03.14.2001
Tecom hot favorite for Chunghwa ADSL outsourcing bid

• The results of the bidding for Chunghwa Telecom's ('Chung Hua Dian') ADSL outsourcing contract are to be released at 9:30 a.m today.

• The winning bid is expected to be below NT$6,500 per ADSL unit due to the fierce competition in the bidding process.

• Tecom (2321 'Dong Xun') is the favorite. Tecom has teamed up with Nokia and Lucent on the production of ADSL for the Chunghwa deal. Nokia and Lucent will be involved with the operational side, while Tecom will focus on end-user equipment. Tecom subsidiary Kong Chuan (unlisted) is also bidding. We estimate the order could reach as much as 760,000 units, for potential revenue of NT$1.8b.

• Such a large order should lead to improvement in cost control. We therefore believe the deal will be profitable for Tecom, if only marginally.

BennyLo@Primasia.com +886-[0]2-2547-8869