Chunghwa Telecom Co (中華電信) chairman David Cheng (鄭優) is to step down today, despite turning the long-struggling multimedia-on-demand (MOD) business around in just 28 months.
Cheng took the helm in December 2016 when the Ministry of Transportation and Communications (MOTC), the company’s biggest stakeholder with 35.29 percent of its shares, appointed him as the board’s government representative.
The ministry discharged Cheng on Friday, the company said in a regulatory filing with the Taiwan Stock Exchange.
The company is to hold a farewell party for Cheng today, two months before his term was to end on June 23.
“We have been working together to help the company regain its glory with 28 months of hard work since my term began on Dec. 15, 2016,” Cheng said in an internal letter to company employees.
His team had achieved two major tasks: “revolutionizing” the MOD business and improving the quality of its 4G network, he said.
Cheng had previously served as 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.
Under his leadership, Chunghwa’s MOD business began eking out a profit in January, as the number of subscribers spiked to 2 million at the end of last year from 1.3 million a year earlier, passing the break-even threshold.
Major cable TV operators Kbro Co (凱擘) and China Network Systems Co (中嘉網路) had 1.5 million and 1.6 million subscribers respectively at the end of last year.
The MOD business, which provides TV programs mainly produced by other companies over the Internet, has been turning a loss for 14 years, primarily due to regulatory restrictions on online TV channels and because the company could only play a passive role, serving as a platform for the content of other providers.
Cheng helped have those restrictions removed by offering the company’s own video service to improve content.
The National Communications Commission lifted the ban in January.
In 2017, Cheng pushed to have the profit-sharing scheme with channel operators revised and paid providers fees that were based on ratings, rather than a flat rate.
To improve its video content, Chunghwa partnered with Netflix Inc in January, allowing it to add more than 1,700 hours of Netflix films to its MOD platform.
The two firms have also produced films and TV programs together.
Chunghwa president Sheih Chi-mau (謝繼茂) is seen as the most likely successor to Cheng.
If he does take over, Sheih, 65, would have to reconsider his retirement and map out plans to steer the firm into the 5G era and boost its average revenue per user.
To cope with changing market dynamics, Chunghwa has set up a business transformation office and joined other companies to vie for a license to offer Internet-only banking services.
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