Chunghwa Telecom Co., Ltd.

Good afternoon, ladies and gentlemen. Welcome to Johar Telecom conference call for the company's first quarter 2023 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, directions for submitting your questions will be given in the question and answer session. For your 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 CHT IR website, www.cht.com.tw slash IR, under the IR calendar section. And now I would 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 first quarter 2023 results conference call. Joining me on the call today are Harrison Guo, our chairman and CEO, and Susan Chang, our chief financial officer. During today's call, management will begin by providing the highlights in our business overview in the first quarter, followed by a discussion of our segment performance and the financial results. After, we will move on to the question and answer portion of the call. On slide two, please announce the safe harbor statements. Now I will turn the call over to our chairman. Chairman Guo, please go ahead.

Thank you, Angela. And hello, everyone. Welcome to our first quarter results conference call. As this is the first time I'm speaking to investors, as the chairman and the CEO of Sunhua, I would like to thank all our investors, for your long-term support over the past years, and looking forward to continue our relationship going forward. Sena Telecom is truly a trustworthy company with growth opportunities and a strong corporate governance. Now please flip to slide four for the highlights of the first quarter. To beginners, we would like to bring to your attention that NCC, our regulator, gave its conditional approval of the mergers among our peers in the first quarter, which we believe is a positive move for shipping healthy market competition in Taiwan. Based on the steady 5G penetration and the future industry landscape, we expect stable mobile market development that will further support our revenue growth momentum going forward. For the results of the first quarter 2023, we were pleased that we beat all financial targets despite the uncertainties in the macroeconomic context. Thanks to the vibrant growth of our three business groups, which all deliver positive year-over-year increases in each segment's revenue and profits. In addition, with our consistent business strategies that track our mobile and broadband services, our telecom services continue to deliver robust performance in the first quarter, including our 6.6% year-over-year mobile service revenue growth that outperforms to lead the industry, as well as the encouraging fixed broadband high-speed 300 megabits per second and above service subscriptions exceeded the threshold of 1 million. Our technology capabilities also continue to feel the performance of innovative applications. As a result, EBG's emerging enterprise application revenue demonstrated strong growth and was upped by more than 13% year-over-year. For CBG subscription and advertisement revenue, from MLB and home video, accelerated due to our 5G plus 4G multi-angle broadcasting capabilities utilized in the broadcasting of the World Baseball Classic during the quarter. Now, let's move on to a closer look at our mobile business on the smart side. In the first quarter, we were delighted to report that we expanded our leadership in subscriber share and revenue share in Taiwan's mobile market, climbing to 36.8% and 39.7% respectively, with growth on a year-over-year and quarter-over-quarter basis. assuming our sustainable leading position in Taiwan. We are even more pleased to see our revenue share exceeded our subscriber share by 2.9%, reflecting a healthier subscriber structure compared to our peers. Our mobile service revenue also took the lead in the industry with 6.6% increase, maintaining its growth for 21 consecutive months on a year-over-year basis, owing to the upsales resulting from 5G migration and the increase of post-period subscriber numbers. For those who migrate from our 4G to 5G, we observed an average 43% uplift in their mobile monthly fees. Additionally, owing to the revitalized cross-border activities, we see our running revenue and the prepared revenue continue to ramp up in the first quarter. Total mobile subscriber numbers, excluding ROTCs, was up by 4.2% year-over-year, backed by the increase in prepaid and postpaid subscriber numbers, maintaining its upward trajectory for the eighth consecutive quarter. In April, we teamed up with MyMobile Taiwan to leverage digital capabilities on both sides gently increase better quality of customer service. We will continue our value creation strategy to expand our ecosystems going forward. Moving on to slide six, unified and update of our fixed broadband business. We roll out in the second half of 2022, which was very well received and beyond our expectation. Following the speed upgrade momentum, we are delighted to announce that our accumulated subscribers, about 300 megabits per second and above, past the threshold of 1 million in the first quarter. This success affirmed our strategy of focused strategy allocation on attracting high-speed service adoption. Going forward, we will follow the success and tilt our resources to grow 300 megabits per second fast 100 megabits per second and bigger level subscriptions. In the first quarter, total fixed broadband revenue increased by 2.5% year-over-year, driven by the digital trend and its opportunities. Fixed broadband R2 also continued its growth trend for the 14th the consecutive quarter, increasing by 0.8% year-over-year. Now, let's move on to the performance of our customer-centric business group. Slide eight presents the performance of our CDG group. In the first quarter, income before tax CDG increased by 3.3% year over year, mainly due to the enduring growth of telecom services. Total revenue of CDG increased by 4.1% year over year, while mobile service revenue grew by 7.2% year over year, propelled by stable 5G migration and the increase of post-pay subscriber numbers. Phase 9 service revenue was flat, while Phase 12 revenue maintained its upward trend owing to the successful upsell along with the speed upgrade and the strong growth of home Wi-Fi services. Sales revenue increased by 4.4% year over year, mainly due to the stabilized iPhone supply during the quarter. Slide nine further illustrates our consumer business group highlights. In the first quarter, our multiple play package continue to support the growth momentum of our CDG business. With a quarter number of mobile, fixed broadband and Wi-Fi services all together demonstrated 17.6% quarter-over-quarter growth. In particular, our home Wi-Fi subscription numbers increased by 1.5 times on year-over-year basis, boosting our subscription-based revenue and sustaining the popularity of home-centric applications. The number of our video subscriptions increased during the quarter thanks to our attractive content and effective marketing strategies. MLB's revenue and subscriber number increased, mainly due to our successful bundled plans promoting MLB and Facebook Band all together. Company video signed off. Third, thanks to our well-received broadcasting on the World Baseball Classic held in Taiwan. We demonstrated our 5G plus 14 Panorama broadcasting technology and delivered excellent viewing experiences. The success was also reflected in the growth of our advertisement revenue. We will continue to invest in sports events and exclusive content to maintain our video platform, leading position in Taiwan. Please turn to slide 10 for an overview of our enterprise business group performance. In the first quarter, EBG reported a 3.7% year-over-year increase of its income defaulted, demonstrating its robust growth momentum. On a year-over-year basis, total revenue EBG increased by 8.2%, mainly driven by the strong growth of our ICT business. Revenues of 5G private network, IDC, cloud, cybersecurity, and the big data services all reported double-digit year-over-year growth. In addition, other revenue of EBG increased by 32.6% year-over-year, mainly due to the recognition of ST2 satellite compensation from the government. Mobile service revenue was flat in the first quarter, mainly attributable to the continued 5G up-selling as well as the growth of international running revenue, driven by the recovery of international business activities and tourism. Furthermore, we were glad to see the digital transformation trend and its opportunities continued. to enhance our data communication and broadband access revenue. Although fixed net revenue decreased year over year, in the first quarter impacted by decreased voice revenue. Slide 11 illustrates our enterprise business highlights. In the first quarter, On a year-over-year basis, our total enterprise emerging application revenue increased by 31.5% as most of our major applications demonstrated a double-digit growth rate. In particular, 5G project network and the big data analysis applications showed that share market potential by doubling the revenues on a year-over-year basis. In fact, we constantly leverage 5G technology to advance the small medical applications. In the first quarter, we successfully facilitated 5G programming work in the hospital to create the immersive AR environment for residency surgical training via three-dimension technology assistance, which is also a milestone for our hospital partners. Furthermore, our AI platform solutions combine cutting-edge AI and the big data analysis capabilities Our opinions were received by customers. We continued to acquire chatbots and image analysis projects in the area of judicial power saving practices and the security industry. Also, excited to see our cloud, IDC, and cybersecurity services all achieve the significant year-over-year revenue growth in the fourth quarter with 39%, 39%, and 32% growth, respectively. Owing to the increasing demands of digital transformation trend and its opportunities, Today's talk illustrates our international business performance. In the first quarter, our international business growth revenue increased by 24.3% year-over-year, mainly driven by emerging business revenue and fixed broadband revenue due to strong demand of international private list circuits. IDC, and the cloud services for global clients. In the first quarter, our subsidiary in Japan made great strides as they successfully received the green light to acquire large-scale ICT construction projects in Japan by obtaining Japan's specific construction license for the telecommunication construction business. With the license, we anticipate foreseeing business expansion in Japan, particularly the area of large ICT projects and 5G private network construction. Now I would like to turn the call to Vincent for our financial highlights.