Slide 1: 3Q 2010 Operating Results
3Q 2010 Operating Results October 27 , 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: Solid Performance
Solid Performance Consolidated Revenue Operating Income Net Income EBITDA NT$bn NT$bn 55 30 51.12 50.86 49.12 50.06 49.62 49.66 50 48.06 25 45 20 40 15 35 10 30 1Q 2Q 3Q 4Q 1Q 2Q 3Q 5 09 09 09 09 10 10 10 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 09 09 09 09 10 10 10 3Q 10 Revenue Breakdown (合併) Others 60.00% Net Inco
Slide 4: Consistent Return to Shareholders
Consistent Return to Shareholders Cash Return • Cash dividend for 2009 totaled NT$39.4bn • Cumulative cash returns of NT$bn 60 NT$38.5bn to shareholders in 50 the previous three rounds of 40 9.7 19.1 9.7 capital reduction 30 • 4th capital reduction round 20 42.6 34.6 40.7 37.1 39.4 approved by The B
Slide 5: Business Overview
Business Overview
Slide 6: Broadband Services - Growth Drivers in Fixed-Line
Broadband Services - Growth Drivers in Fixed-Line Broadband Subscribers Performance Thousand 4,306 4,304 4,317 4,325 4,346 Aug 10 ADSL NT$ Broadband ARPU 17.1% 16.9% 16.6% 16.3% 16.1% Free upgrades 8.0% 7.5% 7.0% 7.6% 800 8.7% 256K→512K 23.5% 1M→2M 29.8% 28.3% 27.1% 25.8% 2M→3M 780 7.7% 8.4% 8.0% 8.
Slide 7: Growing Momentum in MOD/IPTV
Growing Momentum in MOD/ IPTV MOD/IPTV Subscribers Performance Thousand • Launching Family Packages on Apr 15, 2010 900 900 Thousand % 800 + 7.3 300 742 200.0 Sub scrib er 691 200 160.0 700 668 667 665 100 66.4 600 9.6 0 500 Apr 10 Jun 10 Sep 10 Dec 10(E) Se p 09 De c 09 Ma r 10 Jun 10 Se p 10 De c
Slide 8: Number One Mobile Services Provider
Number One Mobile Services Provider Highest Subs & Lowest Churn VAS Strategies Thousand • Maintain mobile leadership by 12000 2.50% acquiring customers, minimizing churn 10000 2.00% rate, and increasing user loyalties via compelling user experiences Subscribers 8000 1.50% Churn 6000 1.00% • Create v
Slide 9: Smartphone - Value Driver for Mobile
Smartphone - Value Driver for Mobile Performance Successful Smartphone Strategies • Smartphone customers account for • Promote smartphones with variety of 23% of the total handsets CHT offered applications to increase premium in the first 9 months of 2010 customer penetration – The percentage is exp
Slide 10: New Business Initiatives for Future Growth
New Business Initiatives for Future Growth • Services launched: Music (hifree,KKBOX), Video (Sports, Movie), Surveillance, Multimedia Phone Convergence Services • Expecting single sign-on available on 3 platforms in early Dec 2010 NT$ mn 4,500 4,129 • To focus on ICT business lines and government pr
Slide 11: Overseas Development
Overseas Development JV • Vietnam (Viettel IDC): Major businesses include Hosting Co-location, Server rental, VAS etc • China (Sertech): Duplicate our experiences in call center cross strait ICT Subsidiary Market • China and Vietnam : Deploy global plan by local touch • Provide ICT-related solution
Slide 12: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure 35 • Future investments continue to 30 30.1 focus on core businesses and on 25.1 25.5 migrating mobile and data 25 customers to higher revenue platforms Capex (NT$bn) 20 15 – 3G / 3.5G / LTE – IP-based NGN 10 6.3 6.2 – FTTx 5 – Service
Slide 13: Financials Overview
Financials Overview
Slide 14: Financials: Income Statement Highlights
Financials: Income Statement Highlights ROC GAAP (Consolidated) Jan-Sep Jan-Sep Growth Growth (NT$bn) 2009 2010 Rate Q3 2009 Q3 2010 Rate Net Revenues 147.24 150.13 2.0% 50.06 50.86 1.6% Operating Costs and 104.01 105.90 1.8% 35.87 36.42 1.5% Expenses Income from Operations 43.23 44.23 2.3% 14.19 14
Slide 15: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) Jan-Sep Jan-Sep Growth Growth (NT$bn) 2009 2010 Rate Q3 2009 Q3 2010 Rate Domestic Fixed 52.95 52.05 (1.7%) 17.71 17.52 (1.1%) Local 24.62 24.06 (2.3%) 8.27 8.10 (2.1%) DLD 5.84 5.05 (13.5%) 1.99 1.65 (17.1%) Broadband Access 14.88 15.17
Slide 16: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) Jan-Sep Jan-Sep Growth Growth (NT$bn) 2009 2010 Rate Q3 2009 Q3 2010 Rate Operating Costs 82.94 84.08 1.4% 28.67 28.94 0.9% Operating Expenses 21.07 21.82 3.6% 7.20 7.48 3.8% Marketing 15.94 16.48 3.4% 5.53 5.73 3.5% General and 2.80 2.92 4.4% 0.8
Slide 17: Cash Flow
Cash Flow ROC GAAP (Consolidated) Jan-Sep Jan-Sep Growth Growth (NT$bn) 2009 2010 Rate Q3 2009 Q3 2010 Rate Net Cash Flows from 49.47 52.43 6.0% 15.22 19.49 28.1% Operating Activities CAPEX 16.56 15.50 (6.4%) 6.26 6.18 (1.4%) Free Cash Flow 32.91 36.93 12.22% 8.96 13.31 48.55% Cash and Cash Equivale
Slide 18: Q4 2010 Forecast
Q4 2010 Forecast ROC GAAP (Parent Company Only) Growth Growth (NT$bn) Q3 2010 Q4 2010E Rate Q4 2009 Q4 2010E Rate Net Revenues 46.83 46.80 (0.1%) 47.44 46.80 (1.3%) Operating Costs and 32.80 33.97 3.6% 34.45 33.97 (1.4%) Expenses Income from 14.03 12.83 (8.5%) 12.99 12.83 (1.2%) Operations Net Incom
Slide 19: Management Highlights
Management Highlights
Slide 20: Stable Cash Return plus Solid Growth Opportunity
Stable Cash Return plus Solid Growth Opportunity • Strong market leader in stable Taiwan telecom market • Solid performance driven by steady growth of mobile VAS and broadband services • Successful and continuing cost efficiency drive • Sustainable dividend payout with strong balance sheet and prude
Slide 21: Q&A
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Slide 22: Reference
Reference
Slide 23: Regulatory Update- F2M call pricing
Regulatory Update- F2M call pricing Payment to Mobile Operators (NT$/Minute) F2M call pricing Dominant Fixed- line ◎ Mobile Interconnection Fee (NT$2.15) + Transition Market Fee (NT$1.956~0) player No higher than ◎Transition Fee decreases to zero over the period of 6 CHT’s 2G tariff (CHT) before the
Slide 24: Broadband Network Roadmap
Broadband Network Roadmap Pave the way for customer’s future demands Multiplatform Applications/Services ADSL ADSL VDSL/EPON VDSL/EPON EPON/GPON EPON/GPON NG NG PON/WDM PON/WDM PON PON 256K~8M 10M~50M 50M~100M 100M~1G 1999 2006 2007 2010 2011 2015 2020 ADSL ： Asymmetric Digital Subscriber Line VDSL
Slide 25: Mobile Network Roadmap
Mobile Network Roadmap 2G 2G 2.5G 2.5G 3G 3G Beyond Beyond 3G 3G Pre-4G Pre-4G HSPA+ GSM GPRS WCDMA HSPA LTE FDD-LTE & TDD-LTE Trial 1994 2000 2005.07 2006.09 2008 2009 2010 Q2 2011 2012 3G/Wi-Fi integrated wireless 5000 Wi-Fi spots be built in ‘10 internet service launched in yearend of 09 WCDMA: W
Slide 26: 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