Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q3 2007 Earnings Presentation
19 slides from Chunghwa Telecom's earnings presentation, Oct 31, 2007
Slide 1: 3Q 2007 Operating Results
3Q 2007 Operating Results October 31, 2007
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
Financials
Slide 4: Financials: Income Statement
Financials: Income Statement 3Q in US GAAP US GAAP US GAAP Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2006 Q3 2007 Growth Rate 2006 2007 Revenue 138.79 148.54 7.0% 47.38 52.12 10.0% EBITDA 73.17 77.05 5.3% 25.77 26.58 3.1% Operating Profit 42.45 47.92 12.9% 15.48 17.40 12.4% Net Income 30.91 38.30 23.9%
Slide 5: Financials: Business Segment Revenues
Financials: Business Segment Revenues 3Q in US GAAP US GAAP US GAAP Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2006 Q3 2007 Growth Rate 2006 2007 Internet 26.35 28.17 6.9% 9.02 9.51 5.5% Data 8.00 8.59 7.4% 2.75 2.90 5.7% Mobile 54.88 55.68 1.5% 18.68 18.95 1.4% Fixed line 47.12 45.91 (2.6%) 15.79 15.50
Slide 6: Financials: Costs & Expenses
Financials: Costs & Expenses 3Q in US GAAP US GAAP US GAAP Jan-Sep Jan-Sep (NT$bn) Growth Rate Q3 2006 Q3 2007 Growth Rate 2006 2007 Costs of Revenues 46.33 51.67 11.5% 15.46 17.49 13.1% Marketing Expense 14.80 15.24 3.0% 4.83 6.11 26.7% G&A Expense 2.63 2.29 (12.8%) 0.81 0.74 (8.1%) R&D Expense 2.0
Slide 7: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$ bn) 30 27.9 27.0 • 9 months Capex decreased YoY due to decline in Mobile 25 23.1 spending by NT$3.4bn 20 18.2 • Future investments will focus Capex (NT$bn) 15.8 15 on core businesses and on migrating mobile and data 10 customers t
Slide 8: Capital Management
Capital Management • Capital reduction Jan 9 $ Cash payment ( F ＋1 day ) – Reduction rate: 9.0909% Jan 8 F End of trading suspension – shareholders will be paid NT$9.09/ADR – Reference price post reduction: Year 2008 (Closing price - Cash refund) Year 2007 (Capital stock after reduction/ Original ca
Slide 9: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Mobile Communication, Internet and Data and Fixed-line Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Mobile Mobile – #1 Mobile subscribers 37.5% – 36.1% market share(b) (8.7 mm subs) – #1 2G revenue (a) Other 6.9%
Slide 10: Taiwan's Leading Internet and Data Provider
Taiwan’s Leading Internet and Data Provider Steadily growing broadband subscriptions and revenue Broadband Subscribers Broadband Access Revenue Thousands NT$ mn 4,166 4,219 4,036 4,114 21,000 3, 970 18,991 18,000 % 17.6% 20.6% 23.2% 24.9% 26.4% 16,668 +6.2 14,920 15,000 14,048 44.9% 43.2% 42.1% 41.5
Slide 11: 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 4 2.97 • Transitioning subscribers to higher 3 2.56 access speeds and expanded 2.14 bandwidth 2 1.60 – As of Sep. 2007,
Slide 12: Number One Mobile Provider
Number One Mobile Provider FTTxIncreasing data usage as a Fiber Subscriptions 6.8% of revenue Mobile Subscribers Successful Mobile VAS Rollout Thousands • Successful “emome” VAS platform 8,656 continuing to generate growth 8,416 8,487 8,556 8,581 9,000 – Total VAS exhibited 22.9% growth YoY in 597 9
Slide 13: 3G Deployment Gaining Traction
3G Deployment Gaining Traction ARPU Expansion from "Upselling" Innovative 3G Strategies • 1.99 million 3G subscribers as of • Customized handsets: Sep. 2007, of which 48.6% are – CHT9000 series utilizing 3G handsets – Customers subscribing to mPro • 84.3% of 3G subscribers migrated accounts for 49%
Slide 14: Undisputed Leader in Fixed-Line Services
Undisputed Leader in Fixed-Line Services ILD Prepaid Card Fixed-Line Market Share Millions 98% 98% 97% 97% 97% 400 372 100% 89% 89% 89% 89% 90% % 90% 320 71 88% 80% 86% 85% 87% 84% 240 218 70% 61% 62% 60% 58% 58% % 160 67 60% 127 50% 76 80 2003 2004 2005 2006 Sep-07 Local (a) Local (b) DLD ILD 0 Jan
Slide 15: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence MOD/IPTV subscribers Cross-Platform Solutions Thousands • Conduct cross-platform service 400 operation, marketing and advertising 358 350 % • Provide integrated bill for multiple 300 74 services 249 250 205 • Adopt debit cards for services 200 • Improve custom
Slide 16: Regulatory Update
Regulatory Update • MOD open platform was certified on Jan 30, 2007 • Operation plan approved by regulator earlier October MOD/IPTV • Island-wide service roll-out expected to be in place to Open Platform attract more channel aggregators and new subscriptions after tariff plan approved by NCC • Local
Slide 17: Business Outlook
Business Outlook
Slide 18: Near-Term Strategic Overview
Near-Term Strategic Overview • Expand broadband subscription and migrate existing subs to higher bandwidth service Continue to Improve • Enrich and diversify VAS to meet customer’s demand Core Business • Continue to work with big-name enterprises on integrated service to increase our customer base •
Slide 19: Q&A Session
Q&A Session