08.20.2001
Chunghwa slashes prices on IDD services

• Development:: Chunghwa Telecom is expected to issue IDD price discounts beginning 1st Sept. New rates will provide 5-min. free for every 2-min. of airtime consumed for calls to China and USA.

• Analysis: Calls to US at peak hour will be priced at NT$1.68 (per min, avg) and to China at NT$3.80 (per min, avg), which is very competitive on rival firms. We expect this price-cutting war to continue until at least year-end.

• Primasia View: We believe that long-run price wars harm all players in terms of earnings, but are an unavoidable consequence of deregulation and open competition.