Chunghwa Telecom expects drop in mobile revenue despite 5G push

Chunghwa Telecom has released its guidance for 2020 – indicating that mobile operator will launch 5G services this year.
Chunghwa Telecom Taiwan
Chunghwa Telecom earlier said that it will build 5G trial network in association with Nokia, Finland-based telecom network maker, in 2018 and 2019 for launching pre-commercial 5G network in 2020.

“The leading market position of our mobile business provides us with a strong foundation for the upcoming deployment of 5G. The first phase of the 5G spectrum auction was completed recently, and we plan to launch 5G services in the third quarter of 2020,” Chi-Mau Sheih, chairman and CEO of Chunghwa Telecom, said.

Chunghwa Telecom, as part of the existing strategy, will be migrating broadband customers to high-speed services to capture incremental ARPU. It will leverage sports events such as the upcoming Tokyo Olympic Games, to grow both subscriptions and revenue in IPTV business.

Chunghwa Telecom expects revenue to increase by NT$ 6.58~NT$7.77 billion, or 3.2-3.7 percent to NT$214.10~NT$215.29 billion in 2020 — driven by increase in ICT project revenues, application VAS revenues, handset sales revenue and MOD revenues.

Chunghwa Telecom expects decrease in revenue in voice business due to VoIP substitution and drop in mobile service business revenue as result of market competition.

Operating costs and expenses are expected to increase by NT$ 8.77~NT$9.09 billion, or 5.3-5.5 percent to NT$175.51~NT$175.83 billion – due to increase in ICT project costs, cost of goods sold and amortization expense of 5G concession and related costs following the launch of 5G services.

Chunghwa Telecom’s income from operations is expected to decrease by NT$ 2.16~NT$0.45 billion, or 5.3-1.1 percent.

Chunghwa Telecom said Acquisition of Material Assets is expected to increase by NT$52.54 billion due to the acquisition of 5G licenses, expansion of 5G network, strategic investments in IP-based Public Switched Telephone Network and the upgrade of MOD platform.