Taipei Times: How many customers does your company have now and what is Far Eastone's future direction as a business?
O'Konek: We like to measure our market based on the number of SIM [Subscriber Identity Module] cards, and right now we have 3.8 million revenue producing SIM cards. According to government statistics, the SIM card penetration rate in Taiwan is about 90 percent. When you look at the Taiwan market from November 2000 to November 2001, revenue has been almost flat.
So, even though the number of SIM cards [in use] is up 30 percent, spending on cellular services hasn't increased significantly.
But for Far EasTone, from 2000 to 2001, we have seen a year-on-year revenue increase of about 15 percent. So, we are growing faster than the market average. We had about a 55 percent net income increase this year.
As for market share of SIM cards, Far Eastone is number four, in terms of revenue we are number three in the industry in Taiwan.
TT: What services will generate higher revenue next year?
O'Konek: The other interesting measure the industry is looking at now is the percentage of revenue coming from wireless data services -- most of it is coming from SMS [Short Message Service]. Today about 3 percent of our revenue comes from data services, and that number is about 40 percent higher than last year. Compared with the company with the largest number of SIM card users -- Chunghwa Telecom -- only about 1.5 percent of their revenue comes from data. So, when we talk about the future business we [believe] it will come from new sources of revenue; not just people talking on their phones, but using mobile phones as messaging devices to access information and download pictures.
TT: Do you think mobile data will be the major revenue driver?
O'Konek: I think it will take a while to become the major source. We should look at what percent of our revenue is coming from products and services that don't exist at this moment. I will say the majority of our revenue growth next year will come from data services and from corporate service business. Taking North America as an example, about 15 percent of cellular companies' revenue come directly from the corporate service [sector]. Europe is about 15 to 20 percent; Hong Kong and Japan are about 10 percent. However, the number in Taiwan is less than 3 percent.
TT: When will Far EasTone launch GPRS services?
O'Konek: We don't plan to launch GPRS soon. There is no customer who would buy anything with GPRS except if they're interested in some unique service. If there is something really compelling, customers will want to go out and buy a new handset. But now we don't see a huge demand for GPRS service.
However, since early 2000 we have been looking at SMS. Everybody's mobile phone can do SMS, so we decided to run our messaging coupon service *147#.
We began to think that what people do with the network on the phone is the driver of their behavior. Just because you get people to buy a WAP [Wireless Application Protocol] handset doesn't mean they will use it for surfing the Internet or doing anything new. The same thing is true today: If you buy a GPRS phone, what are you gonna do with it?
TT: What are the major factors behind a successful wireless Internet service?
O'Konek: The things we actually look at is what we call the eight building blocks of the wireless Internet, including customers, applications, navigation, common service platform, IP network, handsets/devices, sales/services and barriers of entry.
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