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[FET] Far EasTone looks to ‘new economy’ for revenue

Post Date 2019.03.26From:Taipei Times By Lisa Wang / Staff reporter

Far EasTone Telecommunications Co Ltd (遠傳電信) aims to boost the revenue contribution of “new economy” services to 20 percent over the next three to five years to limit the impact of eroding traditional services, the telecom said yesterday.

To stem a revenue slide, Far EasTone last year set up a “transformation office” to step up overhaul efforts, as the company looks primarily to “new economy” services — businesses related to big data, artificial intelligence and the Internet of Things (IoT) — to increase revenue sources.

Leveraging those technologies, Far EasTone provides cybersecurity solutions, cloud-based solutions and IoT services for enterprise customers, as well as digital services such as online music streaming and mobile commerce for consumers, the company said.

“In Taiwan, traditional telecom service revenue began sliding in 2015. From 2016 to 2017, telecom services in Taiwan fell 3 percent,” Ching Chee (井琪), Far EasTone’s new president and acting head of the transformation office, told the media yesterday.

The company’s revenue unexpectedly fell at a faster rate last year, more than 5 percent year-on-year, after the nation’s biggest telecom operator, Chunghwa Telecom Co (中華電信), triggered a major price war by slashing the threshold for 4G subscription services to NT$499 a month.

The extremely low flat rate cut into the financial performance of every telecom last year, Ching said, adding that the nation’s “major players feel the need to transform themselves and speed up their efforts.”

“Regarding transformation, we do not intend to shed our role of being a traditional telecom service provider, but we intend to go beyond that role. We want to offer more services than just offering SIM cards and mobile phones,” she said.

Far EasTone expects the contribution from its “new economy” businesses to increase to 13.5 percent of total service revenue this year, from 10 percent last year, thanks to growing Internet traffic, rising demand for curbing cyberattacks and local manufacturers’ increasing desire to improve efficiency and cut costs by adopting automation systems, she added.

“The nation’s IoT market is just waking up,” Ching said. “The pie will grow to 20 percent within three to five years.”

By that time, the percentage of Far EasTone’s technicians employed in “new economy” services would rise to 30 percent, from 20 percent now, she said.

Asked about the price war, Ching said that “it was not our strategy to start a price war.”

The price war “will eventually die down,” she said, adding that recent low-price promotions by local rivals have interested fewer consumers.