Profits fall at Taiwanese telco giant

Chunghwa Telecom, Taiwan's largest telecoms company, suffered a slight fall in profits in the last quarter of 2007, the company announced today.

While Chunghwa saw strong growth in sales of internet and related services, revenue from mobile and legacy phone operations remained static or fell.

Net profit for the quarter reached $375m on revenue of $1.74bn. Revenue for the whole of 2007 was $6.67bn, up 7.8 per cent from the previous year.

Three main service areas each generate approximately one third of the company's revenue: fixed-line services, mobile services, and internet and data services.

"Internet and data revenue in 2007 was 5.8 per cent higher than in 2006, driven by continued total broadband subscriber growth and broadband speed upgrades," the company said in a statement.

Unlike Japan and Korea, both of which began ultra high speed fibre internet services to home users eight years ago, Chunghwa only began a large scale roll out of high speed fibre optic internet services to urban homes 18 months ago.

The company uses fibre optic lines to bring data connections to buildings and neighbourhoods. Existing phone line infrastructure is used to cover the remaining distance to individual homes.

Typical fibre services offer home users a maximum 10Mbps download at a price of around $40 per month. Higher speeds of up to 100Mbps are available.

As Taiwan's former telephone monopoly, Chunghwa remained in possession of the country's fixed phone lines and other infrastructure after privatisation.

This has led to accusations of unfair competition from the island's other telecoms firms, and complaints from consumers that the company deliberately held back Taiwan's internet development to protect profits from its legacy services.