Chunghwa Telecom Co (中華電信) yesterday said it would explore new partnerships, including forming a joint venture with a peer in Southeast Asia as the nation’s biggest telecom searches for new growth engines overseas.
The overseas expansion plan is in line with the government’s “new southbound policy” as President Tsai Ing-wen’s (蔡英文) administration encourages Taiwanese enterprises to divert their investments from China to ASEAN member states to better manage operational risks, Chunghwa Telecom chairman David Cheng (鄭優) told reporters.
Cheng unveiled his blueprint for Chunghwa Telecom’s business outlook at his first media appearance after assuming his new job at the company yesterday.
Photo: CNA
“Taiwanese businesses will not only need to be bankrolled when expanding to ASEAN, but they will also need telecom services,” Cheng said. “It is our hope to form a partnership [with an ASEAN telecom].”
The company’s longstanding cooperation with Vietnam Military Telecommunications Corp (Viettel) sets a good model for new partnerships, Cheng said.
Other forms of tie-up would also be considered, he said.
In 2008, Chunghwa Telecom created its first overseas joint venture with Viettel.
Viettel-CHT Co Ltd, which is 30 percent owned by Chunghwa Telecom, offers broadband leasing, Web hosting and disaster recovery services. Viettel controls the remaining 70 percent.
Aside from Viettel, Chunghwa Telecom also operates a branch in Singapore and plans to open one in Thailand.
“The overseas expansion will help the company expand its businesses to new areas,” Cheng said. “As the market is very competitive, we have to explore new areas for growth.”
In addition to overseas expansion, Chunghwa Telecom is focused on developing digital convergence as the company’s profits get squeezed amid intensifying competition from its rivals and cable TV operators, Cheng said.
“We have to seize on new business opportunities and adapt to new business models as the industry ushers in a new era of digital convergence,” Cheng said.
As part of its efforts to boost digital convergence, the company plans to increase and enrich the digital content it offers to Internet TV and over-the-top subscribers, he said.
He said that growing the company’s net profit would be his focus.
Chunghwa Telecom’s net profit rose to a four-year high last year, with earnings per share of NT$5.52.
Macquarie Research said that for next year, it expects the nation’s top three telecommunication firms to strive for a stable operating environment, while dealing with the potential nuisance created by the two smaller telecoms.
The investment agency holds a cautious outlook on the nation’s telecom sector.
Former Chunghwa Telecom chairman Rick Tsai (蔡力行) said the company’s market value has surged by about NT$100 billion to NT$799 billion since January 2013 when he took the post.
Company shareholders have received cash dividends totaling NT$15 per share over the past three years, representing about a 10 percent return on their investment, he said.
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