Chunghwa is setting up a joint venture with Chinese telco
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- Published on Friday, 24 June 2011 17:16
The largest telephone company in Taiwan by revenue has been expanding in Southeast Asia and China in recent years because of a saturated domestic market.
Chunghwa Telecom has an agreement with China Telecom Corp. to share resources and another with China Unicom (Hong Kong) Ltd. to cooperate on value-added services including sharing application stores.
But Lu said these agreements are only the "first steps" to accessing the Chinese market, adding joint ventures as the necessary next step.
"We are still considering and waiting to find an opportunity that suits us...agreements like a memorandum of understanding are a starting point, but they don't produce any concrete results, for that we need a joint venture," he said.
The company plans to further develop applications and software in Taiwan before moving them to a cloud platform in China, Lu said. Other potential opportunities in China include value-added services and an expansion of cloud computing, he said.
Lu also said Southeast Asia was the other primary area of interest for Chunghwa Telecom. The company's Internet data center services joint venture with Vietnam's Viettel Corp. will likely become a unit of the company before the end of the year, he said.
Lu said Chunghwa Telecom doesn't have any capital reduction plan for 2011 and expects to meet its second-quarter earnings forecasts, including a revenue target of NT$47.5 billion, which would be down from NT$49.7 billion in the same period a year earlier and NT$52.48 billion in the first quarter of this year.
But he said the company's full-year earnings forecasts, including a 1.94% growth in 2011 revenue to NT$190.0 billion, could prove challenging given pricing pressures due to price controls on inter-operator phone calls and growing competition in Taiwan. He added the company would have to increase sales and value-added services to make up the gap.
In Taiwan, the company needs to continue to build out bandwidth, increase the speed of its Internet offerings, provide more wireless access, and continue to develop value-added services to remain competitive, he said.
(Totaltele)
