TWM established “Risk Management Policy” in 2011, and was revised by the Board of Directors for the second time in 2020 as the highest guiding principle for risk management. In advance to achieve the benefits of prevention, TWM actively plans risk management policies, organizational structures and risk management systems to address the risks that the company’s operations may encounter to. . In 2015, the existing risk management structure intergraded with control mechanism.
In addition, the "Risk Management Committee" was established and approved by the board of directors to strengthen the risk management mechanism in the company.
The Internal Audit Office performs risk assessment at the end of the year periodically. The risks are evaluated for importance and probability and gave their risk value by Internal Audit Office.
The level of risk value as the basis will be used to arrange an audit plan for next year.
TWM integrates and manages various important risks that may affect operations and profits by proactive and cost-effective manner along with a response mechanism from the three-level risk management.
The company's important risks include "Operating risk", "Risks related to privacy and information security", "Innovation risk"... and so on. Please read the detail content in the company's annual report.
TWM sets up "Risk Management Committee" for supervising and strictly controlling risk management related issues, and promotes a risk management-oriented management model to achieve the goal of improvement continuously.
The Risk Management Committee is hold at least once every six months, and communicates with various functional committees as Operations and Management Committee”, “Occupational Safety and Health Committee”, “Communication Quality Assurance Committee”, “Environmental Management Committee”, “Privacy and Information Security Management Committee” , “CSR Committee” and “Innovation Management Committee” and other special committees to discuss the issues of risk management regularly , for accurately control risk issues in different fields.
In the event of a major event or proposal, each responsible unit shall report it to a meeting of operation management or each management committee to decide the necessary measures. Each functional committee not only proactively focus and identify the potential risk issues within internal and external for the company, but bring up appropriate solutions.
The operation record of the “Risk Management Committee” is coordinated and submitted by the Internal Audit Office to the chairman for approval. The Internal Audit Office follows up the status of operation and report to the Board of Directors at least once a year to ensure that relevant risk issues are effectively managed.
The company has proactively promoted the mechanism of risk management since 2011.
The followings are the status of main operating over the years.
*Emerging riskPlease Swipe Left or Right View All.
|Category||Key Risks||Explanation of Risk||Trend||Possible impacts to TWM||Actions/Countermeasures
(mitigating risks & seizing opportunities)
|Actual projects||Control KPI|
||on the decline||
||5G service launch project||
|Policy and legislation changes||
|Network bandwidth resources||Climate change/ natural disasters*||Climate change would result in elevated average temperature, Maximum temperature along with more frequent and extreme weather events such as typhoons and rain storms with higher intensity.||Remaining stable||
|Telecommunication technology innovation*||Rapid development in technology and the shift to digitization means changing business models and innovated products and services.||On the rise||
|Information security||Information privacy and security*||
||Remaining stable||The company provides customers with various telecommunications and value-added services. In the future, innovative services (such as 5G) and product range will continue to increase. In addition, domestic and foreign security/privacy standards (such as domestic information security law and EU GDPR) will become more strict. If the customer's personal information is leaked carelessly, the Company shall bear legal responsibility and seriously damage the Company's image.||In 2004, the ISO 27001 "Information Security Management System (ISMS)" were required to be followed by the new BS 10012 and ISO/IEC29100 privacy framework standards, and were integrated into the corporate operating procedures, such as the personal data file violation and control.||Promote international standards for security management and privacy protection, set up 5G cyber security task force to strengthen multi-dimensions control measures.||Legal and customer litigation disputes|
|Business operation||Occupation safety||
||On the rise||
||Establish an occupational safety and health management system (ISO 45001)||Disabling injury Frequency Rate dropped 10%|
|Market||Alternative and emerging business models||
||Remaining Stable||It is hard to maintain the revenue due to the intense competition in the market. More of the users terminate the contract in advance since other companies offer better bonus.||TWM try to increase customer loyalty by labeling users in groups and offer special discounts, so as to strive for user renewal and prevent rent withdrawal, or to provide more diversified contracted products or roaming services due to the recently increasing popularity of backpacking.||
||On the decline||Taiwan telecom industry has been trapped into a price competition. And the new 4G business (T-Star/Line Mobile) are actively added to the project and offers low-priced unlimited 4G data plans. This will also make it more competitive.||In response to market competition, the Company attracts the young users with short-term contract (12 months) in the online store and cooperates with momo.com, the e-commerce unit of the TWM family, to change the product model binding with contract and allow users to have diverse choices.||
|Changing customer requirements*||
||Remaining Stable||Due to the popularization of 4G and cheap unlimited Internet access, more and more users use VOIP to replace traditional voice call. This makes revenue from traditional voice calls decline. And increase of Internet access volume is unable to enhance sales revenue.||TWM will develop more mobile value-added services to expand our revenue base, for instance, video products in the mySeries, contract of smart household appliances (e.g., Nest mini), wearable device services, etc.||
||On the decline||Low birth rate and aging society are impacting the Taiwanese society. The declining population growth rate and the older age structure reduce the demand for mobile service, which cause a decrease in revenue.||Senior users rarely replace existing phones with new ones and it is difficult to stimulate phone plan renewals for this group of consumers, we changed the contractual model and launched the myfone mix & match service to allow for more choices.
Child’s first cell phone is increasingly becoming an earlier, and pricier, decision for parents, so TWM has launched both prepaid and postpaid plans to satisfy their needs.
|Innovation management||Innovation kinetic energy growth||
||Remaining Stable||Even if the telecom network has been evolving from 4G to 5G, telecom companies still have to face the relentless challenges of OTT app from start-up companies. If TWM could not positioned itself in a good place of value chain beside dumb pipe, the consequence would be sluggish growth or even decay on revenue and profit.||
||User Penetration and Revenue|