Chunghwa Telecom Co., Ltd. Q1 FY2026 earnings call

• 2025 cash dividend per share is NT dollars 5.2 with a payout ratio of 104.2%.
• In Q1 2026, revenue hit a record high for any first quarter since 2012, mainly driven by outstanding ICT revenue growth.
• Continue to gradually construct 5G standalone network, extending SA deployment to high-traffic areas.
• Utilize agentic AI to enhance operational workload and upgrade service offering, and have self-developed CHP AI factory platform.
• Retained MSCI ESG rating of AAA in 2026,提前提交可持续相关财务信息, ranked in the top 5% of the S&P Global Sustainability Yearbook for the fourth consecutive year, and maintained position in Dow Jones indices.
• Consumer business group had a 6.2% year-over-year revenue increase and a 5.3% year-over-year income before tax increase.
• Enterprise Business Group revenue rose 8.5% year-over-year but income before tax dropped 2.7%.
• International business group revenue and income before tax grew 10.7% and 1.6% respectively.

Mobile market: In the first quarter of 2026, Zhonghua Telecom continued to lead in Taiwan's mobile market. Mobile revenue market share rose to 41.1%, a historic high, and subscriber share among peers climbed to 39.7%. Mobile service revenue grew 4.4% year-over-year. Fixed broadband: Revenue in the first quarter increased 3% year-over-year, and the average pool amount rose to NT 818 per month. Fixed broadband subscribers showed positive year-over-year growth. Million subscriber consumer services: The multiple play offering subscription exceeded one million in the first quarter, with a 15% year-over-year growth. Wi-Fi penetration among fixed broadband subscribers reached 55%. Video subscribers, including MOD and Hami Video, recorded a 6% quarter-over-quarter increase, exceeding 3 million subscribers. Consumer cybersecurity and DCB services subscribers also exceeded 1 million. Enterprise ICT business: Group ICT revenue in the first quarter increased 25% year-over-year due to the continued expansion of emerging services. Recurring ICT revenue grew by 11%. IDC, cloud, and AIoT achieved year-over-year growth of 29%, 43%, and 26% respectively. Big data service revenue grew 8%, and 5G private network services revenue surged. International subsidiaries: International subsidiary revenue increased 20% year-over-year. U.S. revenue surged 89% year-over-year driven by large-scale AI supply chain projects, and Southeast Asia revenue increased 16% year-over-year. Satellite service revenue grew 16% year-over-year, and international private list circuits (IPRC) revenue increased 6% year-over-year. The capacity of AUG East submarine cables was expanded by an additional 18 terabits per second.

• Plan to further deploy resources for capturing pre-6G and AI-related opportunities, continue to construct 5G standalone network, and extend SA deployment to high-traffic areas.
• Utilize agentic AI to enhance operational workload and service offering, and have confidence in the growth potential of AI-enabled solutions.
• Non-mobile capex for 2026 is raised due to investment in IDC constructions, undersea cables construction to enhance network resilience.

Q: How sustainable is the ICT business and what is the outlook for the rest of the 2026 and beyond? And what is the impact of AI on the IT services industry?

A: For the ICT business in 2026, we remain confident and positive about the outlook. Due to the digital transformation demand in the industry, ICT demand is quite sustainable. For the impact of AI on the IT services, the major impact is on the enterprise sectors, and we can introduce AI to enhance services and provide value for overall revenue growth.

Q: You had guided for a higher non-mobile capex for 2026 estimation. Could you please elaborate on that, and could you get an underlying estimate trend within the non-mobile CAPEX guidance.

A: For non-mobile capex in 2026, it's because of some capex increase in IDC constructions as we have AIDC construction in our pipeline, and we continue to invest in undersea cables construction to enhance network resilience. Non-mobile capex mainly includes fixed-line, satellite, IDC, AIDC, PSP, IN, with main focuses on resilience and lifecycle management, strengthening critical infrastructure defense, and expanding signaling and user capacity to meet 2026 business plan demand for AIoT and 5G traffic.