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Chunghwa and Taiwan Mobile Q1 2008 Results
TaiwanÃ's two largest mobile companies, Chunghwa Telecom and Taiwan Mobile, both released first quarter results this week. In fact, the results show that whilst Chunghwa maintains a clear premium over the competition of 2.5m customers at the top of the market, Taiwan CellularÃ's lead over its nearest rival, third-placed FarEasTone, fell to just 2,070 customers at the end of March. The operator suffered its first negative net additions since Q1 06, losing 6,500 customers to finish the quarter on 6.228m, just ahead of FarEasTone with 6.226m.
The second worrying aspect of the results for Taiwan Mobile managementt will be the source of the growth that it has enjoyed. Over the year to 31s March 2008, the company added 56k new connections as a result of increasing the number of prepaid connections by 83k and losing over 26k contracts. By contrast, Chunghwa managed to reduce its already small prepaid base by 22k in the year, whilst netting 208k new contracts to end up with 186k more customers than 12 months ago. At that time, both operators enjoyed a similar proportion of contract customers, with Chunghwa on 92.4% and Taiwan Mobile on 92.1%. The divergence in fortunes since then has seen Chunghwa move on to an improved rate of 92.7%, whilst Taiwan Mobile has been diluted to 90.9%.
Taiwan Mobile, however, would be the first to point out that customer growth is not the be-all and end-all. By a small margin, first quarter mobile revenue growth at the smaller operator trumped that at the market leader at 0.97% to 0.81%, as Q1 ARPUs declined by just 0.4% year on year, compared to 2.0% at Chunghwa.
What the two operators shared was the fact that the non-mobile parts of their businesses were better performing than the mobile parts. Chunghwa registered a 12% increase in overall first quarter turnover, whilst Taiwan Mobile - largely thanks to the full consolidation of wireline business Taiwan Fixed Network this year - managed 19%. It is, however, still just one third the size of Chunghwa, with revenues of NT$17.2bn for Q1 08, compared to the NT$51.0bn posted by its larger competitor.
Posted to the site on 8th May 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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