Taiwan's largest integrated telecom operator,
Chunghwa Telecom Co. Ltd.
), is facing intense competition in the core wireless market. The
telecom market in Taiwan is oversaturated and has become extremely
competitive following the implementation of certain telecom
Consequently, Chunghwa competes in a tough environment with two
other major service providers, Taiwan Mobile Company and Far
EasTone Telecommunications Co. Ltd. The wireless market size of
Taiwan is small in comparison to other regional country markets,
with approximately 23 million customers. At present, Taiwan has
115% wireless penetration.
Recently, Far EasTone became the first global wireless operator
to launch commercial 4G LTE (Long-Term Evolution) services on the
APT700 MHz spectrum. This marks a significant advancement in the
global wireless industry. The technology for this network was
LM Ericsson AB
). Far EasTone Telecommunications holds licenses for both APT700
and 1800 MHz frequencies.
Chunghwa has also won 2 slots of 1800 MHz spectrums to install
4G LTE wireless networks. The company plans to initiate LTE
deployment from mid-2014. Also, Chunghwa has struck a deal with
LINE, a developer of popular communication apps for smartphones.
This agreement will provide Chunghwa's mPro subscribers with free
mobile Internet service.
At the end of the first quarter of 2014, Mobile subscriber base
of Chunghwa stood at 10.78 million, up 4.1% year over year. Mobile
Internet subscriber base was 4.29 million, reflecting a significant
hike of 49.5% year over year. Chunghwa currently commands 35.6% of
the mobile Internet market share in Taiwan.
On the flipside, approximately 59% of Chunghwa's customers use
3G services, while around 71% of Taiwan Mobile's subscribers and
63% of Far EasTone subscribers use 3G services.
If wireless and Internet/data segments fail to gain adequate
business, Chunghwa's top line may be severely affected. Moreover,
Far EasTone's business cooperation agreement with
China Mobile Ltd.
) is likely to pose more competitive threat to Chunghwa.
In Dec 2013, Nokia Solutions and Networks (NSN), a division of
), renewed its contract withChunghwa to supply infrastructure for
the carrier's HSPA+ network capacity expansion. Chunghwa selected
NSN as its major vendor for LTE network deployment.
NSN will provide its RAN (radio access network) superior
technology, supported byFlexi Multiradio 10 Base Station to
Chunghwa. Further, it will deliver circuit-switched fallback
technology, which will support voice services for the company's LTE
smartphone users. Chunghwa currently has a Zacks Rank #3
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