Yvonne Li President 4904 (TWSE) 2011 2Q Investor Update 2011 2Q Investor Update 2 Disclaimer This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information. In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.
Transcript
Yvonne LiPresident
4904 (TWSE)
2011 2Q Investor Update2011 2Q Investor Update
2
Disclaimer
This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.
In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.
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AgendaAgenda
I.I. Market OverviewMarket Overview
II.II. 2011 2Q Performance2011 2Q Performance
III.III. Business UpdateBusiness Update
4
(NT$mn)
51,831
17,661 20,324
6,021 6,057
51,948
0
20,000
40,000
60,000
80,000
100,000
2Q-10 2Q-11
Mobile Domestic Calls Int'l Calls
� Total Telecom Market Revenue in 2Q’11increased ����3.7% YoY with
� Mobile revenue (2G+3G)�0.2% YoY
� Fixed line revenue (domestic calls + Int’l call) �11.4% YoY (due to F2M
2011 1H Consolidated EBITDA2011 1H Consolidated EBITDA 2011 1H Net Income2011 1H Net Income
����17%YoY
�2%YoY
�15%YoY
����23%YoY
����8%YoY
�3%YoY
����11%YoY
�6%YoY
����13%YoY
����3%YoY
�8%YoY
����3%YoY
12
(k subs)
703762
861
984
1,109
1,272
0
300
600
900
1,200
1,500
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
Data Service* Subscriber GrowthData Service* Subscriber Growth
Strong growth Strong growth
momentummomentum
Source: Company data
* Data Service includes smartphone related data rate plans and datacard, broadband, GPS related products
Mobile Data PerformanceMobile Data PerformanceAccelerated Mobile Data GrowthAccelerated Mobile Data Growth
NT$ mn
2,1282,288
2,4942,732
2,953
2,015
15.2%16.5%
18.0%
21.4%20.3%
15.9%
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'110%
5%
10%
15%
20%
25%
Data Rev Data % of Service Rev
Data %
FET Mobile Data Growth FET Mobile Data Growth
�4%YoY
�10%YoY
����39%YoY
�18%YoY
�28%YoY
�36%YoY
����67%YoY
�58%YoY
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Mobile Data PerformanceMobile Data PerformanceThe Growth DriverThe Growth Driver
Mobile Data Revenue Breakdown in 2Q’11Mobile Data Revenue Breakdown in 2Q’11
1%1%
25%
7% 6%2% 2% 2%
50%
0%
20%
40%
60%
80%
WirelessBroadband +
transmission
Text SMS MobileAdvertising
Music e-Commerce Non-textMessaging
Entertainment Finance SocialNetworking
Mobile Data Revenue Mobile Data Revenue �������� 39% 39% YoYYoY (vs. 2Q’10), and major growths from:� Wireless broadband + Transmission (���� 95%YoY)� Entertainment (���� 92%YoY)� e-Commerce (���� 31% YoY)
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102%18,171+4.4%17,67518,452▶ Total Revenue
104%1,984+6.0%1,9472,064▶Net Income
$0.60
29.9%
5,278
15,258
2011 Q1Actual
+6.0%
────+1.8%
+3.8%
QoQ%Achieve-
ment %2011 Q2Forecast
2011 Q2Actual
ItemUnit: NT$ million, except for EPS
$0.61
30.1%
5,460
15,722
104%$0.63▶ EPS(1)
────29.1%▶ EBITDA Margin %
98%5,372▶ EBITDA
101%15,838▶ Service Revenue
Consolidated Financial AchievementConsolidated Financial Achievement2011 Q2 Actual vs. 2011 Q2 Forecast2011 Q2 Actual vs. 2011 Q2 Forecast
Source: FET consolidated financials (1) EPS was based on current outstanding shares of 3,258,501K
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Consolidated Financial AchievementConsolidated Financial Achievement2011 1H Actual vs. 2011 1H Forecast2011 1H Actual vs. 2011 1H Forecast
Source: FET consolidated financials (1) EPS was based on current outstanding shares of 3,258,501K
Source: FET Consolidated financials* Net Cash = Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives – Total Borrowing
(NT$ mm unless otherwise stated)
9,194
3,452
1,750
10,896
68,068
22..55% % ────────6,348
3,837
$0.63
8,884
3,641
4,025
8,500
74,119
55..22% % ────────3,676
1,749
$0.60
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AgendaAgenda
I.I. Market OverviewMarket Overview
II.II. 2011 2Q Performance2011 2Q Performance
III.III. Business UpdateBusiness Update
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(%)
18%
30%
58%
26%
45%
58%
0%
20%
40%
60%
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
� Smart devices (smartphones + tablets ) accounted 58% of total new devices sold in 2Q’11
� Monthly tablet sales exceeded netbooksstarting Q3 (In June, tablets increased to 10% of new smart devices sold)
� Smartphone penetration* reached 17-18% of total postpaid subs in 2Q’11
� APRU: average smartphone user’s ARPU is ~1500; while iPhone users’ARPU is ~NT$2200
� Usage: Avg smartphone user’s data usage is 700-800 MB / month; while iPhone and HTC high-end Android usage is 1.2-1.4GB / month and tablet’s usage is 1.5-1.7GB / month
Some StatisticsSome StatisticsSome Statistics
Smart Device StatisticsSmart Device StatisticsStrong Data Growth driven by Smart Devices UptakeStrong Data Growth driven by Smart Devices Uptake
Smart Device as % of Total Device SoldSmart Device as % of Total Device SoldSmart Device as % of Total Device Sold
* Smartphone penetration means smartphone users as % of total postpaid subs excluding data only subs
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2H 20112H 2011▶▶ All brands and all price tiers to come All brands and all price tiers to come
into the marketinto the market……..
1H 20111H 2011▶ Has been offering ~30 smart devices
SamsungView Sonic
Samsung
AppleView Sonic
ZTE
ZTE
Device PortfolioDevice PortfolioFull Range of Smartphone and Tablet DevicesFull Range of Smartphone and Tablet Devices
HTCDesire ZLG E720
Acer LiquidMetal
iPhone 4
Google PhoneIDEOS
Acer Moto
Huawei
HTC
HTC Aria
HTCLegend black
HTCDesire HD
Samsungi9003
Acer Liquidmini
HTCDesire S
AsusHTC
WildfireS
Huawei X3
Apple
Sony Ericsson
Black O
Moto Atrix
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▶▶ Bella Apps Bella Apps -- #1 download of lifestyle Apps#1 download of lifestyle Apps in Apple App in Apple App
StoreStore
▶▶ Launched Launched Video StoreVideo Store through through cocoops ops with with CatchPlayCatchPlay
