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Asia300

Taiwan's Chunghwa Telecom banks on AI and Southeast Asia

Island's largest operator aims for breakout from mature home market

Chunghua Telecom’s Chairman David Cheng, left, said his company will invest in more startups in 2018, with Sheih Chi-Mau, head of the company's telecommunication lab at right. (Photo by Cheng Ting-Fang)

Taipei -- Taiwan's Chunghwa Telecom, the island's biggest telecom operator and internet provider, aims to expand new service business related to artificial intelligence to revenues of $100 million in less than three years, while it continues to boost its presence in Southeast Asia, Chairman David Cheng said.

The move is part of the operator's efforts to turn itself into a regional player and a digital service provider as it faces headwinds in a mature domestic market. The Taiwanese wireless carrier has some 10.5 million users on its mobile network and controls about a 70% market share of the island's internet services.

"We have a great position to be a service provider in the age of artificial intelligence as we accumulate so much data each day," said Cheng in a media briefing on Friday. "We are able to provide services including voice recognition, facial recognition, car detection, and even obstacle prediction to our enterprise customers in the first stage."

Cheng said the company would generate at least $100 million in revenue from the emerging business by 2020. In 2017 Chunghwa Telecom's revenue dropped 1.1% from the previous year to 227.55 billion New Taiwan dollars ($7.76 billion). Net income declined 3% to NT$38.86 billion.

The company has already trained and recruited more than 200 data scientists and 150 AI specialists, said Cheng.

In addition to artificial intelligence, Chunghwa Telecom has assigned up to 1,500 staff to study several other new areas where it sees most growth potential in the next few years -- including augmented reality, various connected devices, information security, and advanced data analysis, said Lin Rong-Syn, head of the company's telecom laboratories. Chunghwa Telecom currently boasts some 23,000 employees.

The company is also set to increase its presence in Southeast Asia in 2018.

Chunghwa's overseas businesses accounts for roughly 1.5% of its annual revenue at present, with most revenue still coming from its home market.

"We are seeing at least double-digit growth for overseas business for 2018, especially in Southeast Asia as many Taiwanese companies are also expanding their production bases there," Alex C.C. Chien, president of Chunghwa's international business group, told Nikkei Asian Review.

Chunghwa has subsidiaries in Singapore and Thailand, opened in 2017, and owns a joint venture with Vietnam's leading telecom company Viettel.

Chunghwa helps major Taiwanese companies with big manufacturing bases build data centers for their factories and provide virtual private network services. They include Pou Chen, the world's top footwear contract maker, and leading apparel maker Eclat Textile

It also has subsidiaries in Japan, Hong Kong, China and the U.S.

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