Chunghwa Telecom Co (中華電信) is looking to expand its enterprise services as intensifying competition weighs on its mobile earnings.
While analysts and investors have voiced concerns about a possible price war between Chunghwa and its rivals, the company said that steeply discounted promotions, such as the NT$499 monthly unlimited data plan, have proven effective in solidifying its mobile subscriber base.
Since the launch of the plan in April and May, the company has attracted about 1.5 million subscribers to turn its net mobile subscriber numbers toward a positive trajectory, Chunghwa Telecom president Sheih Chi-mau (謝繼茂) told an investors’ teleconference yesterday.
Despite the surge in new subscribers, the company has been recognized as Taiwan’s fastest mobile network in terms of 4G download speeds by Ookla Speedtest and OpenSignal, Sheih said.
As of the end of May, the company saw subscribers increase 1.06 percent to 10.52 million from 10.41 million at the end of the first quarter, reversing a downtrend.
Steep discounts on 4G unlimited plans are required to defend against similar moves by competitors and the company would strive to include more bundled sales for high-tier subscribers, Sheih added.
The company’s revenue this quarter could fall short of its guidance before growth resumes in the final quarter of this year, Sheih said, pinning his hopes on upcoming iPhone launches.
Regarding enterprise services, Sheih said that the company in the past quarter unveiled a tariff scheme for narrowband Internet of Things (IoT) for businesses, while its Internet data center in Taipei’s Banciao District (板橋) has reported a 70 percent occupancy rate for rack servers as well as rising profit contribution from each rack.
However, the company said that it has run into delays in recognizing revenue from some of its information technology infrastructure projects and that the effects would carry over to this quarter.
Going forward, the company would continue to leverage its competitive advantages to offer comprehensive and customized information technology services, such as information security, public key infrastructure and smart cities, while venturing into artificial intelligence and blockchain to broaden its revenue streams, it said.
While mobile revenue in the past quarter dipped 4.1 percent annually to NT$25.68 billion (US$839 million), Chunghwa’s multimedia-on-demand service grew 32.5 percent annually to NT$820 million, driven by ELTA TV’s exclusive broadcasts of this year’s FIFA World Cup.
The company reported that net income in the second quarter fell 5.6 percent annually to NT$9.86 billion, with consolidated revenue falling 3.6 percent annually to NT$53.66 billion. Earnings per share were NT$1.27.
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