Taiwan Mobile Co (台灣大哥大), the nation’s second-largest telecom, yesterday increased its capital expenditure this year by NT$500 million (US$16.43 million) to NT$16 billion to expedite the introduction of its 4G network.
The figure was higher than the NT$15.1 billion the company allotted for capital spending a year ago.
However, the expenditure for next year would decline, as most of its 4G related construction is scheduled to be completed in the first quarter of next year, Taiwan Mobile’s multiple service operator unit chairman James Cheng (鄭俊卿) said in an investors’ conference.
“The number of our 4G subscribers is slightly behind our competitors,” Cheng said, adding that the reliability of the service still requires a lot of optimization and fine tuning.
With the recent acquisition of 5 megahertz (MHz) bandwidth on the 700MHz frequency band from Ambit Microsystems Corp (國碁電子), Taiwan Mobile said it could offer customers a connection speed of 150Mbps, the fastest among the nation’s operators.
In September, Taiwan Mobile announced that it planned to spend NT$3.43 billion to acquire 5MHz of Ambit’s 700MHz spectrum, which would give the company 35MHz of 4G bandwidth after the acquisition. The company also said it would invest NT$2.98 billion to acquire a 14.9 percent stake in Ambit.
“4G is a 10,000m race, and we are just 10m away,” he said. “We saved all of our bullets in the fourth quarter to seize the market.”
Cheng said the company aims to increase its number of 4G subscribers to 1 million by the end of this year, which translates into a market share of between 33 and 35 percent.
The company plans to raise its penetration of 4G service to between 15 and 16 percent by the end of this year, up from 9 percent as of yesterday.
The company’s average revenue per user is forecast to rise by about 12 percent when a subscriber upgrades to 4G from 3G, Cheng said.
Last quarter, the company registered a net profit of NT$3.74 billion, or NT$1.39 per share, down 12 percent from the previous year due to higher depreciation costs and amortization costs for its 4G equipment and license, according to the company.
The figure was 9 percent higher than its guidance because these costs were lower than it forecast, it said.
For this fiscal year, the company expects its consolidated revenue to reach NT$112.71 billion and earnings per share to hit NT$5.51.
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