Chunghwa Blaming VoIP for Drop in Long Distance?

March 30, 2006

In reporting its financial results today, Taiwanese telco�Chunghwa Telecom took a swipe at VoIP, including the following in its financial summary:

"International long distance revenue decreased 4.1% due to stiff competition and the impact from VoIP."

As far as I know, Chunghwa has not launched a war against VoIP, but this statement does make me wonder whether they might be starting to build a case in favor of restricting Internet telephony in some way. This statement did get singled out in the technology news media and generated some buzz.

However, you can put the statement about VoIP in context by looking at the whole paragraph:

"On a segmental basis, total Internet and data service revenue for 2005 increased 7.2% year-over-year (YoY). Of this, Internet service revenue increased 8.6% due to strong broadband subscriber growth while data revenue increased 3.0%. Mobile revenue increased 3.9% as a result of solid subscriber growth and higher value-added services revenue. Fixed-line revenue for 2005 decreased 8.0%. Local service revenue decreased 9.3% due to mobile and ADSL substitution. Domestic long distance revenue decreased 8.3%. This drop was mainly due to mobile substitution and a decrease in transit revenue as alternative operators built and used their own circuits instead of our own. International long distance revenue decreased 4.1% due to stiff competition and the impact from VoIP."

VoIP stands out because it comes at the end of the paragraph, but really the overall picture here shows that Chunghwa's decrease in long distance revenue is part of a complex of interrelated trends involving users' switching over to Internet and mobile services generally.

I was also interested to note what Chughwa has been doing in the IPTV market:

"IPTV service was first offered in the Taipei metropolitan area in March 2004, and by the end of 2005, Chunhgwa accumulated around 100 thousand subscribers. The company expanded the service island-wide in August, and it now covers 75% of the island's population. Currently, there are 33 broadcasting channels and approximately 1,600 on-demand programs. Chunghwa also launched home banking and karaoke as a part of IPTV value-added services in August 2005."

AB -- 3/30/06

Tags: china, chunghwa, distance, financial, long, results, taipei, taiwan, telecom, voip
Related Tags: revenue decreased, distance revenue, revenue increased, service revenue, revenue, chunghwa