Taiwanese operators Chunghwa Telecom and Far EasTone significantly raised their planned 5G investments 2021, targeting rapid uptake of the next-generation service and a boost in the top-line.

Chunghwa Telecom raised its capex budget 85 per cent year-on-year to TWD43.1 billion (US$1.5 billion), while rival Far EasTone earmarked TWD14.4 billion, up 32 per cent. Those increases push the capex to revenue ratio to 20.6 per cent for Chunghwa Telecom and 17.5 per cent for Far EasTone, up from 11.2 per cent and 13.7 per cent respectively in 2020.

President of Chunghwa Telecom, Harrison Kuo recently said it will accelerate 5G network deployment to “ensure our network speed and quality remain ahead of our peers” to expand its subscriber base, while increasing overall mobile service revenue.

He said the number of 5G sign-ups exceeded its 2020 target, but didn’t offer a total. It aims to add 2 million this year, which would take penetration to around 22 per cent (assuming it ended 2020 with a similar number as rivals). It has 11.3 million mobile subscribers.

Far EasTone president Chee Ching said its capital spending would peak this year as 5G coverage grows from 62 per cent at the end of December 2020 to 90 per cent. After that capex increase, he said it will be “the last leg with a few more thousand base stations, which should complete the total network”.

It closed 2020 with just under 500,000 5G subscribers and targets penetration of 25 per cent to 30 per cent by the year-end, which would amount to between 1.8 million and 2.1 million additions.

Revenue is forecast to rise 3.5 per cent TWD82.3 billion, driven in part by a 15 per cent rise in ARPU for new 5G subscribers. Chee said the vast majority of these customers have signed up for higher rate plans, which start at TWD999.

Meanwhile, Taiwan Mobile president Lin Zhichen said between 1 per cent and 1.5 per cent of mobile subscribers are moving to 5G plans each month. It signed up 465,000 in 2020 since launching the service in June. Total subscribers numbered 7.26 million subs at end-December 2020.

Revenue is forecast to increase 12 per cent to 15 per cent.

Stable investment

The operator plans to raise capex marginally to TWD11.8 billion, after a 62 per cent year-on-year hike in 2020 to TWD11.5 billion.

It ended 2020 with about 6,000 3.5GHz base stations, ahead of Far EasTone with 4,600 and Chunghwa Telecom with 4,500, though it targets more than doubling this to 10,000 this year.

In a research note published yesterday (4 March), head of telecoms research for Asia Pacific at HSBC Neale Anderson, stated China’s major operators are close to joining the few which have passed the peak of 5G investment, which should “enable their focus to shift to new service development , particularly in the enterprise realm”.

Taiwan’s operators also look to be on track to be part of that group comprising SK Telecom, KT, LG Uplus and Telstra.