Slide 1: 2007 Operating Results
2007 Operating Results March 27, 2008
Slide 2: Disclaimer
Disclaimer 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 Exchange Act of 1934. Such forward-looking stat
Slide 3: Financials Overview
Financials Overview
Slide 4: Financials: Income Statement
Financials: Income Statement US GAAP (NT$bn) 2006 2007 Growth Rate Q4 2006 Q4 2007 Growth Rate Revenue 186.34 200.91 7.8% 47.55 52.37 10.1% EBITDA 97.19 102.26 5.2% 24.02 25.21 5.0% Operating Profit 56.30 62.81 11.6% 13.84 14.90 7.7% Net Income 42.07 49.45 17.5% 11.16 11.16 0.0% EBITDA margin (%) 52
Slide 5: Financials: Costs & Expenses
Financials: Costs & Expenses US GAAP (NT$bn) 2006 2007 Growth Rate Q4 2006 Q4 2007 Growth Rate Costs of Revenues 62.61 71.24 13.8% 16.27 19.56 20.2% Operating Expenses 67.44 66.86 (0.9%) 17.44 17.90 2.6% Marketing 20.65 21.79 5.5% 5.86 6.55 11.8% General and 3.32 3.12 (6.0%) 0.69 0.83 20.3% Administ
Slide 6: Financials: Business Segment Revenues
Financials: Business Segment Revenues US GAAP US GAAP (NT$bn) 2006 2007 Growth Rate Q4 2006 Q4 2007 Growth Rate Internet 35.57 37.69 6.0% 9.22 9.52 3.3% Data 10.96 11.54 5.4% 2.95 2.95 (0.1%) Mobile 73.02 73.75 1.0% 18.15 18.07 (0.4%) Fixed line 62.93 62.58 (0.6%) 15.81 16.67 5.4% Local 39.00 38.96
Slide 7: Financials: Cash Flow
Financials: Cash Flow US GAAP (NT$bn) 2006 2007 Growth Rate Q4 2006 Q4 2007 Growth Rate Net Cash Flow from 100.15 87.25 (12.9%) 31.65 33.38 5.5% Operating Activities CAPEX (27.68) (25.07) (9.4%) (9.23) (9.49) 2.82% Free Cash Flow 72.47 62.18 (14.2%) 22.42 23.89 6.56% Cash and Cash Equivalent at the
Slide 8: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$ bn) 30 27.7 • FY2007 capex decreased 9.4% 25.1 YoY due to decline in Mobile 25 22.9 spending by NT$4.1 bn 20 • Future investments will focus Capex (NT$bn) 15 on core businesses and on migrating mobile and data 10 customers to high
Slide 9: Business Overview
Business Overview
Slide 10: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Mobile Communication, Internet and Data and Fixed-line Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Mobile Mobile – #1 Mobile subscribers 36.7% – 35.8% market share(b) (8.7 mm subs) Other (a) – #1 Mobile revenue 7
Slide 11: Taiwan's Leading Internet and Data Provider
Taiwan’s Leading Internet and Data Provider Steadily growing broadband subscriptions and revenue Broadband Subscribers Broadband Access Revenue Thousands NT$ mn 4,166 4,219 4,252 4,036 4,114 21,000 19,976 18,991 20.6% 23.2% 24.9% 26.4% 28.5% 18,000 16,668 15,000 43.2% 42.1% 41.5% 41.0% 39.9% 12,000
Slide 12: 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 Proven Broadband Initiatives Mbps 3 2.66 2.14 2.56 • Transitioning subscribers to higher 2 access speeds and expanded 1.60 bandwidth 0.82 – As of Dec. 20
Slide 13: Number One Mobile Provider
Number One Mobile Provider Increasing FTTx Fiber Subscriptionsdata usage as a 7% of revenue Mobile Subscribers Successful Mobile VAS Rollout Thousands • Successful “emome” VAS platform 8,699 continuing to generate growth 8,487 8,556 8,581 8,656 9,000 – Total VAS exhibited 24.2% growth YoY in 943 200
Slide 14: 3G Deployment Gaining Traction
3G Deployment Gaining Traction ARPU Expansion from "Upselling" Innovative 3G Strategies • 2.29 million 3G subscribers as of • CHT3000-customized handset : Dec. 2007, of which 53.9% are utilizing 3G handsets – Easy to use, comprehensive functions • 85.2% of 3G subscribers migrated – Target group: Stu
Slide 15: Undisputed Leader in Fixed-Line Services
Undisputed Leader in Fixed-Line Services ILD Prepaid Card Minutes Fixed-Line Market Share Millions 98% 98% 97% 97% 97% 560 100% 493 89% 89% 89% 89% 89% % 90% 480 63 88% 80% 86% 85% 87% 84% 400 70% 303 60% 61% 62% 320 58% 58% % 43 60% 240 50% 160 122 2003 2004 2005 2006 2007 85 80 Local (a) Local (b)
Slide 16: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence MOD/IPTV subscribers Cross-Platform Solutions Thousands • Conduct cross-platform service operation, 450 % marketing and advertising 400 61 394 350 • Provide integrated bill for multiple services 300 • Adopt debit cards for services 249 250 • Improve customer i
Slide 17: Strategy
Strategy
Slide 18: 2008 Strategic focuses – 3O's
2008 Strategic focuses – 3O’s • Focus on business alliance in Greater China and Southeast Asia markets • Establish a robust backbone network to meet bandwidth demand in emerging market Opportunities VAS NGN + Mobile • Enhance MOD, emome and hiChannel • Increase average bandwidth platform per user to
Slide 19: Near-Term Strategic Overview
Near-Term Strategic Overview • Continue migrating customers to higher speed broadband services to promote fiber service • Upgrade mobile network to encourage usage of mobile Continue to Improve internet service Core Business • Construct NGN to facilitate digital convergence • Conduct cross-platform
Slide 20: Near-Term Strategic Overview
Near-Term Strategic Overview Energy Saving • Save gasoline, electric power, and papers & • Decrease green-house emission Environmental Protection • Maintain high dividend payout • Explore further opportunities to enhance shareholder Continued Commitment to returns through capital management Sharehol