Chunghwa Telecom
Chunghwa Telecom: 14.4% profit growth due to 5G and non-traditional telecom services; Taiwan telecom consolidation in 2023
Chunghwa Telecom, Taiwan’s largest network operator reported double digit net profits last month, as more people sign up for 5G services and nontraditional offerings (see below). Net profits last month expanded 14.4 percent annually to NT$3.22 billion (US$105.56 million) from NT$2.82 billion in March last year, the company said in a statement on Tuesday. That brought first-quarter net profit to NT$9.64 billion, up 6.4 percent from NT$9.06 billion in the same period last year. Earnings per share (EPS) rose to NT$1.24 from NT$1.17 in first quarter of last year, making Chunghwa Telecom the most profitable telecom in Taiwan. First-quarter revenue expanded 5.7 percent year-on-year to NT$54.21 billion, the company said, adding that the results exceeded its expectations. Its average revenue per post-paid mobile subscriber climbed 5.3 percent year-on-year last month, the telecom said, attributing the trend to more 5G subscriptions.
Last month’s robust performance came amid 50 percent annual growth in revenue from its nontraditional telecom services, including Internet data center leasing, cloud-based services, artificial intelligence of things services and private networking, it said. Meanwhile, Taiwan Mobile Cos net profit fell 0.3 percent to NT$2.72 billion in the first quarter, with earnings per share dropping to NT$0.96, the company said yesterday, adding that its bottom line was affected by unfavorable foreign exchange rates. However the companys average revenue per post-paid mobile subscriber last month rose 3.5 percent annually to NT$664, marking 22 straight months of growth, it said. First-quarter revenue increased 8.1 percent annually to NT$43.02 billion from NT$39.79 billion, it said. About 58 percent of last quarter’s revenue came from its e-commerce subsidiary Momo.com Inc.
Chunghwa Telecom Co signage is pictured at an outlet in Taipei Photo Credit: CNA
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Separately, Far EasTone Telecommunications Co said that its first-quarter net profit surged 18.4 percent annually to NT$2.75 billion, with EPS of NT$0.85, both surpassing the companys expectations. Revenue in the first quarter expanded 1.8 percent to NT$22.31 billion from a year earlier. Far EasTone attributed the robust growth to its number of mobile users expanding to 7.17 million last month, while its average revenue per user increased 2.3 percent, marking the best performance in about 25 months, it said.
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Research and Markets “Taiwan Telecoms Industry Report – 2023-2030” report states that the Taiwanese telecoms market is set to see a wave of consolidation in 2023 By the end of the year, the number of mobile operators could decline from five to three, which is considered a reasonable number for market competition globally. Two of the three major players are set to acquire two smaller companies. Taiwan Mobile is set to merge with Taiwan Star, and FET will take over Asia Pacific Telecom, a smaller operator. Both deals are expected to conclude by late 2023, reflecting a trend of consolidation by private players that we have witnessed in other Asian markets such as Malaysia, Thailand and Indonesia.
Further market consolidation is likely to occur over the forecast period as many telecom players confront the task of creating returns in a growing and capital-intensive industry and are therefore considering ways to grow industry revenues and profitability.
The publisher forecasts that mobile subscriptions will continue to grow in the 2023-30 period and fixed broadband subscribers will also continue to grow but lower its household penetration over the same period due to fixed-wireless substitution. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2015, sliding down every year since then. Following the market contraction over the last 5 years, the publisher forecasts flat revenue growth to 2030, as long as data pricing stays rational amid the mergers from five to three mobile operators due in 2023.
Mobile subscriptions are growing faster than mobile service revenue leading to ARPU decline after 3 years of intense competition with the market transitioned completely transitioned to 4G after shutting down 2G and 3G networks in 2017 and 2019 respectively.
The publisher expects the overall Taiwan telecoms market to remain flat through to 2025 after a marked decline from 2016 due to mobile service revenue pressure partially offset by fixed broadband and enterprise data growth.
Mobile Subscribers and Revenue:
As the rate of growth of net additions in mobile subscriptions slows, telecommunications providers are channelling their efforts into reducing their cost base and stabilising ARPU through new value-added services using mobile data and bundling fixed and mobile services. The proportion of postpaid subscriptions remained stable at about 81% between 2016 and 2022 while the postpaid segment is growing in popularity with SIM-only offerings and reducing the number of people holding multiple SIMs.
According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. Taiwan mobile users pay for competitively priced data as mobile users recorded the largest monthly download in the Asia Pacific region.
Broadband Subscribers – FTTH Push and Fixed Wireless:
The fixed broadband market is experiencing a subdued growth with Chunghwa Telecom losing share to HFC cable operators such as KBro, Taiwan Mobile, TBC and CNS. Chunghwa Telecom invested early in the 2010s in FTTx technologies while migrating its DSL subscribers to its HiNet network. Competing cable operators also invested in upgrading their cable networks bundling mobile, IPTV and e-Commerce services but falling short of upgrading to full-fiber networks limiting opportunities for gigabit speeds. Fixed broadband penetration is forecasted to decline as fixed-wireless substitution is increasing supporting a rising number of lone-occupancy households.
References:
https://www.taipeitimes.com/News/biz/archives/2023/04/13/2003797810
https://www.yahoo.com/lifestyle/taiwan-telecoms-industry-report-2023-172800956.html
New Partnerships Aim to Simplify Global IoT Connectivity & Deployment
Two new partnerships promise to increase global IoT connectivity.
1. Chunghwa Telecom and Tata Communications:
India’s global network operator Tata Communications is partnering with Taiwan’s Chunghwa Telecom to bring global connectivity to consumer electronics and Industrial Internet of Things devices. In a joint press release, the companies said the partnership will enable Chunghwa Telecom to tap into additional revenues by connecting IoT devices through Tata Communications’ MOVE-IoT Connect platform which enables IoT devices to be deployed quickly -both locally and internationally- by leveraging Tata Communications’ ecosystem of mobile network operators worldwide.
The Taiwanese electronics industry output is expected to be worth $228 billion (NT$6.65 trillion) in 2018, and the wearables market grew at double digits in both volume and value terms in 2017. Chunghwa Telecom looks to capitalize on this growth through the existing IoT roaming services the operator provides.
“Our aim is to serve three million IoT devices in the next three years, and Tata Communications will be one of our key partners to fulfill this ambition,” Ming-Shih Chen, president of mobile business group at Chunghwa Telecom.
“Tata Communications MOVE will give our customers’ IoT services borderless network coverage across 200 countries, ensuring a consistently high-quality and reliable user experience.”
One of Chunghwa Telecom’s first Tata Communications’ MOVE – IoT Connect customers is TaiDoc Technology, which manufactures premium medical devices to improve people’s health and quality of life. TaiDoc will use Tata Communications MOVE – IoT Connect to extend the reach of its devices to countries such as China, Thailand and the U.S.
“Our aim is to serve three million IoT devices in the next three years, and Tata Communications will be one of our key partners to fulfil this ambition,” said Ming-Shih Chen, President of Mobile Business Group, Chunghwa Telecom. “Tata Communications MOVE™ will give our customers’ IoT services borderless network coverage across 200 countries, ensuring a consistently high-quality and reliable user experience. At the same time, we’re able to extend our business easily by being part of the Tata Communications’ MOVE™ ecosystem of mobile network operators. It’s a win-win for us.”
“IoT devices require borderless, secure and scalable connectivity to enable the capture, movement and management of information worldwide. Cellular connectivity is an effective foundation for IoT services, but the problem is that today’s mobile networks are inherently local – there is no such concept as a global mobile network,” said Anthony Bartolo, chief product officer at Tata Communications.
“We want to change that. We’re excited to work with Chunghwa Telecom and other leading mobile network operators around the world to build a truly global ecosystem of connectivity, and spur IoT adoption by businesses worldwide.”
References:
https://www.telecomasia.net/content/chunghwa-telecom-tata-com-ink-deal-global-iot-connectivity
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2. China Unicom and Telefonica:
China Unicom has signed an agreement with Spain’s Telefonica designed to simplify and accelerate IoT deployments for their respective enterprise customers globally. The partnership will give the two operators access to each others’ network and allow them to provide IoT products and services across several key markets through a single global SIM card.
The agreement will also consolidate their respective positions in IoT in Europe, Latin America and China, three of the most important IoT markets in the world, the companies said in a joint statement. Enterprise customers of Telefonica and China Unicom will be able to easily and seamlessly deploy IoT products and services in these three regions with a single global IoT SIM card. By using a unified IoT connectivity management platform, they will be able to control connections globally and to localize IoT SIMs once they reach a certain geography (subscription swap), the pair said.
“We are leveraging IoT technologies to accompany our customers on their digital transformation journey, where IoT has a very important role to play. Telefónica IoT is named a Leader in Gartner’s Magic Quadrant for Managed M2M Services worldwide, maintaining that position we have held since inception four years ago…..Simplifying massive IoT deployments is key and therefore we are strengthening our ecosystem of partners. Our partnership with China Unicom will strengthen Telefónica’s capability to meet our global customer needs,” Telefonica chief IoT officer Vicente Muñoz said.
Enterprise customers will be able to enjoy these new IoT capabilities later this year, Muñoz added.
In related news, China Mobile has signed a deal with UK’s Vodafone, under which the pair have agreed to resell each other’s IoT services for the first time. The agreement, announced at the recent Mobile World Congress in Barcelona, will see each company share new IoT project opportunities with their partners.
Vodafone customers will be given access to China Mobile IoT SIMs for deployments in China, while China Mobile customers wanting to offer IoT-enabled products outside of China will do so via Vodafone’s Global IoT SIM and management platform.
Vodafone will manage all elements of the operational model for its customers including on-boarding, SIM and logistics as well as billing and support. The company will act as a single point of contact for its enterprise IoT customers wanting to move into China.
China Mobile will discuss the possibility for IoT sales opportunities with Vodafone for companies wanting to expand outside of China.
Dorothy Lin, China Mobile International’s head of mobile business partnership, said the collaboration with Vodafone will allow the Chinese mobile giant to offer customers the greatest possible reach of IoT services.
“Having reached over 200 million IoT connections last year, China Mobile aims to increase the connections by 60% in 2018,” Lin noted.
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References:
https://www.telefonica.com/en/web/press-office/-/telefonica-and-china-unicom-partner-in-iot
https://www.telecomasia.net/content/china-unicom-telefonica-simplify-iot-deployment-enterprises