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[SOGO] Far EasTone looks to 5G to revive mobile revenue

Post Date 2019.11.07From:By Lisa Wang / Staff reporter

Far EasTone Telecommunications Co (FET, 遠傳電信), the nation’s No. 3 telecom operator, yesterday said it is counting on 5G services to bring its mobile revenue back on a growth track three to four years after its commercial launch next year, as consumers get used to the new services.

Major telecom operators, including Far EasTone, have seen mobile revenue decline over the past five quarters amid intensifying price competition.

The cutthroat competition arising from telecoms’ offering of NT$499 monthly unlimited data plan since May last year has dragged revenue growth, the company said.

“With 5G, we do expect a price uptick, but adoption will take time,” FET president Ching Chee (井琪) told an investors’ teleconference. “We do not expect it would turn around in a year... It will take three, or four years for a total turnaround, given that 5G is relatively new.”

The government is scheduled to hold auctions on 5G bandwidth on Dec. 10, paving the way for the service’s debut some time next year.

FET reported revenue of NT$62.65 billion (US$2.06 billion) for the first three quarters this year, down 2.64 percent annually from NT$64.35 billion, despite Apple Inc’s new iPhones boosting its subscriber numbers and mobile service demand.

To drive revenue growth, the company has been focusing on expanding its “new economy” businesses, which include cloud, Internet-of-Things and security related services, in addition to system integration projects for enterprises and government agencies.

Last quarter, revenue from new economy businesses grew 17 percent year-on-year, FET said.

They contributed about 12 percent to the company’s total revenue in the first three quarters and are on track to hit its target of 13.4 percent, FET said.

Profit margin on these businesses averaged 10 to 15 percent, it said.

FET is maintaining its projected capital spending of NT$8 billion for this year, though it has only spent half of the amount, or NT$4.3 billion, so far.

Net profit in the first three quarters declined 16 percent to NT$6.6 billion, compared with NT$7.89 billion a year ago.

That translated into earnings per share of NT$2.03, down from NT$2.38.