Taiwan Mobile (TWM) held the 2020 shareholders’ meeting today (18), over which Chairman Daniel M. Tsai presided in person. At the meeting, the operating results were shared with shareholders by means of last year’s financial report and a cash dividend of NT$4.75 per share distributed. In order to accelerate internationalization, regionalization, and the development of the business layout in the greater Southeast Asian market, the shareholders' meeting of TWM today also passed the proposal for two new independent directors of foreign nationalities for the first time, namely Mr. Tan Tong-Hai from Singapore, and Ms. Drina Yue from Hong Kong. These two new independent directors have all served as senior executives at internationally renowned large technology and telecommunications companies with complete qualifications and suitable backgrounds; therefore, they can strengthen TWM's corporate governance performance and nudge it to stride toward the goal of becoming an international sustainable benchmark enterprise in the international ICT industry while embracing the new era of 5G. Daniel also called on the competent authorities to take the policy of "3G shared platform" seriously to reduce energy consumption. As for how to set the 5G rates, TWM will take into account both shareholders' and consumers' rights and interests.
In his speech, Daniel mentioned that the joining of the two independent directors of foreign nationalities will help TWM to expand beyond Taiwan and allow the company's operating indicators to be aligned with the international standards, while contributing to the overall policy for future development. As for the independent director Jih-Tsan Huang who resigned this year, Daniel also expressed his gratitude toward him on behalf of all shareholders. Jih-Tsan Huang had contributed to the board of directors for more than 17 years, and his term of service needed to be adjusted because of his long-term appointment. Thanks to Jih-Tsan Huang for his contribution to the general business layout of TWM's digital convergence from the era of 2G all the way to 5G.
Among Taiwan Mobile's five independent directors, in addition to the re-appointment of Hsueh-Jen Sung, Chairman of Vaucluse Capital Management Ltd., Char-Dir Chung, a Distinguished Professor at the Department of Electrical Engineering and the Graduate Institute of Communication Engineering, National Taiwan University, and Hsi-Peng Lu, a full-time Distinguished Professor at the School of Management, National Taiwan University of Science and Technology, the newly appointed independent director Mr. Tan Tong-Hai is currently the executive director of New Spread Limited, and used to be the CEO of StarHub Internet Pte., Ltd., Singapore Computer Systems Pte., Ltd., Pacific Internet Pte., Ltd. The other newly appointed independent director Drina Yue is currently a member of the Board of Directors of Christian Action Asia. In the past, she had served as a senior executive in international technology companies, including AT&T and Motorola.
Daniel particularly pointed out the promotion of digital convergence and investment in the content industry. The Netflix series "The Victims' Game" produced under the name of TWM, investment in myVideo, and the tearjerker series "Workers" have all underlined TWM's great determination to strengthen its development in the film and television industry. Daniel even declared after the meeting that he will spare no effort to build myVideo as the number one local OTT brand in Taiwan.
After the shareholders' meeting, the media actively asked questions about 5G development and the rates, and Daniel said that the investment in the 4G spectrum has not been returned so far, and the investment amount of the 5G spectrum is also quite large. In the future, investments in other spectra will increase. In fact, the most important thing about 5G is the subsequent infrastructure, particularly the rapid changes in the relevant equipment, which is why the company aims to plan ahead. Regarding the 5G rates, Daniel said that the amount of NT$1,399 seems to have become the ceiling of the rates; he hopes that the rates will not be in chaos as in the past. At present, he does not know what the real reasonable rate is; however, the amount of NT$1,399 in Taiwan is indeed lower than the unlimited data plan in the amount of NT$2,000 in South Korea. TWM will strive to take into account both shareholders' and consumers' rights and interests and achieve a balance.
Daniel mentioned that Taiwan’s rates of 4G services are already the cheapest in the world. With such a small market in Taiwan, there are five service providers. With severe competition, the price competition in the market will be inevitable once the 5G services are launched. Therefore, how many players can survive in this market is up to the market to decide. Daniel also emphasized that the telecoms service providers who have launched the 5G services are only struggling to acquire a reputation, while their capabilities will not be enhanced until the technology is fully developed, the end product lines are complete, and the equipment is fully up to date. In addition, it is impossible to rely only on the high frequency of 3.5GHz for the spectra. In the future, the medium, low, and high frequencies should all be applied, which is also true for the world's telecoms industry. Meanwhile, the competent authorities should discuss the planning of future spectrum strategies in a serious manner; after all, the resources are limited.
Daniel once again called on the government to address the issue of a "3G shared platform" without delay, because the telecoms industry is an energy-consuming industry. With the launch of 5G, it is an urgent issue of whether Taiwan still needs 3G networks provided by four telecoms businesses, particularly as 3G is mainly used for voice, and almost all consumers now use communication software to communicate. However, 3G base stations still need to be air-conditioned for maintenance in hot weather. Therefore, the competent authorities should have a forward-looking vision to develop a "3G shared platform."
Speaking of the layout in overseas markets, Daniel said that since Jamie Lin took office as President, he has often mentioned the Southeast Asian market as ASEAN countries feature a large young population. Although it is quite unlikely that TWM becomes a telecoms operator under franchise in the regional markets, TWM's experience of cooperation in terms of digital convergence and e-commerce may serve as an example for Southeast Asian companies to follow, which may in turn promote cooperation between both sides.
As for the issues of the group-based cable TV charges and profit sharing, Daniel pointed out that the problems of cable TV in the past are about the channels that never change and the constraints on the content industry. Therefore, there should be a consensus among the telecoms operators, and profit sharing based on the ratings is the inevitable direction. As cable TV is facing challenges from OTT, system operators, channel operators, and competent authorities should be more proactive in introducing transparent and fair mechanisms. The competent authorities do not need to worry about cooperating with large telecoms operators; instead, they should focus on consumers' interests and the future of the content industry.
TWM has obtained the 5G license issued by the NCC yesterday (17) and completed all the administrative procedures before the launch of the 5G services. The progress of acquiring the 5G license was slower at this time because of the consideration for future cooperation in terms of frequency sharing, network sharing, and joint construction; therefore, the efforts were concentrated on the information in this regard in the security plan for this application. Taiwan Mobile will launch the 5G services as quickly as possible to meet early users' needs. Meanwhile, it aims to complete 4,000 high-speed 5G base stations in the frequency of 3.5GHz by the end of this year and to reach nearly 50% in the population coverage rate so as to provide users with the best high-speed 5G services. Furthermore, to accelerate the digital technology transformation of Taiwan's all industries, TWM will also provide individual customers and corporate clients with more diverse applications and services. With 5G characterized by high-speed transmission, low latency, and massive connections, TWM will incorporate artificial intelligence into the 5G services so as to jointly create a 5G ecosystem and welcome the advent of the new digital revolution era.
In 2019, TWM's operations focused on creating new business opportunities, accelerating the expansion of the e-commerce business, and reversing the trend of customers' tendency to choose low- or middle-rate plans. The total consolidated revenue in 2019 was NT$124.4 billion, the net income after tax was NT$12.5 billion, and the earnings per share was NT$4.51. In fact, the year of 2019 was the most severe year for the impact of the "499 Chaos" in mobile rates, but TWM's consolidated revenue still increased by nearly 5% a year as driven by the growth of e-commerce.
TWM has a complete layout of digital convergence, and the leading position in e-commerce through the online e-commerce platform "momo;" it has also combined the group's resources to launch differentiated products and services so as to develop new business models and create more business synergy. In 2019, the subsidiary momo's annual growth rate in business-to-customer e-commerce revenue was as high as 29%, and the business scale continued to expand. For the value-added services for enterprises, the performance of the cloud and the information and communication business was excellent, with the annual revenue growth of 9% and 63%, respectively, and the number of Internet of Things users increased by 25% a year. The smart speaker jointly launched by TWM and Google has stood in the first place in the sales; the momentum of application for the "Double Great Speed" plan for mobile and cable broadband Internet access has continued to grow.
In addition, TWM has also actively shared with the society the results of the company’s continuous growth over the years. For the first time in 2019, its carbon reduction targets passed the the world’s most stringent review by the Science-Based Targets initiative (SBTi) as the first non-electronics manufacturer in the country and the second telecoms technology company in Asia that has passed this international review. TWM is also the only one in Taiwan’s telecoms industry that has been rated "A," the highest rating, in the rating of "Climate Change" by the Carbon Disclosure Project (CDP), the world’s largest carbon disclosure organization, to be placed on the Climate Change A List. On the domestic front, TWM had received the Taiwan's Excellence in Corporate Social Responsibility Award by the CommonWealth Magazine for the twelfth time as of last year. As of this year, it has received 16 Corporate Social Responsibility Awards from Global Views Monthly. TWM will strive to let Taiwan be visible to the world through its sustainability value.