According to a source involved in the media review, MEC, Carat, Media Palette and Initiative are competing for Chunghwa's fixed line, data communications and mobile services businesses — with annual estimated billings topping US$24 million — along with at least one other unconfirmed agency. Presentations from agencies are expected to begin on June 5.
Industry watchers said the recent consolidation would allow Chunghwa to unify its three divisions under a consistent brand umbrella, a strategic decision in the face of increasing competition from rival players FarEastone Communications, Taiwan Mobile and new wireless start-up, Vibo Telecom, handled by Saatchi & Saatchi Taiwan. But with Government regulations stipulating the business must be reviewed each year, it is expected to be difficult to sustain a long-term brand proposition.
Chunghwa has been struggling to maintain its market leader status, with the telco posting a Q1 net profit of $308 million, down 14 per cent from one year earlier and is reportedly eyeing Southeast Asian markets for expansion. According to 2005 figures from Rainmaker, Chunghwa spent more than $18.5 million advertising its products and services, making it the leading telco in Taiwan in terms of adspend. Leo Burnett recently edged out JWT in a final shoot-out to pick up the telco's $15 million creative business for a 12-month period.
