Far EasTone Telecommunications Co Ltd (FET, 遠傳電信), the nation’s third-largest telecom, yesterday said that an outbreak of COVID-19 in China would not delay its 5G rollout, but warned that increases in 5G-related costs would eat into its bottom line.
Net profit this year is expected to slide 8.2 percent to NT$8.02 billion (US$265.99 million), compared with NT$8.74 billion last year, with earnings per share falling from NT$2.68 to NT$2.46 from, the lowest in about two decades, the company said.
“We will launch 5G services in the third quarter as planned,” FET president Chee Ching (井琪) said. “Equipment supply is not a problem based on messages from our vendors, unless the global supply chain is affected by the outbreak.”
The 5G-related marketing fees and amortization and depreciation costs are expected to increase this year, which would become even heavier next year, Ching said.
Operating expenses are forecast to jump 10.5 percent to NT$16.39 billion, compared with NT$14.83 billion last year, the telecom said.
FET spent a total of NT$41 billion on 5G spectrum, including 80 megahertz (MHz) of bandwidth in the 3.5-gigahertz (GHz) band, the best suited for 5G services in terms of coverage and capacity, for NT$40.6 billion in the spectrum auction last month.
The telecom this year plans to raise capital spending by about 65 percent to NT$10.2 billion, up from NT$6.2 billion last year, with 60 percent of it earmarked for 5G network deployment, it said.
The company said that it expects 5G services to help increase revenue from enterprises and consumers, given rising corporate demand for Internet of Things, cloud-based, system integration and security services.
As a result, overall revenue is to rise 3.4 percent to NT$86.76 billion this year, compared with NT$83.87 billion last year, the company said.
Average revenue per user is expected to improve this year as well, Ching said, adding that it last year posted blended average revenue per user of NT$579, beating Taiwan Mobile Co’s (台灣大哥大) NT$574 and Chunghwa Telecom Co’s (中華電信) NT$456.
Ching declined to comment on price increases for 5G services, but said that the company would issue pricing once Chunghwa reveals its fee structure.
In countries that have already rolled out 5G services, it is more expensive than 4G by between 60 percent and 100 percent, FET said.
Meanwhile, it has proposed a cash dividend distribution of NT$3.25 per share, representing a payout ratio of 121 percent, it said.
The distribution is less than the NT$3.75 per share it issued last year.
The company also expects to raise NT$5 billion from selling real estate in Taichung, it added.
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