Taiwanese operators Chunghwa Telecom, Taiwan Mobile and Far EasTone are beginning to trim capex two years after launching 5G services, with the technology delivering earnings gains for the better part of eight quarters.
A pending merger between Taiwan Mobile and Taiwan Star, and a Far EasTone tie-up with Asia Pacific Telecom (APT) are awaiting final approvals before they can move to consolidate their RANs.
Far EasTone said in March integration with APT will enable it to shut down at least 5,000 base stations to eliminate overlap.
Chunghwa Telecom recorded the most impressive numbers, booking improved profitability and rising revenue across all segments.
Mobile service revenue increased 6.6 per cent year-on-year to TWD15.8 billion ($512.9 million), mainly due to rising post-paid subscribers and steady migration to 5G.
Its mobile user base grew 6.1 per cent to 2.7 million and post-paid ARPU 4 per cent to TWD536.
Chairman and CEO Kuo Shui-Yi noted on an earnings call it beat all financial targets despite macroeconomic uncertainties.
He said it maintained year-on-year mobile growth for 21 consecutive months, adding subscription and advertising revenue from its on demand multimedia service, combining 5G and 4D multi-angle broadcasting to cover the World Baseball Classic, accelerated.
Net profit increased 6.4 per cent to TWD9.6 billion.
Mobile-related capex dropped 34.8 per cent to TWD1.5 billion.
Taiwan Mobile posted its fastest growth since launching 5G service in mid-2021. Mobile service revenue increased 5.4 per cent to TWD12.6 billion, on conversion of LTE users to 5G, improved 4G pricing and growth in roaming revenue.
Post-paid ARPU improved for the 22nd consecutive month, rising 1.8 per cent to TWD664, attributed to demand for bundles combining mobile service, devices, content and its MoMo e-commerce offering.
On an earnings call, president Jamie Lin highlighted steady gains from customers upgrading from 4G to 5G, a trend he doesn’t expect to go away any time soon.
A double-digit increase in handset bundles sold fuelled 12 per cent growth in device sales to TWD5.1 billion.
Post-paid subscribers rose 3.4 per cent to 6.1 million, with its overall user base up 2.6 per cent to 7.5 million.
Net income remained at TWD2.7 billion, due to currency fluctuations and rising interest rates.
Capex was TWD2.4 billion compared with TWD2.3 billion in Q1 2022 and it added 3,000 5G base stations in the 700MHz band.
Its full-year capex is set to decline.
Far EasTone registered its eighth consecutive quarter of mobile service revenue growth, up 3.3 per cent to TWD12.7 billion.
ARPU was up 3.1 per cent to TWD732.
On its Q1 earnings call, president Chee Ching declared all KPIs exceeded guidance as annual growth continued, driven by steady 5G customer upgrades to 5G plans, and a recovery in roaming and prepaid revenue after Covid-19 (coronavirus) impacts.
While the operator didn’t disclose 5G numbers, subscribers to the next-generation service accounted for 34 per cent of its total post-paid user base of nearly 5.5 million at end-March, compared with 25 per cent in Q1 2022.
Net profit, excluding one-times gains, rose 12.2 per cent to TWD2.8 billion.
Full-year capex is forecast to drop 10 per cent to TWD9 billion.
Marc Einstein, chief analyst at Japan-based research company ITR, told Mobile World Live Taiwanese operators had been more aggressive with 5G pricing, for example offering 24GB of data access and free calling, while Chinese operators limit calls and South Korean counterparts have various data caps.
In Taiwan, Einstein noted signs of “the early adopter spikes we saw in other markets a bit later here, particularly as coverage improves. However, operators have been more successful with bundling and loyalty programmes”.
Mei Lee Quah, director of ICT research at Frost and Sullivan, suggested Chunghwa Telecom’s previously internal restructuring to better support targeted new services helped its performance.
Quah noted the operator is prioritising development of new experiences including interactive services. She pointed to the company using 5G technology for high-quality multi-viewing at 4K and HD.
With the overall industry viewing consolidation as a positive move for market competition, coupled with steady 5G adoption driving service revenue growth, Taiwan’s mobile market looks positioned for continued growth.
The three operators showed generating gains from 5G rollouts is not just about wide coverage: it comes down to offering value to encourage customers to upgrade, be it through attractive data packages, new service bundles or differentiated content.