Telecom veteran Lu Shyue-ching (呂學錦) won the government’s support to take over at the helm of the nation’s largest telecom company, Chunghwa Telecom Co (中華電信), last month in an early management shuffle, a change that industry analysts believe may help the company grow faster.
Lu started in the telecom industry more than three decades ago and has served in different roles in both the government and private sector throughout his career. He took over the post of former chairman and chief executive Hochen Tan (賀陳旦) on Aug. 20.
The management shakeup occurred after the Chinese Nationalist Party (KMT) came into power in May. Hochen’s term was due to expire in mid-June of 2010.
Lu made his management strategy clear on his first day on the job at the nation’s telecom giant. The company would quicken the deployment of next-generation technology, including the Next-Generation Network (NGN) for the fixed-line infrastructure and fourth-generation (4G), or Long-Term-Evolution (LTE) technology, between 2011 and 2013, he said.
Lu put the deployment of next-generation networks high on his priority list, as he believes the technological evolution may provide a better chance for the company to grow over time.
“Looking forward, the company will continue developing the core business,” he said at the time.
“We will be very careful about [new] investments in non-core businesses. We will only invest in businesses that will bring profit to the company,” he said on Thursday at an investor conference.
In recent years, Chunghwa Telecom’s major investments include the purchase of a majority stake in local handset retailer Senao International Co (神腦國際) for NT$1.06 billion early last year and a big share in animation company Spring House Entertainment Inc (春水堂科技) for NT$20 million in October 2006.
In addition, the phone company bought a 21 percent share of local content aggregator Elta Technology Co Ltd (愛爾達科技) for an unspecific amount to offer the Beijing Olympics Games on its mobile phones and via the Internet.
Chunghwa Telecom later withdrew the investment in Elta after the nation’s telecom regulator the National Communication Commission barred the phone company from supplying any content.
One analyst said the management shuffle would benefit the company.
“We believe the personnel change will have a positive impact on the company in the next few years as Lu will make more effort on the core business,” an analyst with KGI Securities (中信證券) told the Taipei Times last week on condition of anonymity.
“Chunghwa Telecom has used too many resources investing in non-core businesses,” the KGI analyst said.
The company has still not been able to make a profit on its multi-billion dollar investment in its multimedia-on-demand (MOD), or Internet TV, business, he said.
Under the new leadership, Chunghwa Telecom will focus on small-scale projects closely related to telecom services and on service in neighboring countries.
That will be a big change for the company, which is 36 percent-owned by the government, and from its former chairman’s approach.
Hochen hoped to spur stagnant growth by spending more on expanding the non-traditional telecom businesses and by diversifying into non-telecom sectors.
The new chairman said that wireless data usage and corporate customers, which make up only a small portion of the company’s revenues, would be important growth drivers now that voice usage revenue continues to fall.
He did not elaborate on plans to boost the use of data transmission, which accounted for about 9 percent of Chunghwa’s total revenues in the first six months.
Time will tell if Lu can help the company grow amid intensifying competition, but he is apparently confident in himself.
“I think the company has a chance to grow [in revenues] next year,” Lu said on Thursday.
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