Far EasTone not interested in a price war

Far EasTone Telecommunications Co (遠傳電信) yesterday said it has no intention to engage in a price war after Taiwan Star Telecom Corp (台灣之星) recently offered deep discounts to attract 5G subscribers.

FET president Chee Ching speaks at the company’s annual general meeting in Taipei yesterday. Photo courtesy of FET

Taiwan Star last month rolled out a NT$599 (US$20.16) per month plan for unlimited 5G data services, saying that the package was a 42 percent discount compared with the NT$1,399 other telecoms charge for a similar service.

“When competition heats up, people will come up with various approaches to cope. At the end of the day, they have to calculate if offering lower prices will enable them to keep turning a profit,” Far EasTone president Chee Ching (井琪) said.

Taiwan Star and Asia Pacific Telecom Co (亞太電信) are offering cheaper plans to attract subscribers and expand their market shares, but such a strategy would prove futile as companies seek merger-and-acquisition deals to survive, given insufficient bandwidth and network coverage, as well as unsatisfied subscribers, Ching said.

Far EasTone has submitted applications to the National Communications Commission and Fair Trade Commission to merge with Asia Pacific Telecom in a share swap worth about NT$24.7 billion, Far EasTone said.

Taiwan Mobile Co (台灣大哥大) is seeking to acquire Taiwan Star for NT$28.2 billion.

“I believe the competition will be healthier and normal, since the three existing companies will be of similar size,” Ching said. “For consumers, price is not the only consideration... We will not compete irrationally.”

With the launch of a NT$499 rate plan for unlimited 4G services in 2018, the ensuing price war among local telecoms led to declining revenue for three consecutive years.

Separately, Far EasTone’s shareholders yesterday approved the distribution of a cash dividend of NT$3.25 per share, including a portion from its surplus capital. That represented a payout ratio of 116 percent compared with last year’s earnings per share of NT$2.8.