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Taiwan Cellular Retakes 2nd Place in Telecoms Market
The fourth quarter of 2008 saw Taiwan Cellular reclaim second place in the Taiwanese market, having briefly lost that position to FarEasTone in Q3 08. Its resurgence was due in part to a 19k quarterly decline in FarEasTone's customer base - its worst figure for two years - but it was principally due to an excellent performance from Taiwan Cellular, which added 47k customers, the highest gain it has recorded since Q3 04. What was particularly impressive was the fact that the previous four quarters had seen progress that was at best sluggish, at worst negative. It finished 2008 with 6.27m customers, compared to 6.25m for FarEasTone.
Taiwan Cellular is dominated by contract customers, and Q4 08 saw contract net additions of 31k compared to 16k for prepaid. In fact, this was the first time since Q1 07 that the net contract gain had exceeded that of prepaid, with the previous four quarters all seeing net declines to the contract base. This left the contract percentage down 1.2pp year on year at 90.0%. The net annual drop for contract stood at 43k, compared to a 78k increase for prepaid, yielding an aggregate gain of 36k. This was less than half the 83k seen in 2007. In proportionate terms, positive growth was only just achieved with a 0.6% yearly increase, compared to the year-earlier figure of 1.4%.
The strong customer growth in Q4 came at some cost. Prepaid ARPU was down 7.9% compared to Q4 07 with a quarterly average of TWD 571 per month, while contract ARPU fell 4.6% to TWD 762. This left blended ARPU down by 5.2% at TWD 743. Usage actually rose, from 193 minutes per user per month in Q4 07 to 206 minutes in Q4 08, which implies a drop in the effective pricing per minute from TWD 4.06 to TWD 3.60.
This drop in ARPU, combined with a customer growth rate below 1%, implies a drop in revenues, and this was indeed the case. Fourth-quarter wireless revenues were down 3.6% to TWD 14.21m, while wireless EBITDA dropped 5.1% to TWD 5.96m.
Posted to the site on 5th February 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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