Value Added Mobile Services Projected to Boost 2012 Sales Revenue of Taiwan’s Top Three Telecom Carriers

Taipei, April 18, 2012 (CENS)–Value added services offered on mobile devices are estimated to bring Taiwan’s top three telecom carriers a total of NT$60 billion (US$2.06 billion at US$1:NT$29) in revenue this year, around 50% more than that they scored altogether last year.

Brisk sales of smartphones at Chunghwa Telecom Co., Ltd., Taiwan Mobile Corp. and Far EasTone Telecom Co., Ltd. have accelerated their revenues from value added services on the mobile computing devices. Last year, the services fetched the three providers a total of NT$40.5 billion (US$1.39 billion) in revenue.

Chunghwa raked in revenue of NT$15.2 billion (US$524 million) from value-added mobile services in 2011, while the other two scored NT$12.6-12.8 billion (US$434-441 million) from the services each.

In the first quarter this year, Chunghwa saw its revenue from the services rise 29.2% from a year earlier to account for 26% of its total revenue. The company projects the services to contribute NT$18-19 billion (US$620-655 million) of its annual revenue this year. Institutional investors even estimated the company to finish this year with revenue of NT$20 billion (US$689 million) from the services.

Far EasTone’s revenue from value-added services for the first quarter grew 48% from the same quarter last year.

Taiwan Mobile and Far EasTone separately projected smartphones to constitute 70% of their total procurements this year, up from 50% on their procurement list. Chunghwa recently revised upward smartphone’s percentage on its 2012 procurement list to 70% from 55%.

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NCC chair to give briefing on media merger principles

National Communication Commission (NCC) Chairperson Su Herng (蘇蘅) will brief lawmakers at the legislature’s Transportation Committee today on the principles governing the commission’s review of media mergers, with a special focus on the bid by Want Want Broadband to acquire cable TV services owned by multiple service operator China Network Service (CNS).

Democratic Progressive Party (DPP) Legislator Yeh Yi-jin (葉宜津), one of the committee’s two conveners of the committee, told the Taipei Times that the committee had officially invited Want Want Group Chairman Tsai Eng-meng (蔡衍明) to attend the meeting.

Yeh said many were concerned that the nation’s media outlets were owned by a handful of conglomerates.

She said Want Want-China Times Group, which already owns TV stations and newspapers, plans to branch out to the cable TV stations.

The CNS deal would enable the group to determine which channels were included in the cable TV service, which would directly affect viewers’ interests, Yeh said.

“We want to give Mr Tsai the opportunity to speak and see if he can alleviate people’s concerns,” she added.

Yeh said the fact that two of the four commissioners scheduled to review the merger had indicated their intention to resign had exacerbated the controversy.

“Among the seven commissioners, three withdrew from the case because they were publicly humiliated by the Want Want Group in its acquisition of the China Times Group in 2008,” she said. “The NCC explained that the final ruling [on the CNS deal] would still be valid even if it was made by four commissioners … Now two of the remaining four have said they want to resign.”

The commission last week said it would hold another public hearing early next month on the CNS bid, because it wanted to hear more opinions from different parties.

The following day, Want Want China Broadband issued a statement saying that Tsai would agree to attend the public hearing, which the company characterized as a “public trial” and a “struggle session” similar to those held during the Cultural Revolution in China.

That statement said Tsai would attend on the condition that the commission ruled on the case within two weeks of the hearing.

“Since last year, we have quickly and sincerely replied all of NCC’s questions on the concentration of media ownership, as well as other irrelevant matters [such as a report in the Washington Post that took Mr Tsai’s comments out of context],” the statement said. “We even used statistics to demonstrate that most of the calculations of media concentration are wrong, including those using the Hirfindahl index from the US or the method from the German Commission on Concentration in the Media. Excessive media concentration is not an issue in Taiwan, nor is there any media outlet that enjoys a monopoly here.”

Meanwhile, lawmakers at the legislature’s Internal Administration Committee also plan to question officials from the Mainland Affairs Council, the Ministry of Interior and the NCC today on how the government manages the content of advertisements from China.

DPP Legislator Lee Chun-yi (李俊俋) said he suspected the Fujian Provincial Government might have paid China Times to provide detailed coverage of the visit of Fujian Province Governor Su Shulin (蘇樹林) last month, when Su urged Taiwan to work with China on the joint development of the Pingtan Comprehensive Experimental Zone.

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HTC eyes cheaper smartphone market in China

Taipei, April 17 (CNA) Taiwan’s HTC Corp. launched several smartphones in China priced as low as 1,999 Chinese yuan (US$317) Tuesday in a bid to tap into the emerging mobile market.

The HTC launch in Beijing includes three smartphones in its customized New Desire series, which will go on sale from mid-April through three major Chinese telecom operators, according to a company statement.

The New Desire V, running on China Unicom’s 3G WCDMA network, will start from 1,999 Chinese yuan before subsidies, while the New Desire VC will support China Telecom’s CDMA 2000 frequency, for the same price tag.

Pricing for the New Desire VT, which will run on the country’s home-grown TD-SCDMA network provided by China Mobile, was not disclosed.

“The China market has always been a critical part of HTC’s global strategy. In addition to the HTC One series, we are introducing the New Desire series targeting Chinese consumers,” said Ray Yam, president of HTC’s China division.

“We believe HTC’s future is closely connected with China and that HTC will continue to bring the best experience and the most innovative smartphones to the country as soon as possible,” he added.

All the models in the New Desire series are equipped with a 4-inch display, a 1 GHz processor and a 5-megapixel camera, according to the company.

Separately, HTC said its new “One” family will also hit store shelves in China this month, with price tags ranging from 2,688 to 5,688 yuan.

The Taoyuan-based manufacturer is hoping that the streamlined models and an increased retail presence will help it boost its market share in China, which stood at only about 2 percent last year, according to analysts at Morgan Stanley.

Samsung, Nokia and Apple still have a strong lead in the high-end market, backed by brand premium and distribution strength, while local brands like ZTE, Huawei and Lenovo are strong in the sub-1,000 yuan segment, the analysts said.

Earlier this month, HTC reported first-quarter sales revenue of NT$67.8 billion, a drop of 33 percent from the fourth quarter of last year and down 35 percent from the same period of last year.

Its net income tumbled 70 percent year-on-year to NT$4.46 billion in the first three months of this year, while earnings per share dropped 71 percent to NT$5.35.
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Commission approves airing of Olympic Games on 11 channels

Taipei, April 18 (CNA) Taiwan’s National Communications Commission approved Wednesday an application by a local sports television network to air the 2012 London Olympic Games on 11 channels.

Elta TV, which is carried on Chunghwa Telecom’s MOD (multimedia on demand) system, will be able to broadcast the Olympic Games on the 11 approved channels, according to commission spokesperson Chen Jeng-chang.

Should Elta TV decide to cease its broadcasts on the channels after the 2012 Olympic Games have ended, it needs to file such a request three months in advance, Chen added.

The commission is still negotiating with terrestrial and cable television networks in the country to make sure the public will be able to view the Olympic Games through all major TV platforms, Chen stated.

Currently, only Elta TV and Chunghwa telecom have obtained the right to air the Olympic Games through new media platforms, such as mobile phones and Internet Protocol Television, which is digital footage delivered on a person’s television through a high-speed Internet connection.

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HTC promises to fix flaws in flagship phone

Taipei, April 18 (CNA) Taiwan’s HTC Corp. said Wednesday that it will help local users of its One X smartphone to obtain redress for flaws in the product after media sources reported a discoloration problem with the flagship model.

Taiwan-based weekly Next Magazine reported that day that some local users of the One X, a 4.7-inch model unveiled in February, had found several yellow spots under the phone’s screen.

The problem has drawn a slew of complaints on the Internet, prompting HTC Chairwoman Cher Wang to order the company to help consumers replace the flawed products with new phones, according to the report.

In response to the news, HTC said it will deal with the problem in order to provide its consumers with good user experiences.

“A few consumers have expressed their opinions about the product. We’ve already taken measures to fix related problems and will help consumers to solve this issue,” HTC said in an email reply to CNA.

The media report came a day after HTC launched a lineup of new phones in China priced as low as 1,999 Chinese yuan (US$317) to tap into the emerging mobile market.

The six models include the HTC One series and its customized New Desire series, which will go on sale this month through major carriers including China Mobile, China Unicom and China Telecom.

On April 16, HTC appointed Chang Chia-lin as its chief financial officer and spokesman after the world’s No. 5 smartphone maker reported a 70 percent year-on-year drop in net income in the first quarter.
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Far EasTone beats peers in Q1 mobile data revenue growth

Taipei, April 21 (CNA) Far EasTone Telecommunications Co., Taiwan’s third largest mobile provider, has recorded higher growth in mobile data revenue than its bigger competitors in the first quarter of this year.

Far EasTone reported mobile service revenue of NT$14.57 billion (US$495 million) in the first three months of this year, with mobile data revenue accounting for 27.4 percent, the company said in a statement Friday.

Its mobile data revenue totaled NT$3.99 billion in the first quarter, an increase of 48 percent from the same period of 2011.

Far EasTone’s 48 percent annual growth was higher than the 29.2 percent of Chunghwa Telecom Co. and the 40 percent of Taiwan Mobile Co., the country’s top two mobile providers.

Meanwhile, Far EasTone’s data service subscribers reached 1.81 million as of March this year, representing an annual growth of 63 percent.

The company expects both its mobile data revenue and subscribers will continue to grow in the future thanks to the sales of smart handheld devices.

From January to March, smartphones and tablet PCs accounted for 79 percent of Far EasTone’s total mobile device volume sales.

Phones running Google Inc.’s Android software remained Far EasTone’s best-sellers by taking 60 percent of its total smartphone sales, while iPhone accounted for 25 percent, the company said.

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Asustek acquisition approved by Fair Trade Commission

Taipei, April 19 (CNA) The Fair Trade Commission said Thursdaythat it had approved an application filed by Asustek Computer Inc., one of Taiwan’s leading personal computer vendors, to acquire a stake in local integrated circuit developer uPI Semiconductor Corp.

In giving its approval, the commission said, it ruled out thepossibility that the acquisition will hamper market competition.

In February, Asustek announced its intention to acquire a 49.5percent stake in uPI for NT$438 million (US$14.84 million) as partof the IC firm’s fundraising activities.

Upon the acquisition, the uPI stake owned by Asustek will rise to 53 percent and the PC vendor is expected to control the board of directors of the IC developer and take more than half of its supervisor seats.

Under the current Fair Trade Act, a transaction that would result in the acquirer holding a stake of more than 33.3 percent in the company to be acquired or taking more than half of the director and supervisor seats requires review.

The commission said the acquisition deal is a vertical integration,since Asustek’s main products are notebook computers, desktop computersand mother boards, while uPI’s major product is analog ICs.

It noted that Taiwan has long been focusing on digital IC development rather than analog IC development, which has meant that many local high-tech manufacturers depend on large analog supplies fromforeign developers to satisfy their demands.

Even after the acquisition, the commission said, Asustek is unlikely to stop its purchases of analog ICs from abroad, so market competition is not expected to be undermined.

For the PC market, which has witnessed ever-fiercer competition from both local and foreign vendors and manufacturers, the acquisition of the uPI stake is not expected to help Asustek stifle competition at home or abroad, the commission said.

Now that the application has been approved, the commission said, the acquisition is expected to benefit the economy as a whole.
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Computex Taipei to highlight GPS applications

Taipei, April 18 (CNA) The upcoming Computex Taipei, the world’s second largest computer trade show, will highlight applications and products involving the global positioning system (GPS), a local computer association said Wednesday.

There will be a designated area showcasing the development of the system that can be applied to many fields, including traffic, merchandise shipment and medical treatment, said the Taipei Computer Association, which is organizing the event.

Recognizing the growing importance of GPS products, the association said it hoped the show will be used as a platform to initiate business cooperation among local and foreign companies, especially in GPS tracking services and telematics.

Citing a report from market intelligence company ABI Research, the association said sales of personal GPS tracking devices and associated services could surpass US$1 billion in 2017, with a compound annual growth rate of 40 percent.

Although fewer than 100,000 GPS tracking devices were manufactured in 2011, the number is expected to grow every year before reaching 2.5 million units by 2017, the report said.

Computex Taipei, which will be held June 5-9, will feature Ultrabooks, smart handheld devices, e-readers and cloud technology services, according to the association.

A total of 1,800 exhibitors at 5,400 booths are expected to participate, which would make the show bigger than ever before, the organizers said.

The show is expected to attract more than 36,000 international buyers and generate US$28 billion in business, up from US$25 billion in 2011, the organizers added.

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Asustek, Acer enjoy higher growth in Q1 Asian PC market

Taipei, April 22 (CNA) Taiwan’s Asustek Computer Inc. and Acer Inc. have shown better-than-average growth in the weak Asia-Pacific PC market, excluding Japan, in the first quarter of 2012, according to research firm International Data Corp. (IDC).

From January to March this year, PC shipments in the region totaled 29.4 million units, down 2 percent from the fourth quarter but up 3 percent from a year earlier, IDC said in a recent report.

Asustek remained very aggressive in China as well as in the Association of Southeast Asian Nations, helping its shipments grow 40 percent from the first quarter of 2011, the highest growth among the top five players, the report said.

Second-place Acer also posted a 26 percent annual growth in shipments, with top vendor Lenovo’s shipments increasing 24 percent from a year ago, it added.

Hewlett-Packard Co. managed to regain some lost momentum in China, though its shipments declined 13 percent year-on-year, while shipments of Dell inc. dropped 6 percent year-on-year, despite a strong fourth quarter.

Acer is scheduled to report its first-quarter shipments and financial results to investors on April 26, and Asustek will release its financial report on April 30.

“While this quarter’s growth was abnormally low, it was good to see that the industry was generally able to work around supply constraints to keep the market moving,” said Bryan Ma, a Singapore-based analyst with IDC.

“Looking ahead, there are still some risks around the economy and channel inventory, but there are also a number of public sector projects, as well as new platforms like Windows 8 and ultra-slim notebooks, that can push the market ahead in 2012,” he said.

According to IDC’s report, Lenovo continued to outperform rivals in the first quarter with a 21.8 percent market share, as shipments for a large education notebook project in India helped it maintain momentum, despite a seasonal slowdown in China.

Acer ranked second with a 12.0 percent share, followed by HP at 9.1 percent, Dell at 9.0 percent and Asustek at 8.2 percent, the report said.

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NFB radio frequency use for eTag system approved

The National Communications Commission yesterday approved an application by the National Freeway Bureau (NFB) to use a radio frequency for its eTag system, adding that the commission reserved the right to annul the operational license if the bureau fails to address interference that the system could cause to 2G or 4G telecoms networks.

Commission spokesperson Chen Jeng-chang (陳正倉) said the operational license would be granted to the bureau only after the commission inspects and certifies the infrastructure of the eTag system.

In response, bureau officials said it would take another two to four weeks before they could obtain the official operational license to use the frequency. The inevitable administrative procedure is expected to pose a challenge for Far Eastern Electronic Toll Collection Co, the contractor in charge of collecting freeway tolls on behalf of the government.

Based on the terms stated in the build-operate-transfer contract, the company must raise the usage rate of its electronic toll collection system to 65 percent by June or it will face a daily penalty of NT$500,000.

The usage rate of the electronic toll system, which was launched in 2006, is about 44 percent, which is 21 percent below the target with just two months left.

The commission said the bureau had applied to use a frequency band between 922.75 megahertz (MHz) and 924.25MHz for its eTag system, which enables it to charge motorists by the distance traveled on freeways.

The commission began reviewing the application in February. However, it had been reluctant to approve the application for fear the eTag system could interfere with the operations of 4G networks because the two systems would lack an adequate buffer.

The nation has reserved the frequency range above 930MHz for the development of 4G networks, which leaves a gap of 5.75MHz from the higher end of the eTag system.

So far, there is no evidence that the eTag system would interfere with the 2G network.

Yesterday’s approval came with several conditions. The operational license for the eTag system will expire on Dec. 31, 2014. Should the eTag system cause interference with 2G or 4G networks, the bureau would be required to improve the situation within a designated period of time. The commission would have the right to take back the frequency band assigned to the bureau if the interference persists.

If the eTag system is found to conflict with the 4G network, the bureau should also keep its promises made to the commission, including moving the toll–collecting gantries away from areas with weak 4G signals, installing base stations on the gantries to strengthen 4G signals and lowering the power of the eTag system.

The bureau should entrust a reliable third-part organization with task of proving that the ETC system will not clash with the 4G network, adding that the report must be submitted within six months after it obtains the license from the NCC.

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