Taiwan Chunghwa Telecom Lowers Call Costs

TAIPEI -(Dow Jones)- Chunghwa Telecom Co. said Wednesday it will cut the fees it charges for mobile-to-fixed line services by an average of 7% effective Dec. 1, a move it doesn't expect to affect revenue much.

Mobile-to-fixed line services contribute no more than 15% of Chunghwa Telecom's revenue, said Fu-fu Shen, the company's investor relations director.

Shen's remarks came after Taiwan Premier Frank Hsieh disclosed the company's planned price cuts in a televised announcement.

Chunghwa Telecom is the largest Taiwanese phone services provider by revenue.

The price cuts range between 3% and 15% and will save Chunghwa's customers NT$800 million annually, Hsieh said.

According to the island's Telecommunications Act, companies that are designated Type 1 telecommunications enterprises must seek approval from the Ministry of Transportation and Communications for any fee changes.

Type 1 operators are those that own telecommunications infrastructure, and include Chunghwa Telecom and Taiwan Mobile Co., said an official at the transport ministry's Department of Post and Telecommunications.

The company is still expected to exceed its previous revenue estimate, Shen said, but she declined to say how the company's profit would be affected by the cuts.

The company said in April it expected revenue this year to be NT$180 billion and net profit to be NT$42.34 billion.

Chunghwa Telecom's revenue in 2004 was NT$182.56 billion, while its net profit was NT$49.87 billion.

Its revenue in the first nine months of 2005 totaled NT$136.92 billion, including mobile service revenue of NT$54.6 billion, Shen said.

According to a Dow Jones Newswires calculation, an average 7% cut in mobile-to-fixed services fees would lower Chunghwa Telecom's annual revenue by NT$764.4 million.

-By Alex Pevzner, Dow Jones Newswires; 8862-2502-2557; alex.pevzner@dowjones.com

-Edited by David Riordan and Andrew Bullard

(END) Dow Jones Newswires "

Posted to the site on 9th November 2005