Chungwha Telecom records lower revenues amid increased competition in mobile sector

26 Jan 2017

Taiwanese multi-service operator Chungwha Telecom (CHT) has published its financial results for the quarter and full year ending 31 December 2016, revealing a year-on-year decline in revenue for both periods.

In Q4 2016 CHT generated a total turnover of TWD58.35 billion (USD1.83 billion), down 6.2% against the corresponding period a year earlier, of which the lion’s share (48.7%) came from mobile services. Total mobile revenue in 4Q16 fell by 8.7% to TWD28.39 billion, with the company attributing this decrease mainly to lower smart device sales and mobile voice turnover, the latter of which it said had been impacted by ‘increased market competition and VoIP substitution’. Full year revenue was down by 0.8% when compared to the preceding twelve-month period, standing at TWD230.01 billion.

With CHT reporting that cash flow from operating activities in the fourth quarter had risen by 15.7% y-o-y to TWD33.55 billion, it confirmed that as at 31 December 2016 it had cash and cash equivalents of TWD32.09 billion. Less positively, EBITDA in 4Q16 fell by 7.9% to TWD18.04 billion, while in FY2016 it was 3.9% lower, at TWD80.42 billion. Net income too was down, declining by 18.3% to TWD7.72 billion in the last quarter of the year, and by 6.5% to TWD40.03 billion for the full year.

CHT has outlined its guidance for the coming year, saying it expects total revenue to increase to TWD231.16 billion in 2017, while net income is forecast at TWD36.89 billion. Capital expenditure, including deferred projects from 2016, is expected to increase by TWD6.80 billion to TWD30.28 billion.

In operational terms, as at 31 December 2016 CHT had a mobile subscriber base totalling 10.79 million, down 3.5% y-o-y, though notably 4G accesses continued to account for a growing percentage of that total, reaching 6.71 million at the same date. CHT continues ’to execute its strategy of encouraging FTTx migration’, it says, and at the end of the reporting period the number of FTTx accesses on its books had increased to 3.48 million, representing 77.8% of its total broadband base. Further, the company highlighted the number of customers taking a high speed internet service, which offers speeds of at least 100Mbps, reached 1.17 million, an 11.1% increase against end-2015. Finally, although CHT said it had been able to maintain its ‘leading position in the fixed line market’, the total slumped 2% on an annualised basis to 10.94 million.

Taiwan, Chunghwa Telecom