Chunghwa Telecom Co., Ltd.

Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company's third quarter 2022 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, the reactions before submitting your questions will be given in the question-answer session. For information, this conference call is now being broadcast live over the Internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHTIR website, www.cht.com.tw.ir, under the IR calendar section. Now I'd like to turn it over to Ms. Angela Tsai, the Director of Investor Relations. Ms. Tsai, please go ahead.

Thank you. This is Angela Tsai, Director of Investor Relations for Zhongha Telecom. Welcome to our third quarter 2022 result conference call. Joining me on the call today are Harrison Guo, our president, Vincent Cheng, our chief financial officer. During today's call, management will begin by providing an overview of our business in the third quarter, followed by a discussion of our segment performance and the financial highlights. After, we will move on to the question and answer session. On slide two, please note our safe harbor statement. Now, I will turn the call over to President Guo. President Guo, please go ahead.

Thank you, Angela, and hello, everyone. Welcome to our third quarter results conference call. I will now provide an update on our robust performance in the third quarter. Let's begin on slide four for an overview of our mobile business. In the third quarter, we see the positive development of Taiwan's mobile market as operators chose 5G migration in a steady manner, focusing on creating value for customers, which we believe is good for healthy market competition. Looking into quarter four, the mobile market in Taiwan is expected to remain steady any potential economic uncertainty. In terms of market position, we are pleased not only to maintain our leadership in Taiwan's mobile market, but also successfully to achieve year-over-year growth in terms of both revenue and subscriber share for four consecutive quarters. In the third quarter, we increased our revenue share to 39.4% and the subscriber share to 36.5% on a year-over-year basis, respectively. Our well-positioned revenue share is larger than the subscriber share, suggesting that our customer-centric business strategy is proven successful. We are confident that we can maintain our leadership position going forward. Please turn to slide five for a closer look at our mobile business. In the third quarter, our total mobile service revenue increased by 4.2% year-over-year, attributable to the outperforming subscriber number increase and the upsell resulting from 5G migration. Mobile subscriber numbers, excluding IoT themes, increased by 2.6% year-over-year, partly due to the increase of both postpaid and prepaid themes. In particular, our prepaid numbers grew significantly. reflecting our success in enhancing sales in the segment of foreign workers. In addition, our Chong Wei continues to remain the lowest among our peers. Our postal pay approved reached 1.8% year-over-year growth in the third quarter, maintaining its upward trajectory for six consecutive quarters. Meanwhile, we observed an average 32% uplift in mobile monthly fees attributable to consumer migration from 4G to 5G. With our most extensive network deployment and the solid fundamentals, we are confident in our ability to maintain leadership in Taiwan's mobile market in the face of competition resulting from industry consolidation. Moving on to slide six, you may find an update of our fifth broadband business. In the third quarter, our sixth broadband business continued its upward trend for 12 consecutive quarters. In terms of our pool growth, as total subscriber numbers increased by 0.5% year over year, we are expected to see the speed of adoption increase at a faster pace. Thanks to our effective promotion package, Shuzai Beijing, in the third quarter, 75% of Shuzai Beijing adopters upgrade their service speed. In addition, more than 60% of the adopters sign up for service speeds of 500 megabits per second or higher, paired with upstream speeds about 250 megabits per second, which distinguishes us from our peers. Meanwhile, the accumulated sign-up for service speeds of 300 Mbps or higher increased by 43.7% year-over-year in the portal, mainly attributable to those who migrated their services from service speeds of 100 Mbps or below. In terms of financial performance, our fifth broadband revenue and approved year-over-year growth in the third quarter, indicating increases of 3.3% and 2.4% respectively. Now, let's move on to the performance of our customer-centric business groups. Slide eight presents the revenue of our consumer business group, our CDG. As each business line of consumer business group delivered positive results in the third quarter, total revenue of consumer business group increased by 3.8% year over year. Mobile service revenue of consumer business groups grew by 5.4% year-over-year, mainly due to the increases of post-pay subscriber numbers and 5G migrations. Six-line service revenues remained flat year-over-year, while we are delighted to see successful upsells prepared by the . However, revenue continues to decrease, even though the decline has . In addition, sales revenue of consumer business groups increased by 5.4% year over year in the third quarter, mainly due to early launch of iPhone series in September with better sales of iPhone 14 high-end models. Slide 9 further illustrates our consumer business group highlights. As we continued our efforts in promoting a multiple play package to enhance consumer business groups overall performance. In the third quarter, the number of subscribers signed up for our mobile broadband and Wi-Fi services all together demonstrated a 33.8% quarter-over-quarter growth. In particular, our home Wi-Fi device subscription increased by 75.3% year-over-year, contributing to subscription-based revenue and taking the way for our home-centric applications. In the third quarter, our investment in original streaming content helped us successfully maintain our status as the largest video platform in Taiwan. Attracted by the exclusive from us, we invest our subscriber numbers for video services, including MOD and the humming video, charging monthly fees instead of one-time sign-ups, achieving 7.4% year-over-year growth. exceeding 2.7 million. As the FIFA World Cup is coming up in the first quarter, we are ready to bring our customers the most exciting experiences. We obtained the exclusive right to broadcast 64 World Cup games and will combine 5G and AR technology to deliver super attraction, which we believe will significantly boost our video service sign up in the fourth quarter. Please turn to slide 10 for an overview of our enterprise business group performance. In the third quarter, Enterprise Business Group maintained its growth trajectory by demonstrating 5.1% revenue increase on a year-over-year basis, mainly attributable to the robust growth of our ICT business. Enterprise ICT business revenue increased by 10.4% year-over-year, mainly due to our emerging growth engines, particularly IEC, cybersecurity, and cloud services. Other revenues of enterprise business groups also increased due to the grant of 5G government subsidies and the launch of iPhone 14. Additionally, Although digital transformation demand continued to drive up data communication and the broadband access revenues, especially demand for speed updates from schools, our 6-9 revenue in the third quarter decreased slightly year over year. Slide 11 illustrates our enterprise business highlights In the third quarter, our total enterprise emerging application revenue increased by 16.1% year-over-year, as most of our major applications demonstrated strong performance by exceeding 20% year-over-year growth. 5G private network revenue delivered multiple-fold growth, mainly due to the increased accumulated projects that bring in recurring revenues. For big data analysis, cloud and IDC services, we are delighted to see year-over-year revenue growth of 73.3%, 26.4%, and 26%, respectively. all into the completion of some government-related projects, while cybersecurity revenue reached 28.4% growth. Slide 12 illustrates our international business performance. In the third quarter, our international business group revenue continued to increase by 22.6% year-over-year. maintaining its growth momentum attributable to the rising demand for IBC and the cloud services from global clients. In addition, other revenues increased as well, mainly due to the contribution from subsidiaries in Vietnam and Thailand. In September, our 5G private network project in Thailand announced its launch of operations. Proving our success in introducing smart manufacturing services abroad, we plan to replicate this successful model and continue to cultivate the Asian market. Now, I would like to turn the call to Vincent for our financial highlights.