavor to protect customers' rights from being damaged by the strikes.

"We will deploy backup manpower, including management, to maintain operations as usual," Wang said on the phone. "The strikes only make it more difficult for the union's appeals to be accepted."

The union and the management remained at odds with each other over retirement compensation for employees, who would lose their privileged benefits as public servants after privatization.

Last month, the union visited the US Congress and the New York State Attorney, hoping to blockade the share sale, which the union said was an unlawful sale as the company failed to abide by a resolution made in the legislature. But the management stuck to its original schedule, visiting overseas investors last week to brief them about the American Depositary Receipts (ADRs) offering on the New York Stock Exchange.

The Ministry of Transportation and Communications has proposed selling a 14 percent stake or 125.42 million ADRs, in the US this week, and will auction off another 3 percent stake or 289.4 million common shares tomorrow to domestic investors. Each ADR will represent 10 common shares.

The completion of the two sales would reduce the government's holdings in the company to around 48 percent from the 65 percent stake it currently owns, making Chunghwa a private entity.

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