Far EasTone Telecommunications Co (遠傳電信), the nation’s third-largest telecom operator, is likely to cut mobile phone purchases by as much as 15 percent this year as consumers tighten their purse strings amid a bleak economic environment, a company executive said yesterday.
With overall handset sales in the country expected to decline this year, Far EasTone would be careful about its handset procurement to avoid an inventory build-up, Samuel Yuan (袁興), a vice president at Far EasTone, told reporters.
Yuan said that based on rough internal estimates by the company, its handset sourcing this year could drop by between 10 percent and 15 percent from a year ago.
Last year, Far EasTone bought 1.4 million cellphones, which were bundled with its telecom services for sales to new subscribers or customers renewing their contracts.
The company plans to adjust its handset portfolio by cutting pricey models, while broadening the selection of entry-level phones this year as consumers become more price sensitive amid the economic downturn, it said.
Far EasTone also announced that it had nailed an agreement to exclusively sell Fuiji Ltd’s mobile phones in Taiwan, marking the Japanese electronics manufacturer’s first step in expanding its handset business outside its home market.
“The Year of the Ox will not be very bullish,” Far EasTone vice chairman Jan Nilsson said, with customers becoming “more cautious about making a decision on using new telecom and multimedia services.”
Nilsson attributed the change in consumer’s spending habits to the economic slowdown.
The global economic crisis has taken a toll on Taiwan’s economy since the second half of last year and the outlook for many sectors, including the high-tech industry, looks grim, Nilsson said.
The effect would spread to the telecom industry, he said, adding that voice usage had dropped.
Nilsson, however, believed that the damage wrought by an economic slowdown on the telecom industry would be less severe as the industry provides an essential service.
“People still have to communicate,” he said.
Taiwanese telecom companies may see flat or a slight drop in their mobile revenues this year, Nilsson said.
As for Far EasTone, he said he remained optimistic, which is why Far EasTone has no plans to drastically trim its capital spending nor aggressively change its strategy.
Far EasTone usually allocates about 12 percent of its service revenue to new network buildup.
Separately, Far EasTone, which also won a WiMAX license in July 2007, said it planned to commercially launch the high-speed service by the end of this year, with Taichung being the first stop.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS