Media veteran Cheng Yu (鄭優) was yesterday formally elected as chairman of Chunghwa Telecom Co (中華電信) as part of the government’s efforts to help the state-controlled telecommunications operator find new revenue sources.
The government’s choice of Cheng, which was disclosed on Thursday last week, is aimed at injecting new impetus into the 20-year-old company and accelerating its integration with the information technology, consumer electronics and entertainment sectors, the company said in a statement.
“Chunghwa Telecom will be able to leverage Cheng’s expertise and experience in the digital media sector and speed up the company’s development in digital convergence,” it said.
The board of directors held an extraordinary meeting to elect Cheng as chairman, replacing Rick Tsai (蔡力行), who has reached the mandatory retirement age of 65.
A handover ceremony is to be held today.
Cheng, 63, is a former president of Taiwan Television Enterprise Ltd (臺視), chairman of Radio Taiwan International (央廣) and editor-in-chief of the Chinese-language Commercial Times.
“It is difficult to make an elephant dance. Chunghwa Telecom is the nation’s biggest telecom company with diverse businesses from landlines and mobiles to Internet TV. It will take a major effort to grow from the integration of those businesses,” Doong I-chun (董奕君), who tracks the telecom industry with Market Intelligence and Consulting Institute (MIC, 產業情報研究所), said in a telephone interview.
“With Cheng’s extensive experience in the media sector, he will be able to come up with innovative ideas for Chunghwa Telecom to offer digital content,” Doong said.
As the nation’s 4G penetration rate hit 60 percent this year, telecoms are facing big challenges to maintain their growth momentum, Doong said.
Chunghwa Telecom had 6.23 million 4G subscribers as of Sept. 30, accounting for 57 percent of its total mobile subscribers.
Rivals such as Asia Pacific Telecom Co (亞太電信) and Far EasTone Telecommunication Co Ltd (遠傳電信) have taken more aggressive steps to create new revenue sources through price wars or offering new services, leaving Chunghwa Telecom looking slow on the uptake, which could hurt its net profit next year, an industry source said.
Given his open-mindedness, Cheng could be the right choice to help the company enter a new growth era, the source said.
Chunghwa Telecom’s net profit is forecast to contract 6.6 percent to NT$39.98 billion (US$1.25 billion) this year, the company forecast. It hit a four-year high last year of NT$42.82 billion.
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