TCC becomes Taiwan Mobile as subs fall but ARPU rises

4 May 2005

Taiwan Cellular Corp (TCC) has changed its name to Taiwan Mobile Company, and announced improved profitability from a decreased customer base in its first quarter report. TCC was incorporated in February 1997 as Pacific Communications Services and launched in competition with Chunghwa Telecom in December that year. It has since acquired majority stakes in rival operators TransAsia Telecom and MoBitTai, and has held a 3G concession since January 2003. Analysts have suggested that the company’s name change has much to do with it seeking a stronger brand name ahead of a possible launch of UMTS services around the middle of this year.

Taiwan Mobile lost another 103,000 subscribers in the first three months of 2005, as it continued to shed more of its ‘unproductive subscribers’. In 2003 the company made the conscious decision to ‘lay more emphasis on the average revenue per user (ARPU) than on the number of subscribers’, and has now lost 2.085 million users since June 2003. The cellco finished March 2005 with 4.724 million users – not including the estimated two million subscribers of TransAsia and MoBitTai – but saw its ARPU levels continue to grow. ARPU for the period was TWD804 (USD25.78), up from TWD754 at the end of 2004, and TWD639 in the corresponding period of last year. The company’s percentage of post-paid users leapt from 77.7% in 1Q 2004 to 87.9% at the end of 1Q 2005. Total revenues rose by 3.2% year-on-year to TWD11.375 billion, with EBITDA up 2.4% to TWD5.404 billion.

Taiwan Mobile also announced that its board of directors have approved an additional TWD1.3 billion to be spent on the rollout of the cellco’s 3G services, bringing investments in the next generation network to TWD3.8 billion for the year. Total capital expenditure for the year will be a revised TWD6.5 billion.