Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q3 2008 Earnings Presentation
25 slides from Chunghwa Telecom's earnings presentation, Oct 30, 2008
Slide 1: 3Q 2008 Operating Results
3Q 2008 Operating Results October 30, 2008
Slide 2: Disclaimer
Disclaimer Note Concerning Forward-looking Statements Except for statements in respect of historical matters, the statements made in this presentation contain “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exch
Slide 3: 2008 Capital Reduction Timeline
2008 Capital Reduction Timeline Capital reduction $ Cash payment ( E ＋1 day ) Mar 2009 E End of trading suspension Reduction rate: 16.47% Reference price post reduction : (Closing price - Cash refund) (Capital stock after reduction/ Original capital stock) Example: D End of Feb, 2009 D Start of trad
Slide 4: Financials Overview
Financials Overview
Slide 5: Financials: Income Statement
Financials: Income Statement ROC GAAP (Consolidated) Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2007 Q3 2008 Growth Rate 2007 2008 Revenue 147.43 151.86 3.0% 51.72 50.94 (1.5%) EBITDA 77.67 75.58 (2.7%) 27.43 24.04 (12.4%) Operating Profit 47.81 46.93 (1.9%) 17.53 14.63 (16.6%) Net Income 37.79 36.52 (3
Slide 6: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2007 Q3 2008 Growth Rate 2007 2008 Operating costs 77.72 84.26 8.4% 27.46 29.06 5.8% Operating Expenses 21.90 20.67 (5.6%) 6.73 7.25 7.8% Marketing 17.03 15.75 (7.5%) 5.18 5.56 7.5% General and 2.49 2.68 7.9%
Slide 7: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2007 Q3 2008 Growth Rate 2007 2008 Internet 28.17 28.45 1.0% 9.51 9.49 (0.3%) Data 8.59 8.80 2.5% 2.90 2.98 2.5% Mobile 55.69 54.58 (2.0%) 18.95 18.29 (3.4%) Fixed line 44.75 43.07 (3.7%) 15.10 14.33
Slide 8: Financials: Cash Flow
Financials: Cash Flow ROC GAAP (Consolidated) Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2007 Q3 2008 Growth Rate 2007 2008 Net Cash Flow from 55.25 54.09 (2.1%) 22.57 12.58 (44.3%) Operating Activities CAPEX (15.75) (18.33) 16.4% (6.06) (7.02) 15.9% Free Cash Flow 39.50 35.76 (9.5%) 16.51 5.56 (66.3%)
Slide 9: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$ bn) 30 27.7 • 9 months Capex increased by 25.1 16.4% YoY mainly due to land 25 22.9 purchases worth NT$1.2 bn 20 18.3 • Future investments will focus on Capex (NT$bn) 15.8 15 core businesses and on migrating mobile and data 10 cus
Slide 10: Business Overview
Business Overview
Slide 11: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Mobile Communication, Internet & Data and Fixed-line Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Mobile Mobile 35.9% – #1 Mobile subscribers – 35.5% market share(b) (8.9 mm subs) Other (a) – #1 Mobile revenue 11.
Slide 12: Taiwan's Leading Internet and Data Provider
Taiwan’s Leading Internet and Data Provider Steadily growing broadband subscriptions and revenue Internet VAS Broadband Subscribers • Revenue drivers – Land Administration Information Service: Thousand 32.7% of VAS revenue 4,219 4,252 4,284 4,305 4,322 4,166 – Internet pornography gatekeeper: 9.3% o
Slide 13: Increasing Access Speeds and Fiber Deployment
Increasing Access Speeds and Fiber Deployment Expanding FTTx Fiber Subscriptions offerings at the speed of light Rising Average Bandwidth Per User Well-received Broadband Services Mbps 5 4 4.15 • Transitioning subscribers to higher 2.66 2.7 access speeds and expanded 3 2.14 2.56 bandwidth 1.60 2 – A
Slide 14: Number One Mobile Provider
Number One Mobile Provider Mobile Subscribers Healthy Mobile Migration Thousand • 3.24 million 3G subscribers as of September 2008, 76% of which are 9,000 8,581 8,656 8,699 8,724 8,779 8,870 utilizing 3G handsets • 79.8% of 3G subscribers migrated 1,685 1,993 2,291 2,588 2,894 from Chunghwa Telecom
Slide 15: VAS Promotional Initiatives
VAS Promotional Initiatives 3Q 08 Data Revenue: 9.5% of Mobile Revenue Successful Mobile VAS Rollout mPro Subscriptions Thousand • Successful “emome” VAS platform 60 continuing to generate growth 50 – Total VAS grew by 26.8% YoY as of Sep 40 2008 30 – Mobile Internet exhibited 48.5% YoY 20 growth 10
Slide 16: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence MOD/IPTV Subscribers Cross-Platform Solutions • Conduct cross-platform service operation, Thousand marketing and advertising 650 591 • Provide integrated bill for multiple services 600 550 508 • Supply debit cards for services 500 50% 435 • Improve customer in
Slide 17: NGN Progress
NGN Progress Deployment Services Rollout Achievement Stage 1 NGN/IMS Network (Q4) Switching • SIP: 448K lines • Multimedia Video Phone Networks • AG: 59K lines Backbone •New IP backbone 175Gbps (Q2) • Provide 10Gbps/1Gbps VPN •NGSDH 1,295GbE (Q4) Networks • Leased line service •ROADM 200λx10Gbps (Q4
Slide 18: Outlook
Outlook
Slide 19: Near-Term Strategic Overview
Near-Term Strategic Overview • Construct NGN to facilitate digital convergence • Enhance fiber coverage to provide high-speed services • Co-promote mobile terminal and service to Continue to Improve expand usage of wireless internet Core Business • Conduct cross-platform service operation to enhance
Slide 20: Near-Term Strategic Overview
Near-Term Strategic Overview • Strengthen CHT offering of intelligent energy saving solutions Alliance, JV & M&A • Provide solid ICT solutions for corporate customers • Fulfill corporate governance commitment • Increase energy utilization efficiency & CSR Management decrease green-house gas emission
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Network Convergence
Network Convergence Traditional Next Generation Network (NGN) Networks Application Layer 3rd party PSTN OSP AP AP (Open Service Platform) Control Plane and Data Plane PLMN (IMS) IP Network Layer /Transport Layer /Access Layer INTERNET Seamless Roaming © 2008 Chunghwa Telecom 22
Slide 24: Continuing Broadband Network Construction
Continuing Broadband Network Construction Thousands Port Fiber Deployment Plan Coverage FTTH 12,000 83% 90% FTTN/FTTB 75% 80% • FTTx access expected to 10,000 ADSL 67.40% exceed ADSL access by year 59.50% 1678 2178 70% 2011 1078 8,000 253 628 60% • FTTx coverage expected to reach 83% by year 2013 83
Slide 25: New Opportunities via NGN
New Opportunities via NGN HomeMarket Home Market PersonalMarket Personal Market EnterpriseMarket Enterprise Market • Entertainment • Video Phone • M-Office • Surveillance • M-commerce • FMC • Health Care • Location Based • IP-VPN • Information Services • IP Centrex/IP PBX • Education • Social Networ