Slide 1: 3Q 2016 Operating Results
3Q 2016 Operating Results October 27, 2016 TSE: 2412 NYSE: CHT
Slide 2: Disclaimer
Disclaimer STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audi
Slide 3: Business Overview
Business Overview
Slide 4: Chunghwa Telecom Overview
Chunghwa Telecom Overview Strong Market Position (a) Mobile Performance Domestic Fixed – #1 Local Accumulating 6.2 million 4G • 93.6% share by subs (11.01mn subs) subscribers by the end of September • 85.1% share by minutes 2016 – #1 DLD • 82.6% share by minutes Postpaid subscriber net additions – #
Slide 5: Number One Mobile Services Provider
Number One Mobile Services Provider Mobile Internet Adoption Strategy Mobile Internet Subs as % of Postpaid Subs Rolling out 2.6G service in March to 67.0% 69.4% 72.3% offer best QoE to 4G customers 7000 60.1% 63.2% 80% 6000 60% Raising threshold for unlimited data 5000 6661 40% 5969 6276 6433 4000
Slide 6: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Leveraging network capability to offer high- Broadband Access Revenue NT$ mn 714 721 720 712 716 ARPU NT$ speed upload service 5,000 4,194 4,289 4,277 4,210 4,278 Leveraging Big Data capability for precision 600 marketing and precision netwo
Slide 7: MOD/ IPTV Service
MOD/ IPTV Service Performance Strategy Subscriber market share (CATV+IPTV) Continuing to enrich content, including movies, YoY remained at around 20.4% in Q2 drama, TV series for SVOD 2016 Enhancing both MOD and OTT user interfaces Household TV Usage rate increased to Leveraging the existing broadba
Slide 8: Enterprise ICT Initiatives
Enterprise ICT Initiatives Performance Strategy Leveraging our advantage on network Information security and cloud service infrastructure, IDC, CDN, etc. to expand revenue increased 67% YoY for the ICT business first 9 months of 2016 Launching highest-rated cloud IDC to Personal Cloud (Hami+) subscr
Slide 9: Financials Overview
Financials Overview
Slide 10: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Growth Jan-Sep Jan-Sep Growth (NT$bn) Q3 2016 Q3 2015 % 2016 2015 % Revenues 58.52 56.18 4.2 171.66 169.57 1.2 Operating Costs and 47.02 42.10 11.7 133.48 130.47 2.3 Expenses Income from 11.49 14.04 (18.1) 38.15 39.02 (2.2) Operations Net Income2
Slide 11: Financials: Business Segment Revenues
Financials: Business Segment Revenues Growth Growth (NT$bn) Q3 2016 Q3 2015 Jan-Sep 2016 Jan-Sep 2015 % % Domestic Fixed 18.81 17.91 5.0 55.03 53.21 3.4 Local 7.94 8.50 (6.5) 23.91 25.35 (5.7) DLD 0.73 0.80 (9.0) 2.18 2.36 (7.9) Broadband Access 4.75 4.81 (1.2) 14.29 14.47 (1.3) MOD 0.59 0.53 11.7 1
Slide 12: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Growth Jan-Sep Jan-Sep Growth (NT$bn) Q3 2016 Q3 2015 % 2016 2015 % Operating Costs 38.52 33.90 13.6 108.87 106.30 2.4 Operating Expenses 8.50 8.20 3.6 24.61 24.17 1.8 Marketing 6.45 6.18 4.3 18.46 18.19 1.5 General and Administrative 1.11 1.10 0.4 3.36 3.36
Slide 13: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Growth Jan-Sep Jan-Sep Growth (NT$bn) Q3 2016 Q3 2015 % 2016 2015 % Net Cash Flow from 13.38 17.42 (23.2) 33.28 47.33 (29.7) Operating Activities CapEx 5.49 5.15 6.6 12.31 15.47 (20.4) Free Cash Flow 7.89 12.27 (35.7) 20.97 31.86 (34.2) Cash and Cash Equivalent
Slide 14: Operating Results vs. Forecast
Operating Results vs. Forecast Consolidated Q3 2016 Q3 2016 Achieving Jan-Sep 2016 Jan-Sep 2016 Achieving (NT$bn) (A) （E） % (A) (E) % Revenues 58.52 58.04 100.8 171.66 170.75 100.5 Operating Costs and 47.02 45.13 104.2 133.48 134.04 99.6 Expenses Income from 11.49 12.89 89.2 38.15 36.69 104.0 Operat
Slide 15: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure Budgeted capex for 2016: NT$30.6 NT$ bn bn 50 Continue to focus on core 20% businesses for future investments 45 16.0% – 4G 14.4% 13.1% 10.8% 40 36.4 9.1% 0.6 32.6 7.2% 10% – FTTx 35 1.6 30.6 – Service Platforms Capex as % of Revenue 4.
Slide 16: Q&A
Q&A