Chunghwa Telecom Posts Profits Rise Despite Falling Revenues
Published on: 30th Apr 2014
By: Ian Mansfield
Taiwan's Chunghwa Telecom has reported its quarterly financials and announced a reduction in revenues but an increase in net profits.
Revenue fell by 2.8 percent to NT$55.06 billion, with declines across al areas of the business. The company revenue was comprised of 50.0% mobile, 11.1% internet, 31.1% domestic fixed, 6.9% international fixed, and 0.9% from other businesses.
Mobile business revenue for the first quarter 2014 decreased by 1.4% to NT$27.51 billion. Although mobile VAS revenue continued to grow, the growth was offset by the decrease in mobile voice revenue and handset sales. The decline of mobile voice revenue was due to market competition and promotional packages, while the decline in handset sales revenue was due to a higher proportion of sales derived from mid- to low-tier smartphones as compared to the same period last year.
As of March 31st, 2014, Chunghwa had 10.78 million mobile subscribers, representing a 4.1% year-over-year increase. The Company also had 4.29 million mobile internet subscribers, representing a 49.5% year-over-year increase, or an additional 1.42 million subscribers. Chunghwa accounted for 35.6% of the mobile internet market share as of March 31st, 2014.
Internet business revenue for the first quarter of 2014 increased by 1.9% year-over-year to NT$6.13 billion. The increase was primarily attributable to higher internet value-added service.
Domestic fixed revenue for the first quarter of 2014 decreased by 5.0% year-over-year to NT$17.15 billion. This was mainly due to the decrease in local and DLD service revenue, which decreased by 5.5% and 4.0% respectively because of increased mobile and VoIP substitution. Broadband access revenue stayed flat year-over year at NT$4.82 billion.
International fixed revenue decreased by 0.5% to NT$3.80 billion, mainly due to lower international long distance revenue because of market competition.
Other revenue decreased by 43.6%, primarily due to higher property sales and government information system construction revenue from our subsidiaries in the same period of last year.
However, net profit was up by 10.9% to NT$43.15 billion.
Dr. Rick L. Tsai, Chairman and CEO of Chunghwa Telecom stated, "Our key goal for this year is focused on business development, with an emphasis on the 4G, enterprise revenue, and fiber segments."