Chunghwa Telecom Co., Ltd. Q4 FY2025 earnings call

• 2025 full-year revenue, operating income, income before tax, and EPS all exceeded the upper end of guidance. Full-year EPS reached TWD 4.99, an 8-year high.
• Taiwan mobile market: Mobile revenue market share climbed to 41%, subscriber market share to 39.7% in 2025. 5G subscriber market share was 39.2%, 5G penetration rate among smartphone users was 46.4%, and mobile service revenue in Q4 grew 4.7% year-over-year with postpaid ARPU up 3.6% year-over-year.
• Fixed broadband business: Q4 fixed broadband ARPU reached a new high of TWD 819 per month, up 3.8% in revenue and 0.5% in subscribers year-over-year.
• Consumer application services: Multiple-play packages increased 17% year-over-year for 16 consecutive quarters. Hami video service ARPU in Q4 up over 25% year-over-year. Consumer cybersecurity subscription revenue up 11% year-over-year.
• Enterprise ICT business: Q4 ICT revenue down 6% year-over-year due to higher comparison base, but full-year ICT revenue still saw robust growth. IDC, Big Data, and 5G private network revenue grew 19%, 3%, and 88% year-over-year respectively.
• International business: Q4 international subsidiaries revenue down 7% year-over-year, but Southeast Asia market revenue up 12% year-over-year. Malaysia subsidiary commenced operations in Dec 2025. Secured several AI supply chain projects in the US for 2026.

1. Consumer Business Group (CBG): Fourth quarter revenue grew 6% year-over-year, supported by mobile and fixed broadband services and higher sales driven by iPhone demand. 2. Enterprise ICT Business (EBG): Fourth quarter revenue decreased 7.9% year-over-year as most major ICT projects were already recognized in previous quarters. 3. International Business Group (IBG): Revenue grew 2.5% year-over-year, driven by rising demand for international IDC services and stronger roaming revenue.

• 2026 total revenue expected to increase 2.5%-3.2% year-over-year, driven by core business growth, including 5G service and fixed broadband speed upgrade promotion.
• Operating costs and expenses expected to increase 3.5%-3.7% year-over-year due to investment in talent and infrastructure.
• EPS expected to be in the range of TWD 4.82 to TWD 5.02.
• 2026 capital budgeting: TWD 31.91 billion budgeted. Mobile-related CapEx expected to decrease 6.3% year-over-year; non-mobile related CapEx expected to increase 24%, including expanding submarine cables and building IDC data center.

Q: A quick question on the CapEx. If you can give some more detail about the big increase in the nonmobile CapEx, which is almost 24% for 2026? And also, can you provide some more details about -- you're looking at like almost 3.5% to 4% increase in the operating costs, which is higher than the revenue growth as well. So can you talk a bit about that as well?

A: Okay. Thank you very much, Raj. So the first question is about CapEx, about more detail on mobile CapEx, about 24% increase in 2026. So there are a couple of categories, as I just mentioned, this includes the fixed line maintenance, which consists of quite the big proportion of the fixed line maintenance. And the second is about the satellite and also the cables. And the third one is the IDC. I should say that mainly that the increase mainly coming from the IDC and also the satellite portion. And so this is for the first part. And the second part about the increase about 3.5% of operating cost. I think that one of the main -- there are 2 main portions. One, a couple of the reasons is that one is the human resource, the talent. I think that, as you know, that we are in emerging -- in a growing -- we have a lot of the sectors in IDC. We need a lot of the AI-related talent. So investment in the human resource is one important area. And the second is that electricity. I think that we are not so sure about the electricity policy in Taiwan. So we are a bit cautious. Also, this is also a second big area that takes the cost. The third one is about depreciation. That in the early stage, we have -- although that we try to trend down a lot of the CapEx, in recent years, as I mentioned, that discipline management is a key philosophy in our CapEx policy. But in the early stage that we still have some CapEx. So you will see -- as you see in our cash flow statements, you will see that the depreciation and also the amortization, these 2 portions is a bit much higher than the net increase of the PPE. So is that clear? Or do you want me to clarify any others?

Q: Yes, if you can share like of the total increase in nonmobile CapEx, how much is from IDC?

A: Actually, we didn't separately disclose the exact number of the CapEx budget for each nonmobile items. But I can share with you that I think the CapEx for IDC and cloud it remain, I mean, like the second largest part of the nonmobile CapEx for 2026, okay? And then I want to add one more point for the mobile CapEx. As we know that the 5G CapEx investments, we had just passed the peak, right, but for 2026, actually, we will invest in as a stand-alone related applications like the network slicing for your reference. But the total mobile CapEx for 2026 actually still less than that of the 2025.

Q: I got it. This is helpful. It would really be helpful if going forward, you can provide greater breakup of nonmobile CapEx because it's almost like more than 3/4 of your CapEx is now nonmobile CapEx. So it would be really helpful to get more details about that in the future.

A: Okay. Thank you for your opinion.