Slide 1: 2009 Operating Results
2009 Operating Results March 30 , 2010
Slide 2: Disclaimer
Disclaimer Note Concerning Forward-looking Statements This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
Slide 3: Building Sustainable Value for Shareholders
Building Sustainable Value for Shareholders Differentiation Factors Extensive Extensive Leading Leading Advanced Advanced Product Product Branding Branding & & Position Position in in Network Network & & Financial Financial Portfolio Portfolio with with Scale Scale Customer Customer Technology Techn
Slide 4: Delivering Consistent Shareholder Value
Delivering Consistent Shareholder Value Consistent Return to Shareholders Cash Return • High dividend payout ratio NT$bn 60 • Consistent capital management 50 40 9.7 19.1 • Cumulative cash returns of 30 NT$38.5bn to shareholders 20 45.3 42.6 34.6 40.7 37.1 in the previous three rounds 10 9.7 of capi
Slide 5: Business Overview
Business Overview
Slide 6: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Fixed-line, Mobile Communication, and Internet Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Domestic Fixed – #1 Local subscribers – 97.1% share (12.4 mm subs) Mobile – 87.2% share by minutes 43.6% Internet – #1 DL
Slide 7: Undisputed Leader in Fixed-Line Services
Undisputed Leader in Fixed-Line Services Maintain Stable Fixed-Line Voice Market Share 100% 97% 87% 80% 83% 60% 60% 40% 20% 0% 2006 2007 2008 2009 Local by subscribers Local by minutes DLD by minutes ILD by minutes © 2010 Chunghwa Telecom 6
Slide 8: Taiwan's Leading Broadband & Internet Service Provider
Taiwan’s Leading Broadband & Internet Service Provider Broadband Subscribers Strategies Thousand 4,311 4,310 4,302 4,306 4,304 • Migrate ADSL subs to FTTx to 4,322 16.9% offer quality network service and 17.0% 17.3% 17.4% 17.4% 17.1% increase revenue 8.0% 12.0% 11.20% 10.4% 9.6% 8.7% • Provide even
Slide 9: Expanding MOD/IPTV for On-Demand Services
Expanding MOD/IPTV for On-Demand Services MOD/IPTV Subscribers Content and Service Updates Thousand HUT 700 676 686 660 668 667 50% • Channels 600 591 ―92 SD channels and 5 HD channels on 508 line 500 394 435 30% ―9 new channels are under negotiation 400 • VOD 300 ―Over 10,000 hrs SD / HD VOD on lin
Slide 10: Number One Mobile Services Provider
Number One Mobile Services Provider Highest Subs Number Strategies Million 10 C HT TMW Group FET Group • Maintain mobile leadership by acquiring 9 8 customers, minimizing churn rate, and 7 6 increasing user loyalties via compelling user 5 4 experiences 3 2 1 • Create value via smartphone services 0
Slide 11: Smartphone Value Driver for Mobile
Smartphone Value Driver for Mobile Performance Handset Strategies • Promote smartphones with various • Data revenue account for 11.8% of applications to increase premium mobile revenue in 2009 customer penetration • Smartphone customers account for • Platforms support iPhone OS, Android and 7.5% of
Slide 12: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence Strategies Multi-screen Platform • Conduct cross-platform service • Live broadcasted on 3 screens operation, marketing and • IPTV advertising • Internet • Offer customer ubiquitous content • Mobile platform services via multi-screen platform – 2010 Taipei Int’
Slide 13: Satisfy Corporate Business Demand for Reliability and Efficiency
Satisfy Corporate Business Demand for Reliability and Efficiency Corporate ICT Business Strategies NT$ Million 4,500 4,000 3,643 • To expand business scope and focus Revenue 3,500 3,000 2,500 2,535 on ICT potential business lines and 2,000 government project 1,500 1,000 500 • ITS, iEn, information s
Slide 14: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$bn) • Future investments continue to 35 focus on core businesses and on 30 30.1 migrating mobile and data 25.1 25.5 customers to higher revenue 25 platforms Capex (NT$bn) 20 – 3G / 3.5G / LTE 15 – IP-based NGN 10 – FTTx 5 – Service
Slide 15: Property Development Updates
Property Development Updates Property Strategies Mid-term Targets over Next 5 Years • Overall strategy: primary focus • Total area to be under construction of on rental revenue 41,441 m2, or 1.01% of total property • Participate in urban asset redevelopment plan managed by – Consists of 7 pieces of
Slide 16: Regulatory Update
Regulatory Update • Wireline and wireless tariff reduction starting from April Tariff regulation 1, 2010 over the next 3 years • The National Communications Commission proposed an amendment to the Satellite Broadcasting Act that will Government allow the government, political parties and the militar
Slide 17: Regulatory Update: Tariff Regulations
Regulatory Update: Tariff Regulations Years Business X factor Target Applicable services in Operation effect 1 IP Peering Domestic wholesale SMP 2 leased line (Significant Fixed- 3 ADSL circuit 4.816% 3 Market line Power) Domestic long 1. Applicable from Apr distance call (excl. 1,2010 to Mar 31, 4
Slide 18: Financials Overview
Financials Overview
Slide 19: Financials: Income Statement Highlights
Financials: Income Statement Highlights ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q4 2008 Q4 2009 Rate Revenue 201.67 198.36 (1.6%) 49.81 51.13 2.6% EBITDA 96.74 92.70 (4.2%) 21.20 22.13 4.4% Operating Profit 58.57 56.39 (3.7%) 11.68 13.16 12.7% Net Income 45.01 43.76 (2.8%) 8.49
Slide 20: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q4 2008 Q4 2009 Rate Domestic Fixed 73.06 71.47 (2.2%) 18.56 18.52 (0.2%) Local 34.55 33.21 (3.9%) 8.50 8.60 1.1% DLD 8.48 7.40 (12.7%) 2.05 1.57 (23.5%) Broadband Access 19.96 19.90 (0.3%) 5.01 5.03 0
Slide 21: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q4 2008 Q4 2009 Rate Operating Costs 113.55 112.74 (0.7%) 29.25 29.79 1.9% Operating Expenses 29.55 29.23 (1.1%) 8.88 8.18 (7.9%) Marketing 22.73 22.29 (1.9%) 6.98 6.36 (9.0%) General and 3.68 3.77 2.3% 1.00 0.
Slide 22: Financials: Cash Flow Highlights
Financials: Cash Flow Highlights ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q4 2008 Q4 2009 Rate Net Cash Flow from 91.86 77.29 (15.9%) 35.95 27.82 (22.6%) Operating Activities CAPEX 30.12 25.48 (15.4%) 11.79 8.92 (24.3%) Free Cash Flow 61.74 51.81 (16.1%) 24.16 18.90 (21.8%) Cash
Slide 23: Q1 2010 Forecast
Q1 2010 Forecast ROC GAAP (Parent Company Only) Growth Growth (NT$bn) 2008 2009 Rate Q1 2009 Q1 2010 Rate Revenue 186.78 184.04 (1.5%) 45.21 45.46 0.6% EBITDA 95.13 91.11 (4.2%) 22.93 22.45 (2.1%) Operating Profit 57.16 55.14 (3.5%) 13.77 13.67 (0.7%) Net Income 45.01 43.76 (2.8%) 10.79 11.29 4.6% E
Slide 24: Outlook
Outlook
Slide 25: Mid-term Corporate Strategy
Mid-term Corporate Strategy • Strengthen advanced broadband network capabilities to facilitate business growth and transformation • Enhance competitiveness via innovative services • Focus on selected ICT services to better serve corporate clients • Explore mainland and overseas emerging markets for
Slide 26: Q&A
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Slide 27: Reference
Reference
Slide 28: Continuing Broadband Network Construction
Continuing Broadband Network Construction Thousand Port FTTH Coverage Fiber Deployment Plan FTTN/FTTB 85% 10,000 83% 90% ADSL 81.7% 9,000 Coverage 77% 78.2% 800 80% • FTTx access expected to 1100 1400 8,000 73% 201 500 exceed ADSL access by year 26 70% 2011 7,000 11 58.3% 2,791 8 3,576 4,000 4,400 6
Slide 29: Property Development Updates
Property Development Updates CHT Property Asset Total Book Value Items Amount Total Dimension （NT$） 409 hectares or Land 2,748 pieces 110bn 4,090,000 m2 Building 1,828 buildings 3,500,000 m2 40bn CHT Property Asset Currently under Development Estimated Estimated Estimated Starting Year for Investmen
Slide 30: Segment Reporting Redefined
Segment Reporting Redefined Old New Segment Major Items Segment Major Items Local Local Local DLD Fixed DLD DLD line Narrowband Access ILD ILD Domestic Fixed Broadband Access (ADSL+ FTTx) Communications Leased line- Local & DLD Cellular Service Mobile services Business MOD Internet services Domestic