Far EasTone Telecommunications Co Ltd
TWSE:4904
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Far EasTone Telecommunications Co Ltd
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Welcome, everyone, to Far EasTone's 2021 Fourth Quarter Earnings Conference Call. [Operator Instructions] And for your information, a webcast replay will be available within an hour after the conference is finished. Please visit www.fareastone.com.tw under the Investor Relations section.
And now I would like to introduce Mr. Gary Lai, the IR Officer. Gary, please begin.
Good afternoon, everyone, to attend Far EasTone's Fourth Quarter 2021 Results Conference Call. Our President Chee and CFO Sharon both joined this all with us to discuss APT merger, 2021 results as well as 2022 guidance. Before Chee's presentation, please pay attention to our safe harbor statement in the first page of our presentation deck.
Let me hand over to Chee, please. Thank you.
Okay. Thank you, Gary. Good afternoon, everyone. Thank you for joining. And I know there is some anxiety and excitement, and this is, of course, supposed to cover our fourth quarter last year's earnings and also our forecast for 2022. And since we announced our merger plan with APT on Friday evening, so we are going to change our sequence a little bit. And then we will just get to what you're thinking about, what you're trying to find out. So we will talk about the summary of the FET and APT merger plan at first, okay?
So the plan that we, FET, are going to issue 356 million, or to be exact, 356.7 million new shares to merge with APT. And then FET will be the surviving company, and APT shareholders, each of them, will receive, for every -- for each APT share they own, that they will receive 0.0934406 FET share. And in total, APT shareholders together will receive 9.87% stake in FET.
And our combined telecom subscribers will become over 9.2 million or so. And then the merger, of course, is subject to the approvals of relevant authorities. And we do expect about TWD 3 billion -- this is a rather conservative estimate, but we do expect about TWD 3 billion EBITDA synergy first year after the merger and no impact to net debt/EBITDA ratio -- I mean, multiple. And then we expect earnings accretive from year 1, all right?
And then we'll talk about the synergies in the following 3 slides. So we have a total of 9 items that we'd like to just highlight for you all. And first of all, this is going to be a superb spectrum match with existing equipment and technology to sustain our leading network positions.
And so first of all, our 5G bandwidth in the mid-band, that is currently, we have 80 megahertz in the 3.5G bandwidth, and there's a spectrum. And then we will get additional 40 by reforming the 40 megahertz 2600 TDD, each APT and Far EasTone combined, and this can be used for 5G bandwidth expansion and just through the carrier aggregation technology. So this is an additional 40 megahertz to our mid-band 5G spectrum. And just for your information, the cost that we pay for the 2600 TDD is about 20% of the 3.5G spectrum that we paid for.
Okay. And then also, we will have the largest and also contiguous 700 megahertz bandwidth for 25 megahertz. And this is the best spectrum because it's deep, it's low and it can improve the network throughput in the 5G indoor penetration. And also, combining -- by joining with APT, we will have the largest and contiguous 28G bandwidth. And together, it will be 800 megahertz. This will put us in a very competitive position for more private network scenarios that we can support for the industrial applications as well as the LEO, the lower earth orbit, of business that is emerging. Okay?
Secondly, this will give us increased national and regional fiber backbone coverage and reliability. APT has good assets and also their agreement with Taiwan railroad, that gives us a very good fiber assets.
This slide is just for the APT-FET spectrum match for your information, so you can look at that. On the top, for the 700 megahertz area that we combined, we are right next to each other, and it's a 25 megahertz. And then if you look at -- that is for the sub 1G auction and then it is effective to -- the license is effective to 2030. And then for the 2600, as you see all the way to the right, so APT has 20 and we have 20. And then together, that's a 40 we can reform for 5G.
And then for the 3.5G, right now, we have 80, and we are between TSTAR and Chunghwa, that's our position. And we did pay for this location and then for competitive advantage. And then the 28G area that combined with APT, who is right next to us, it's 800 megahertz. Okay? Next.
All right. So continue with the merger synergies. Number three is significant network capital and OpEx savings because we can increase our radio capacity without additional capital investments or little. And then we can also combine existing Ericsson equipment for the matching spectrums for reuse. That's why this matching is very important. So all from APT spectrum are matching with what we have is a subset with what we have. So that gives us this additional advantage, reuse the equipment because it's the same spectrum and you just double up the capacity. And then -- but then you only need one set of equipment. So we can scale back on our growth for additional equipment needs just by reusing what APT already has.
And then also, in terms of the annual support, maintenance costs, optimization costs, and then those are big dollars paid to the vendors, and then also operation expenses costs from network consolidation and mobile RAN, core, transport networks included, so that's a lot of savings there. And also, we see that the backbone coverage is strengthened, right, and enhanced, as I mentioned briefly on the previous slide.
And also, in terms of IP transit and peering costs. APT has a higher unit cost and then probably because of their scale, so they are ones to combine with us. And this -- all these costs will be at a lower unit cost. So that's additional savings as well, okay? And then now those are just looking at how we can improve the efficiency of the capital by the scale and also by consolidating and saving on the capital investment as well as OpEx spending.
And then if you look at on the upside in terms of growing the additional revenue, of course, with the broader customer base, that is a bigger base for us to do the 5G conversion or just to upsell. So that will contribute to the uplift and, of course, the telecom revenue and also the ARPU.
And then in terms of additional, that is cross-selling, FET does have digital services in addition to the friDay video, music, friDay shopping, and then also since a year ago, we launched Mobile Circle. That is to have quite a bit of co-creation with our alliance that provide additional services for our users to consume. So all those, by combining with APT, the user base has since broadened, and then we look at this as additional cross-selling opportunities for us and additional digital services revenue accordingly. Okay? Next slide.
All right. And then also on the enterprise side, APT has good fixed asset. And then also I mentioned the fiber asset as well. So -- and then they have been working in this enterprise ICT, the smart devices area as well. So we do see the synergy by combining the 2 companies' 2 workforce to grow -- continue to grow enterprise ICT and fixed data business. And as you may recall or you will see that later in my presentation for the BAU 2021 performance, our ICT -- smart ICT continues to be our growth engine and drive our revenue growth very, very nicely. Okay?
And of course, with the Foxconn support behind APT, so we see more Foxconn and FEG collaboration opportunities. And then also combine the 2 networks together with this additional spectrum assets and then also the one network, and we can expect to improve customer experience.
And also, last but not least, we'd like to improve the environmental sustainability. Everybody knows that the radio stations, they consume a lot of electricity, which we are really short of in Taiwan. And then so what we could do as the telco industry is we can do more consolidation and then make all this network investment and then electricity use more efficient, right? We really cannot afford to not to think about all that.
And then so by combining 2 companies together, we are looking to consolidate 2 5G cores into one, and we could consolidate 2 4G networks into one. And then also greater than 90% of APT cell sites can be consolidated with FET. This is not only good for the environmental sustainability, of course, that means a lot of dollar savings as well.
Okay. With that, I sum up on our -- the merger synergies for you all, okay? We can have the Q&A after I finish the rest of the presentation, if you don't mind. So I'll continue with our fourth quarter and full year performance overview for you.
All right. So we have very solid fourth quarter last year. And as you could see across from total revenue, EBITDA or net income and EPS, Y-o-Y, it's all positive, close to 5% growth across the board. And then in terms of the full year, right, we actually achieved TWD 85.3 billion revenue, and that is at 7.3% year-over-year growth. And in terms of our target achievement, it's 103.7%.
And then if you look down, so our EBITDA is also increased by -- both from the achieved rate and also the Y-o-Y is about 2% growth. And our net income increased 9.2% and so is the EPS, TWD 2.8, against our target that was TWD 2.56. And I do want to remind everybody, the sale of our one building was accounted for when we set the target last year for 2021 target, TWD 2.56. So we definitely outperformed our own target by almost 10%, so 9%. Okay.
All right. And then continue with our financial performance. So if you look at that, we have improved our net debt and net debt-to-EBITDA multiple, okay? And then also our free cash flow remains very sound and healthy, okay? And then our full year 2021 CapEx ended up with TWD 12.1 billion. It's about 19% below the guidance of TWD 14.9 billion. We do have about more than TWD 1.5 billion carried over to 2022. But we also, at the same time, we have more scrutinized our capital spending, so that's why we were below -- 19% below our guidance for 2021, okay?
All right. And then just some quick highlights and overview. So we have seen very solid growth on mobile postpaid customers, even though the market, we have been saying, is oversaturated. But then you could see that we still managed to have a 1.4% Y-o-Y revenue increase. And this is really reversing years of a declining trend. So this is really a big deal. And also, if you look at the mobile ARPU, right, and we were the first in the industry or among our peers to start turning our ARPU Y-o-Y positive last year.
And then on the right-hand side, our postpaid customers continue to grow, even though it's not like a big jump, but then given this is a saturated market, so we still are happy with the growth that we are able to manage. And then the team worked really hard. And then our network is the best, and I think customers -- more customers are seeing that.
And also, on the other hand, our postpaid churn, we continue to manage this down. So in 2021, even though there is the 5G, the new iPhones and all that, that do -- they all start up the churns a little bit, the [ MP ] market, but still, we managed the churn rate at 1.1%. There is still room for improvement, of course, and we will continue to do that, okay?
All right. And then a quick update on the 5G performance and also our progress. So our 5G penetration has exceeded 20%, actually, since a couple of months ago. So our [ understanding ] is ahead of our industry average. And our target is to reach 30% by end of the year 2022.
And then also, more than 80% of the 5G users, they signed up for high rate plans. And then the average monthly fee uplift is more than 20% for renewal customers.
And so far, we have deployed more than 9,700 stations for 5G, and then we have coverage island-wide, nationwide more than 90%. And then also by end of this year, our target is to cover 97%, okay?
And then also, we have -- with our very strong network team, we have achieved world-class 5G network performance. Last year, in September last year, we were awarded global #1 for our uplink and then downlink and also our video experience as the #1. Okay. Next slide.
All right. And then on the new economy side, so the non-mobile part, so the growth engine, right, that continues to be our growth engine. First, if you look at the chart on the bottom. So from 2016, that's basically where we started investing in the so-called new business or new economy. But at that time, it accounts for about 5% of our total revenue. And then over time, over the years, right, so it has increased to 17%. And then just look at Y-o-Y, last year, even though the pandemic came back to haunt us in Taiwan, but then we still managed to have grown 23.4% in our new business area, so which is very encouraging, okay?
And then some highlights and the areas where we did especially well on the enterprise side, which accounts for 53% of the total new economy revenue. And then the ICT, the smart ICT revenue grew almost 30% Y-o-Y. And our cloud service also grew very well into 49%. And then on the consumer side, the media service, the mobile commerce, that's our friDay shopping, both have double digit in 23%, 26%. And then direct carrier billing continues to grow in double digits as well. Okay?
And some highlights for the new economy. So on the consumer, as I mentioned earlier, we launched this Mobile Circle. It starts as a customer loyalty program. And then we already have 3 million downloads. And then the daily active user growth grew 72%. So it is encouraging, and it also helped boost our e-commerce sales as well. And then friDay video, our monthly active user grew 28%. And then we were also the #1 brand social mentions among local OTT brands, okay? And our friDay shopping, the revenue grew 26%. And then for the Double-11 shopping spree for the EC, and then during that period, the revenue grew 52.7% compared with a year ago, so which is very good.
And then also the new iPhone launch last year generated excellent bundle sales for -- not only for the phone because we have the 5G phone that will come with our 5G service program on the service plan. So it boosted some 15% Y-o-Y growth for our total merchandise revenue, although it has very good contribution to our 5G conversion and then also uplifts as well, okay?
On the right-hand side is the enterprise. [indiscernible] to lead the industry to provide 5G telemedicine services, already we provide the service or enabled it to 23 villages in 10 counties. And then we were awarded a contract by the Ministry of Health and Welfare to grow to 50 villages across 14 counties in 2022.
This is just to -- for your information, this is not just by having the 5G setup. It is also the telecommunication, the communication platform that we have homegrown created for this telemedicine diagnosis over -- remote diagnostics. So the whole platform and then plus the 5G connectivity, combined, this is a total solution that we provided to all these counties. And we actually won a National Health Quality Award -- Healthcare Quality Award for this, which was rare because, usually, the recipient of the National Healthcare Quality Award are hospitals or research institutions.
Okay. And then in smart city that we continue to do very well because there are projects that are funded by the local government or funded by the central government. So for example, we deployed homegrown energy management solutions to 1,600 schools in 9 counties. And then also we started in the smart charging station business. And then -- and also the smart meters, and then also the technology, the computer vision for law enforcement. So there are many projects in the smart city area that we continue to see the demand to grow, and it's a steady growth for us in the IoT area.
And then also, we -- in the AI and big data growth in public sector, we start seeing the government also are into so-called transformation. And a lot of that started with their data platform that needed to be established or need to be reengineered. So we got engaged in quite a bit of these type of projects. And also, together with our big data analytics and AI machine learning capabilities, we have won quite a few governance contracts and then delivered significant results here. Okay?
All right. And then here is just a glance of some of the awards and recognitions. Let me see. The fourth on the top from the left, that's the National Healthcare Quality Award I was referring to, and that was for our FET 5G telemedicine solutions. And also, we have our smart -- the energy management system, EMS, also won award as well. So these are the areas where we have been kind of -- spend a lot of time and efforts that we encourage our employees to really see, grow these capabilities, and those became instrumental to us providing these homegrown solutions to our ICT business and which has proven that it has helped increase our profitability and also revenue as well at the same time.
And there are some other recognition from you all, like the Asia and institutional investors type of award. Thank you for that. And also, we have continued to earn our corporate governance excellence in those areas as well. And then, of course, the first one on the left, on the top, that's the DJSI that we are selected for inclusion in the DJSI World Index for 3 years in a row. And that is something we will continue to do well and then only to do better.
And also, FET has always been very customer focused, and so we actually get -- 10 years in a row we get the best service for the -- not just for telecom, it's across all service industries, and we got this award 10 years in a row. This is the 10th and then the only one company that gets this special award. Okay?
All right. So for 2022 priorities and then it's to -- as I have advocated with my team, we ought to scale up to grow. We do see a lot of growth opportunities, and this is before we even think about the merger. So we already see the growth opportunity, so we need to scale up to grow. In the past, especially like when we support the enterprise solutions, we have some dedicated resources, we have some shared resources. But then seeing the momentum -- the growth momentum in the smart ICT, the homegrown solutions area, so we have done some restructuring. We have put together dedicated teams to just support the enterprise business unit.
And then also, we have the FET Mobile Circle. We'll continue to grow that, and it is the engagement program with our customers. And then by engaging with our customers deeply, and we do expect that we can see the users' needs more and then they can consume more in this Mobile Circle through various services that we provide for them, either it's homegrown or it is co-created with other companies and even with some new -- with some start-up companies that they have good new ideas as well, okay?
And of course, with 5G being a revenue uplifter, right, for us, so we'll continue to grow and accelerate our 5G conversion, and then we will grow our telecom business accordingly. And customer experience, how to optimize it. And as I mentioned previously for the merger is that even if it doesn't happen this year and the year after, but then improved customer experience with these additional assets that we will acquire from APT, it will make our network even more robust and then the kind of service that we will be able to provide. And also with the largest 5G spectrum that per user will be able to enjoy as there are -- there will be more 5G, new 5G services that will be available. And then our users, Far EasTone user, will have the biggest bandwidth to enjoy them all, okay?
All right. So for the 2022, our consolidated financial forecast, we are looking at EPS will be TWD 2.83 for this year and then -- by the way, this guidance that we are providing here does not take this merger into account. So this is not considering the merger, okay? And also, if you compare to our 2021 results from an EPS perspective, it looks like it's only 1.1%, almost like a flat. But then now I do need to mention that sales of the one building again. So that onetimer, if you exclude that onetimer, that we are really talking about 17% year-over-year growth for our net income and our EPS, okay? That is just for your information and some clarification.
In terms of our CapEx, this year, we are really looking at the new capital spending is TWD 9.6 billion, and then plus TWD 1.5 billion that will be carried over from 2021, so the total is about TWD 11.1 billion. Of course, with the merger plan on the table, we will also look at if there is more optimization we can do anticipating the merger to be approved, and then what kind of optimization we can do in terms of our capital spending. So -- but then this one right now is before we consider any merger in it, okay?
All right. And then now last but not least, about our dividend proposal. So we still want to maintain a very stable dividend policy. And then so for this year, 2021, that our proposal is still to provide TWD 3.25 per share -- dividend per share. Of course, all this is subject to our -- assembly of our general Board approval -- our shareholders' meeting approval that will be held in June, okay?
All right. Is that the last slide? Okay. So that is all the presentation we have prepared for you, and I now welcome your questions.
[Operator Instructions] And our first question is coming from Neale Anderson of HSBC.
Congratulations on the merger. That's very good news. I have 2 questions, please. The first relates to the TWD 3 billion of synergy. You mentioned that was quite conservative. So I mean, would it be possible to give a bit more guidance on that? Does it mainly relate to network costs? I guess that would be the largest part. And I'm just wondering if you assume many revenue-related synergies in that TWD 3 billion figure. That's the first one.
And then the second one relates to the millimeter wave where, as you point out, you have a very strong position. But the adoption of that spectrum has been quite limited so far. I think the U.S., maybe Australia, a little bit Japan, but in other markets, not so much. So I'm intrigued by your mention of using that with lower orbit satellites and also private network. So are you able to give any more details on that, please, both the demand for the private network and what exactly the plan with the lower orbit satellite?
Okay. Thank you, Neale. So the first question is about the synergy where I made a statement that we are quite conservative when I mentioned the TWD 3 billion first year, right? Okay. So instead of giving a more aggressive number, I think I will just explain my rationale.
So you can look at that TWD 3 billion, I look at mostly from the cost savings side, right? So even if I assume a flat revenue and then that will be -- that I'm comfortable with the TWD 3 billion kind of synergy contribution in the first year. So if anything more we do -- anything we do more than that on the upside, that will be just a bonus. So that's why I said it's a conservative estimate, okay?
And then for the second question regarding the 28G. So you're right. And then so even for Far EasTone, we -- the private network that we have engaged in so far, we just used the 3.5G network that we have, well, first, because it's already there, and then also the adoption of users, the penetration is still only 20%. So there is plenty of capacity and all that. And that is also the fastest way to just use the existing -- the macro network to support the private network.
And then as we can see, some of the factories and all that using a 28G and as a dedicated private network, those scenarios can also work. And actually, APT already has some deployment. So that's why I said, once we already -- because APT already started that. This is just a matter of when we want to start engaging in that area. So that definitely is one additional asset that we can put our private networks with.
And then in terms of the LEO, it is really referring to some of the -- I think that's what we call Starlink?
Starlink.
Starlink, yes, and also another satellite company. So they were already contacting our government, right, regarding if they would -- how they could operate or how -- so if you compare the spectrum that they need to operate within, and then it is actually kind of coincide with our 28G area and in particular, kind of overlap with what APT and FET both have. So that is one area. So for some of -- for those following satellite operators to work or to cooperate or to try to operate in Taiwan, and that is one area that they will need to talk to us first. So that's what I was referring to as a future opportunity. So there, we may be able to just joint venture or have some kind of collaboration or profit sharing.
Okay. Just a follow-up on the network savings, the timing of those synergies. I'm assuming that because you're both using the same vendor and as you say, spectrum is mostly contiguous, you can -- as soon as you get approval, you can start to realize those cost synergies almost immediately. Is that right?
Correct. That is correct, yes. And also, as I mentioned in the last call, I think, 92% of their cell sites could be consolidated with us. This is like without me making any network changes, then we can already just help them consolidate those. And then so with the incremental costs, right? So they do not have the whole site maintenance and then utilities and all that, that they pay at a full price, so by just consolidate that 90%. And then as soon as we get approval, that is something we can already start with.
And then each cell site that we will be able to eliminate or -- and then that is one size savings. So we have a look at that. And then like within half year, 80% of the savings will be already achieved from this one item in particular. So it's an ongoing process. And then -- so it's not like you wait for a bulk to realize the savings. It's each site that we'll be able to close down for them, and that is one size of savings.
Next question, Danny Chu of Bank of America.
Just 2 quick questions. The first one is also on the cost savings. Since you've mentioned that of the TWD 3 billion EBITDA synergy, so now we should assume mostly coming from the OpEx saving side. But if we look beyond the first year, should we expect just on the cost savings side, the savings will be more than TWD 3 billion or less than TWD 3 billion [indiscernible] I mean, if we look 1 year further?
And my second question, actually, is related to the CapEx. Earlier, you mentioned that we have some CapEx savings for FY '21. Could you elaborate a little bit more? Is it because of the drop in the equipment pricing? Or after our initial planning, we decide that we then need to roll out as many base station as we initially said? And also going forward, related to CapEx is assume the merger gets approved, what kind of CapEx savings should we expect in terms of magnitude?
Okay. So for the first one, yes, a big part of the savings I was looking at is from the OpEx side, right? And then those are like annual. So you can kind of look at them as recurring. So the savings will be recurring as well.
In terms of the CapEx savings, just to give one example, right? Like for 700 megahertz spectrum, APT has -- previously, because they are sharing with our 3.5G spectrum and then the NCC has kind of requested them to do more investment to improve their 4G network, so they have since acquired new 4G RAN stations -- RAN equipment from Ericsson and also the newer models and all that. As Far EasTone, on the other hand, we are also in the process of modernize our 700 equipment.
So for that, given they already have quite a few thousands of them, 4,000 such natural equipment, then that means I do not need to buy another 4,000, and those can be just reduced once we combine. So that give you some idea about the kind of savings we are talking about. Did that help, Danny?
Yes. But does this still apply to the FY '21 situation when you mentioned initially, we budget about like, I mean, TWD 12-point-something billion and you spend about like [ TWD 9-point-something billion ]?
Yes. Yes. Okay. So what I actually ask my team, the network team, to do like today, I told them, I said, okay, I know you have given me this network plan, right, for this year, and based on that, we approved a total CapEx, but then a big part of it, of course, is network. Network is my money burner. So -- and then so I told them, that is based on without anybody knowing that we will do the merger. I said, so now given the merger, right, you need to kind of do some optimization.
Some of the equipment or some of the investment in some of the areas that you were thinking to do, now anticipating the merger, if that will be granted in 9 months or so kind of time frame, can this be something deferred? And then if we can merge, then there's no need for it. And if we don't merge, that could be picked up then. So this is a kind of optimization that my team is going to do. They already got the order from me. So that's the kind of -- that's why I was saying, I would expect some of this request that they have submitted for the capital spending will be scrubbed and then reprioritized. And then some of them could be deferred. And then that will not spend in this year.
[Operator Instructions] And next, we'll have Sara Wang of UBS for questions.
Congrats on the results. So I have 2 questions. First is regarding the new economy revenue. So the revenue growth here is quite solid. So may I ask what's the margin profile here, either gross margin or EBITDA margin?
And the second question is that for the 2022 guidance, I understand that does not take the merger into account. So it seems we target EBITDA to grow by 8%. May I ask what's the key drivers here?
And maybe into -- more into the mid to long term, given our mobile market has consolidated and mobile churn remained low. So what do you think -- or is there anything changed your views that telcos -- in terms of telcos' competitive advantage? So for example, is there any new area that Far EasTone will focus more on? And then how is Far EasTone positioned?
Okay, Sara. Let me just make sure I capture your questions. So the first one is about new economy, right? And then our new -- overall new economy gross margin remained about above 30%, okay? And then for the digital services gross margin, that is close to 50% in 2020...
2021.
2021, yes. And ICT is around 15%. And that is something with our homegrown solutions, and we anticipate this will continue to grow. That is also something driving my team to set a KPI for that as well.
Okay, that's your first question. And your second question is about...
The EBITDA growth driver, the 2022...
The EBITDA growth driver after the merger or before?
Before.
Before, just based on the 2022 guidance.
Okay. Well, actually, I see -- for the telecom, we already reverse the trend of declining. And then telecom is -- kind of accounts for almost 80%, right, combined the device and also the service revenue. So this is for every percent that we will be able to grow, and that's a big base to grow from. So this telecom, definitely -- that's why I have this saying with my team is we have to refocus to grow our telecom business, especially because of 5G and because we build a robust 5G network, right? And then we really have -- we have done very well and that we have achieved world-class network performance. And then that is very important from the telecom perspective. So we will continue to grow telecom, which is different in the past few years because telecom has been kind of declining.
And then while we focus on new economy, but as you know, the weight is different. But then now what we are seeing is, in addition to we see the demand, the growth momentum on the new economy, but then even better, we see the momentum on the telecom as well. So in terms of the EBITDA driver, I would say, it's both the telecom and also the new economy. And then within the new economy, we did especially well with our enterprise side, right, last year. And so I do expect to see that to continue.
And on the other hand, just some side notes, so I have restructured our consumer BU to 2 divisions. So I separated the consumer BU, the telecom from the consumer BU, digital services. And then also with 2 senior VP, I put one for each so that we have focused attention by the executive leader to grow and to drive the telecom as well as the digital services on the consumer side, yes. So I do expect that if you ask the drivers, it's the telecom business, it's the new digital services and also it's the enterprise smart ICT, okay?
You probably have another question. Would you repeat it for me? Or did I answer it all?
Yes. Let me rephrase my other question. So yes, for the enterprise segment, so we actually see like Far EasTone gained a lot of projects. So what do you think is the key reason here given -- well, the market has another incumbent, so what's the key reason that Far EasTone can keep winning projects on the enterprise side, especially from the public sector?
Well, thank you. I think you're helping me with trying to -- I look at it kind of like my full box kind of story here. So I think the efforts that we have put in, in this big data and then AI and then IoT areas and also cloud, right? And they didn't get unnoticed. So build our reputation over the years with our homegrown solutions and with our team's agility and flexibility in meeting the customer needs. And that is why even [ not ] the incumbent vendor by a lot of these -- by all of these government agencies, but then we were able to really break through that barrier. And then the reputation just goes around. So we have been getting good projects and winning good projects.
Just like, for example, the telemedicine, right, and the ministry of welfare and then health, they actually do look upon our team to help them kind of provide some of these specs information and all that because we have worked really, really long time and then spend a lot of time understanding the telemedicine areas of need. So they would talk with us about these related issues and for our input. So I think -- so I'm glad to report, I do see that our efforts didn't go wasted. And then, actually, it is paying off, it is paying off. And I'm glad they do get recognized. And as I tell my team, every project we finish, we leave reputation behind us, right? And whether that's good or bad, and that's what we need to work on. And exactly that's why we need to have the customer-centric view, and we need to do everything to make sure our quality is good and all that. So we just have to be consistent, and then we have to do it consistently and then raise our bar.
Got it. And just one last question from me. So the 2022 guidance, do we have any target for the new economy revenue contribution?
So we expect it to still have double-digit growth. Now in terms of -- what did we set the target or what the -- because as you see, like -- okay, so we are looking at about close to 19% in terms of account for our total, 19% of total revenue. But of course, this is a relative thing. So I like my total revenue is like exceeded my target. So even if this is a little bit smaller, I'm okay with that. But then if we use our current forecast and then it's about 18.9%, so we will grow from last year's 17.2% to 18.9%.
[indiscernible] [Operator Instructions]
Or even if you have some questions later that you could think of, Gary and Amy, our IR team, is always available for your questions. And if you need to engage me, Gary sure can arrange.
Yes. Thank you, President Chee. And there are currently no questions at this point. And then I'll pass the call back to Mr. Gary Lai. Gary, then, please proceed. Thank you.
Okay. Thank you again, everyone, to attend our conference call. See you next quarter. Bye-bye.
Thank you.
Thank you. Ladies and gentlemen, we thank you for your participation in Far EasTone's conference. There will be a webcast replay within an hour. Please visit www.fareastone.com.tw under the Investor Relations section. You may now disconnect. Goodbye.