Chunghwa posts strong 2015 growth, but outlook is negative - Mobile World Live

Chunghwa posts strong 2015 growth, but outlook is negative

29 JAN 2016

Taiwan’s largest operator Chunghwa Telecom posted solid profit and revenue gains last year as its 4G user base more than tripled and mobile internet revenue expanded 13.5 per cent in Q4.

Chunghwa chairman and CEO Rick Tsai said it increased its overall market share 1 point to 38 per cent last year. It also accounted for 41 per cent of the country’s total 4G connections, according to GSMA Intelligence.

“Despite numerous headwinds in the broadband business, such as intensifying cable competition and 4G substitution, we managed to grow ARPU and increase revenues by upgrading subscribers to higher speed services,” he said.

But its outlook for 2016 is negative. The operator is forecasting revenue to edge up just 0.7 per cent to TWD233.5 billion ($6.99 billion) and net profit to fall 6.6 per cent this year.

After adding nearly three million 4G customers in 2015, for a total of 4.4 million, it aims to sign up another two million 4G users this year. At the end of last year, 39 per cent of its 11.2 million customers were 4G users. Internet subscribers expanded 15.7 per cent to 5.97 million over the past year.

Profit and revenue climb
Its Q4 net income expanded 17.3 per cent to TWD9.5 billion, while net income for the full year was up 10.9 per cent to TWD42.8 billion. EBITDA last year increased 6.2 per cent to TWD83.8 billion, and its EBITDA margin rose to 36.2 per cent compared with 34.8 per cent for 2014.

Overall Q4 revenue rose 4.3 per cent to TWD62.2 billion, with mobile accounting for 50 per cent of the total. A 7.5 per cent increase in mobile revenue to TWD31.08 billion was driven mainly by growth in mobile VAS (up 8.4 per cent) and higher smart device sales (up 17.7 per cent), but was partially offset by a decrease in mobile voice revenue. Mobile internet revenue rose 13.5 per cent year-on-year during the quarter.

Total revenue for the full year was up 2.3 per cent from a year ago to TWD232 billion, with mobile revenue increasing 3.8 per cent, mobile VAS expanding 13.8 per cent and smart device sales up 2.2 per cent.

Operating expenses for 2015 fell by 0.6 per cent year-on-year to TWD181.3 billion, which the operator said was mainly due to an increase in interconnection and depreciation expenses.

With its 4G network covering 99 per cent of the population, Q4 capex fell 17 per cent to TWD9.6 billion, with 33.4 per cent allocated to mobile and 35 per cent going to domestic fixed-line communications. For the full year, capex, which was far below budget, was down 23 per cent year-on-year to TWD25.08 billion. It has set the capex this year at last year’s budgeted level of TWD30.6 billion.

Tsai said it plans to deploy three-band carrier aggregation (CA) this year after acquiring 30MHz of 2.6GHz paired spectrum in December. It holds 130MHz of spectrum in the 900MHz, 1.8GHz and 2.6GHz bands.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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