Chunghwa Remains Neutral - Analyst Blog
September 13 2011 - 4:15AM
Zacks
We reaffirm our Neutral
recommendation on Chunghwa Telecom Co. Ltd. (CHT)
following its solid performance in the second quarter of 2011.
Chunghwa is the dominant telecom operator in Taiwan. It holds 80%
of broadband market share, coupled with 96% of local fixed-line and
77% of long-distance fixed-line market share.
The company also commands 34% of
the Taiwanese wireless market share. A recent ruling of the
Taiwanese government has changed the pricing right of a
landline-to-mobile call in favor of the fixed-line operator from
mobile operator. This shift in government policy boosted Chunghwa’s
revenue. Management sets a yearly revenue target of approximately
$7.6 billion by 2015, which will be an improvement of 16% from
2010.
Chunghwa is trying hard to enter
into the Chinese telecom market. The company is also eyeing the
lucrative $33.3 billion Chinese cloud computing market. Chunghwa
has agreements with China Telecom Corp. Ltd. (CHA)
and China Unicom Ltd. (CHU) to access software
from their application stores to provide premium services to
subscribers.
Chunghwa is gradually expanding its
subscribers’ base for high-speed next-generation FTTx (fiber to the
home/building/curb) offerings. Chunghwa is investing heavily to
build a formidable FTTx (fiber-to-the-home/premises) network in
Taiwan. At the end of the second quarter of 2011, broadband
subscriber base was 4.44 million. Out of this, FTTx subscriber base
was 2.24 million, which accounted for 49.7% of total broadband
subscriber base.
HiNet subscriber base was 3.63
million. In the previous quarter, Broadband access (including ADSL
and FTTx) revenue was around $177.8 million, up 3% year over year.
The company is building large-scale fiber-to-the-home (FTTH) and
fiber-to-the-building (FTTB) access infrastructure and is aiming to
provide both these facilities to 75% of Taiwan’s population by the
end of 2011.
CHINA TELCM-ADR (CHA): Free Stock Analysis Report
CHUNGHWA TELECM (CHT): Free Stock Analysis Report
CHINA UNICOM (CHU): Free Stock Analysis Report
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