CHT

Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company's first quarter 2026 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 broadcasted live over the internet. Webcast replay will be available within an hour after the conference is finished. Please visit the CHT IR website, www.cht.com.tw/ir under the IR calendar section. Now, I would like to turn it over to Miss Angela Tsai, the Vice President of Finance. Thank you. Miss Tsai, please go ahead.

Thank you. I'm Angela Tsai, vice president of finance, Chunghwa Telecom. Welcome to our first quarter 2026 earnings conference call. Joining me today are Chunghwa's President, Rong-Shy Lin, and our Chief Financial Officer, Ao-Chi Shih. During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our first quarter business results. This will be followed by a discussion of our segment performance and financial highlights. We will then open the floor for questions and answers. Please turn to slide 2 to review our disclaimers and forward-looking statement disclosures. Without further delay, I will turn the call over to our President. President Lin, please go ahead.

Thank you, Angela. Hello everyone. Welcome to our first quarter 2026 result conference call. To begin, we are pleased to announce that our 2025 cash dividend per share is set to TWD 5.2, with a payout ratio of 104.2%, reflecting both our confidence in operation performance and a commitment to shareholders. For 2026, we are glad to see strong financial performance of the first quarter with all metrics exceeding quarterly guidance. Our revenue for this first quarter hit a record high for any first quarter since 2012, mainly driven by outstanding ICT revenue growth. In addition to our strong mobile and fixed line performance, our operation income, net income, and EPS in the first quarter further elevated on a healthy upward trajectory. This represents a very positive start to the year.

Given the steady business growth in 2026, we plan to further deploy resources for the capturing pre 6G and AI-related opportunity. In the mobile front, we will continue our gradual construction of 5G standalone network. The SA deployment in our plan is a necessity to transition to 6G and will be progressively roll out in phases. Based on demand, certain select verticals such as unmanned vehicle and autonomous driving are using SA network. In addition, we are expanding SA deployment to high traffic areas to support commercial demands and events like exhibitions, sport games, and art performances. Another important development in 2026 is the utilization of agentic AI. Building on the generative AI catalyst initiatives launched internally in 2025, we further expanded the use of agentic AI to enhance operational workload and upgrade our service offering.

From a revenue perspective, we continue to monetize our AI infrastructure, delivering solid revenue growth, particularly driven by AI data center. On the technology front, we would like to highlight our self-developed CHT AI factory platform by integrating full-stack solutions, compute power, and a portfolio for AI module, models and agents. The platform not just supports the development of our own enterprise copilots through various AI agent, but also enable us to offer AI-enabled applications to enterprise customer, including smart home ecosystem and smart manufacturing in 2026. We remain confident in the growth potential of this AI-enabled solution. Finally, in the first quarter, alongside our technological leadership, we remain equally dedicated to setting new global ESG benchmarks. We retained our MSCI ESG rating of triple A in 2026, underscoring our position as the top-tier telecom with the highest scores among global peers by April.

In February, one year ahead of regulators re-requirement, we successfully became the first in Taiwan to file a group-based, sustainability-related financial information of 2025, fully compliant to IFRS Standard 1 and Standard 2, representing our transparent ESG financial disclosure. At the forefront of the industry, we ranked in the top 5% of the S&P Global Sustainability Yearbook for the fourth consecutive year, and maintain our position in the Dow Jones Best in Class award and emerging market indices. We secure our third consecutive A ranking from the CDP survey, maintaining the Taiwan leadership position. Let's move on to our first quarter 2026 result. Please turn to page 5 for our success in Taiwan's mobile market. We continued our market share leadership in Taiwan's mobile market.

According to data from our telecom regulator, our mobile revenue market share rose to 41.1%, a historic high. While our subscriber share among peers climbed to 39.7%, mainly driven by the continuing growth in the postpaid subscribers and the strong roaming performance in the quarter. Our 5G performance was equally impressive. Based on regulators' data, our 5G subscriber market share was up to 39.4%, maintaining our industry-leading position. The 5G penetration rate among our smartphone users further increased to near 48% by this March, while the average month fee uplifted from 5G migration slightly decreased to 36% due to a one-time factor.

With the combined strength of our expanding subscriber base and the growing 5G adoption, our mobile service revenue growth outpaced the industry, achieving an exciting 4.4% increase year-over-year. Postpaid ARPU are also grew by 3.6%, TWD 20 on a year-over-year basis. We expect this positive trajectory to continue, supported by Taiwan's favorable mobile market landscape. Let's move on to slide 6 for our fixed broadband business update. In the first quarter, we are glad to see the number of subscribers adopting service speed of 300 megabits per second and above reached 40% of our total fixed broadband subscriber base, which is encouraging.

As a result, our fixed broadband revenue in the first quarter caused a 3% increase year-over-year, while the ARPU obtained a year-over-year raise of NTD 20 to NTD 818 per month. Fixed broadband subscribers delivered positive growth year-over-year. Going forward, we will continue to promote high-speed services such as 500 Mbps and 1 Gbps, and above to further enhance our customer profile and gain incremental ARPU. Page 7 highlights the performance of our million subscriber consumer services. The first growth driver was our multiple play offering, which integrates mobile, fixed broadband, and Wi-Fi services. Subscription surpassed the milestone of 1 million in the first quarter, representing a 15% year-over-year growth.

Notably, our Wi-Fi penetration among fixed broadband subscriber reached 55%, reflecting our significantly enhanced in-home coverage, anchoring customer loyalty, and driving sustained ARPU expansion. The most encouraging performance was recorded in our video business. Thanks to the excitement around the 2026 World Baseball Classic. In the first quarter, total video subscribers, including MOD and Hami Video, recorded a 6% quarter-over-quarter increase, successfully exceeding 3 million subscribers. Meanwhile, Hami Video ARPU also demonstrated encouraging double-digit growth year-over-year. Looking ahead, as we are preparing for the upcoming FIFA World Cup in the second quarter and the Asian Games in the third quarter, we plan to leverage long-term subscription offering and sustain user engagement across consecutive major sports events throughout the year. Lastly, our digital service delivered 2 additional million subscriber milestone.

The subscriber number of our consumer cybersecurity services maintained above 1 million during the quarter, while the number of transaction users of our DCB services also exceeded the 1 million threshold during the same period, reflecting the sustainable growth momentum of our digital ecosystem. Slide 6 illustrates the key development in our enterprise ICT business. With the group collaboration, our group's ICT revenue in the first quarter increased 25% on year due to continued expansion of the emerging services. Recurring ICT revenue also grew by 11%, maintaining strong growth momentum across all major services line, particularly cybersecurity, IDC, and international public cloud services. Among our core ICT services pillars, IDC, cloud, and AIoT continue to be the key growth drivers, posting year-over-year growth of 29%, 43%, and 26% respectively.

IDC revenue was mainly driven by the installation projects from manufacturing company. Cloud revenue received contributions from government taxation projects, and the smart environment solutions continue to support AIoT revenue growth. In addition, on a year-over-year basis, our big data service revenue grew by 8%, and the 5G private network services revenue surged, both thanks to project revenue recognition from both domestic and international public sectors. However, revenue from cybersecurity services declined due to the high comparison base last year. We are even more proud to share that our ICT order intake in the first quarter recorded a new high with counter value amounting to TWD 20 billion, mainly representing opportunities from network resilience project and the large follow-on project on national fishery and surveillance system.

Notably, the value of the smart surveillance project obtained exceeded TWD 1 billion, underscoring our number 1 market leadership position in surveillance services. In addition, our homegrown AI traffic flow identification and analysis technologies continued to win us smart transportation projects, while our subsidiary, Next Bank also worked with us to leverage our telecom data on loan decisions. Both represent replicable solution for more future projects in specific verticals. Slide 9 highlights the robust performance of our international subsidiaries. In the first quarter, international subsidiary revenue grew 20% year-over-year, mainly driven by major ICT project delivers across the U.S. and the Southeast Asia market. Especially, U.S. revenue surged 89% year-over-year, driven by successful revenue recognition of large-scale AI supply chain projects.

While Southeast Asia revenue increased 16% year-over-year due to contribution from a phase construction project at a key customer facility in Singapore. We continue to secure large-scale project contracts in the U.S. while extending this proven expertise into Southeast Asia. Starting from this quarter, we are pleased to report our financial return from network resilience deployment. In the first quarter, our satellite service revenue increased 16% year-over-year, stemming from our satellite connectivity solution across multiple sectors, including government, multinational enterprise, high-tech, and offshore energy industry. Additionally, revenue of international private leased line lease circuit or IPLC rose 6% year-over-year, mainly driven by the recurring revenue contribution from our SDH 2 and Africa submarine cables starting from the previous quarter.

Excitingly, to meet surging connectivity demands, we expanded the capacity of APCN submarine cables by additional 18 terabits per second, spanning routes from Taiwan to Japan and Taiwan to Singapore. The expansion is expected to support medium to long-term bandwidth demands across Asia and serve as a key driver of long-term revenue growth. Now let's move on to page 10 for the financial performance of our three business groups. In the first quarter, thanks to steady revenue growth in the mobile and fixed broadband services, plus higher sales revenue driven by the strong iPhone demand. Our consumer business group delivered a robust 6.2% year-over-year revenue increase and a solid 5.3% year-over-year income before tax increase, boldly underpins the group's outperformance.

For enterprise business group, its revenue rose by 8.5% year-over-year, driven by strong ICT business and the growth in mobile and the fixed broadband services. However, his income before tax dropped by 2.7%, mainly due to fixed voice service decrease, which offsets the growth in ICT business as mentioned earlier. For international business group, both of his revenue and income before tax grew positively by 10.7% and 1.6% respectively, driven by the rising ICT service demand from the overseas AI supply chain, together with stronger roaming performance. That concludes the business overview of the first quarter. Now I would like to hand the call over to Audrey for the financial update.

Thank you, President. Good afternoon, everyone, and thank you for joining us today. I'm pleased to walk you through our financial performance for the first quarter of 2026. Please turn to slide 12. We reported consolidated revenue of TWD 59.99 billion this quarter. This represent a 7.5% year-over-year increase. It is also a record high for the first quarter. This growth was driven by three key factors. First, our ICT business delivered strong momentum. This was supported by integrated projects, IDC and cloud demand, and AIoT expansion. Second, sales revenue was very strong. This was mainly driven by handset demand at both the parent company and our subsidiaries and now. Also, our subsidiary, Chunghwa Precision Test Tech, also contributes meaningfully. Third, our core telecom business remains stable. We saw steady growth in mobile, broadband, and data service.

Income from operations increased by 4.6%. This growth was supported by the sustained profitability of our core telecom business, as well as strong earnings contribution from our subsidiaries. In addition, the recognition of a higher value integrated projects together with the continued scaling of our IDC and cloud operations further improve our operating margins and overall earnings quality. As a result, earnings per share increased from TWD 1.26 to TWD 1.3, reflecting our consistent profitability and making the highest first quarter EPS in the past 10 years. EBITDA for the quarter remained stable at TWD 23.3 billion, with a healthy EBITDA margin of 38.85%. In summary, these results reflect high quality earnings growth across our business segments. Now please turn to slide 13 as we move on to our balance sheet highlights.

Total assets increased by 2.3% year-to-date, primarily driven by a rise in current assets. This was led by an increase in time deposit and NCDs, along with seasonal increases in prepaid expenses, inventories, and accounts receivable to support our business operation. Additionally, investment properties rose following the completion of a new rental site, while the net decrease in PPE reflects depreciation charges for the period. On the liability side, total obligations increased by 1.1% compared with year-end 2025. The increase was mainly attributable to a higher bonds payable, driven by the issuance of convertible bonds by our subsidiary, Chunghwa Precision Test Tech. Aside from this, our liability structure remains stable. Our financial strength is further reflected in our key ratios. The debt ratio improved to 24.92%, while the current ratio remained healthy and well above 100%.

Most notably, our net debt to EBITDA ratio stood at zero, highlight our solid financial position. Now let's move to slide 14 for our cash flow summary, where we will review our performance for the first quarter of 2026. Net cash provided by operating activities remained healthy in the first quarter. Year-over-year changes in operating cash flow were mainly driven by working capital movements. Lower cash inflows from accounts receivable were largely offset by reduced cash outflows from accounts payable. Additionally, we saw an increase in cash outflows related to inventory movements, reflecting our efforts to support upcoming business expansions. On the investment side, CapEx total TWD 4.55 billion represent a planned year-over-year decrease of 15.9%.

Mobile CapEx declined by 24.4%, in line with our strategy to gradually reduce capital intensity as we move beyond the peak of the 5G deployment cycle. Non-mobile CapEx decreased by 12.8%, mainly reflecting a higher base in the previous year. As a result, free cash flow reached TWD 6.65 billion. Despite modest year-over-year fluctuations, our cash position remained very solid. Our recurring cash generation continues to comfortably support Both business expansion and shareholder returns. Turning to slide 15 for our performance highlights relative to guidance. In the 1st quarter of 2026, we delivered strong results with revenue exceeding our guidance. This performance was supported by continued growth in our ICT business, stable contribution from our core telecom operations, and stronger than expected sales revenue. Most importantly, revenue growth continued to outpace the increase in operating expenses, reflecting improved operating efficiency and disciplined cost management. While certain project-related costs increased alongside higher ICT revenue recognition, overall cost control remained well within expectations. As a result, all key profitability metrics, including operating income, net income, EPS, and EBITDA, came in above expectations for the quarter. This concludes our financial results highlight. Thank you for joining us today, and we will now open the call for questions.

Yes, thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question for any of today's speakers, please press star key and 1 on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. When you are speaking, please be louder or closer to the microphone. If you find that your question has been answered before it is your turn to speak, please press star key and 2 to cancel the question. You are also welcome to send questions via chat box on the webcast page. We will begin with the questions from telephone line and then move to the queries from the webpage. Thank you. Now please press star 1 on your telephone keypad if you would like to ask the question. Thank you.

To ask a question, you may press star one on your telephone keypad. Thank you. You may press star key and number one on your telephone keypad if you would like to ask the question. Thank you.

Okay, we got a question from our platform. That's, how sustainable is the ICT business? What is the outlook for the rest of the 2026 and beyond? What is the impact of AI on the IT services industry? Okay. I mean, for the ICT business for the year 2026, I think, actually, we think, we remain confident and positive for the outlook of our overall ICT business. It is because the organic growth from the ICT services and the IT, sorry, then the AI contribution and AI, you know, the value creation.

As you know, for most of the digital services we provide for the consumers or for the enterprise sectors, actually, in this year, we introduced the agentic AI, which can also help to upgrade some services, you know, to meet or cater to the enterprise's customers' requirements. I think, for this part, it also can contribute some revenue to the ICT business. In terms of the impact of AI on the IT services, I think, for this part, the major impact came for the enterprise or enterprise sectors. Just like I said, we think that we can introduce AI to enhance the services and provide value and bring in the revenues for our, you know, overall, you know, revenue growth.

If you would like to ask the question, you may press star one on your telephone keypad. Thank you.

There's a second question from HSBC. You had guided for a higher in non-mobile CapEx for 2026 estimation. Could you please elaborate on that? Could you get an underlying trend within the non-mobile CapEx guidance? For the non-mobile CapEx for 2026 estimates, that's because we have some CapEx increase in the IDC construction for IDC constructions. In 2026, we have some AIDC construction in our pipeline. We allocate some CapEx for the construction. We also continue to, just like our President reported earlier during the result call, we continue to invest in the construction of undersea cable to enhance our network resilience.

The undersea cable, you know, also continue to contribute to our, you know, total revenue for these years. That's why we raised our non-mobile CapEx for year 2026. Yeah.

Okay. I can also add on for the two previous question. The first question is about that the whole sustainable of the ICT. I think that I just want to provide some overview that because due to the digital transformation demand in the industry, we did see that the ICT demand is quite sustainable. This is for the first part for the question. The second part for the non-mobile related CapEx. Non-mobile related CapEx in fact, it basically include from fixed line, satellite, IDC, AIDC, PSP, IN. Overall, there are three focus. The main focus is on resilience and lifecycle management. We need to make sure that the core network can ensure security and resilience.

The second part is that we also, there is some necessary investment to strengthen critical infrastructure defense. Finally, we need to make sure we also expand our signaling and user capacity to meet the 2026 business plan demand for AIoT and 5G traffic. This also include in some of the, I say, functionality in the select area to future-proof the network. These are our non mobile related CapEx. Compared to last year, because last year we have a high basis, you could see the slight decrease of non-mobile CapEx in this quarter.

We are now in question and answer session. If you would like to ask the question, you may press star one on your telephone keypad. Thank you. If you would like to ask the question, you may press star one on your telephone keypad. Thank you. Thank you for all your questions. If there are no further questions, I will turn it back over to President Lin. Thank you.

Thank you very much for your participation. See you. Bye-bye.

Yes. Thank you, President Lin. Ladies and gentlemen, we thank you for your participation in Chunghwa Telecom's conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw/ir under the IR Calendar section. You may now disconnect. Thank you again. Goodbye.

Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom Fourth Quarter 2025 Operating Results. [Operator Instructions] And for your information, this conference call is now being broadcasted live over the Internet. A webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website at www.cht.com.tw/ir under the IR Calendar section. And now I would like to turn it over to Ms. Angela Tsai, Vice President of Financial Department. Thank you. Ms. Tsai, please begin.

Thank you. I'm Angela Tsai, Vice President of Finance at Chunghwa Telecom. Welcome to our fourth quarter 2025 Earnings Conference call. Joining me on the call today are Chunghwa's President Rong-Shy Lin; and our Chief Financial Officer, Audrey Hsu. During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our fourth quarter business results. This will be followed by a discussion of our segment performance and financial highlights. We will then open the floor for questions and answers. Please turn to Slide 2 to review our disclaimers and forward-looking statement disclosures. Now without further delay, I will turn the call over to our President. President Lin, please go ahead.

Thank you, Angela, and hello, everyone. Welcome to our fourth quarter 2025 results conference call. To begin, I am pleased to report our exceptional financial performance for 2025, driven by our dedicated efforts. Chunghwa Telecom's revenue, operating income, income before tax and EPS for 2025 all exceeded the upper end of our guidance, reflecting our strong execution and market-leading position. On the revenue front, our full year revenue reached an all-time high, demonstrating our continued focus on strengthening our core businesses and active expansion in the ICT sector. Notably, our full year EPS of TWD 4.99 marked an 8-year high, extending our annual growth momentum for the sixth consecutive year. This milestone underscore our commitment to driving innovation and enhancing long-term shareholders' value. Based on the strong outperformance in 2025, we are entering 2026 with confidence for our telecom businesses. We see Taiwan's mobile market remaining stable and favorable to us as the market leader. We are also pleased with our fixed broadband performance and will extend the successful existing strategy for further ARPU enhancement. In terms of ICT business, our technology capability will continue to remain cutting edge to support future growth. A particular highlight is our satellite opportunities as we believe demand of satellite services as the communication backup solution will increase with our satellites of OneWeb and SES commencing operation in 2025. The Astranis satellite will join in second half of 2026 to enhance our multilayer satellite capability. Furthermore, we will also focus on extending pre-6G-related opportunities in AIoT, satellite and big data services and expect their combined revenue to surpass the TWD 10 billion in 2026. We particularly expect to convert our AI capabilities into our service offering. We expect to assist our customers to integrate AI into their operational processes, legal compliance and infrastructure management. In addition, as a leader in AI drive connectivity, we are introducing AI edge computing into our AIDC to create a new revenue stream alongside our continued construction of AIDC in 2026. Ultimately, in the fourth quarter, we were honored with multiple awards recognizing both our ESG accomplishments and the technical acknowledgment. We won The Asset's Jade Award for corporate sustainability leadership for the fifth time, received the several AI Innovation Award at the World Communication Awards for our smart customer services solution and was recognized as the only Taiwanese telecom company on Newsweek's World's Most Trustworthy Companies 2025 list. More importantly, we have secured 4.6 billion kilowatt hour of renewable energy through a 20-year Corporate Power Purchase Agreement, CPPA, to support our 2045 net zero commitment. Now let's turn to our fourth quarter 2025 results. Please flip to Page 4 for the business overview. Please turn to Page 5 to review our success in Taiwan mobile market. In the fourth quarter, we solidified our leadership position in Taiwan's mobile market for 2025 with record highs across all dimensions. According to data from our telecom regulator, our mobile revenue market share climbed to unprecedented 41%, while our subscriber market share rose to 39.7%, mainly driven by continued growth in the postpaid subscriber. We are pleased with this strong result. Our 5G performance was equally impressive. Based on regulators' data, our 5G subscriber market share increased to 39.2%, further solidify our industry-leading position. The 5G penetration rate among our smartphone users climbed to 46.4% by the end of 2025, while the average monthly fee uplift from 5G migration remained robust at 41%. Given this solid momentum, we were especially encouraged by our strong mobile service revenue growth in the fourth quarter, which achieved a recent record high of 4.7% year-over-year. Postpaid ARPU also grew 3.6% year-over-year. We expect this positive trajectory to continue, supported by Taiwan's favorable mobile market landscape. Let's move on to Slide 6 for our fixed broadband business update. In the fourth quarter, our fixed broadband ARPU continued its upward trajectory, reaching a new high of TWD 819 per month. This represents a 3.8% increase in revenue and a 0.5% increase in subscribers year-over-year. This strong result were driven by our high-speed upgrade promotion and MOD bundle packages, which successfully boosted customer adoption of higher tier plans. Subscribers choosing speed of 300 megabits per second and above grew by 13% year-over-year, while those opting for 500 megabits per second and above recorded a double-digit growth and the subscription for 1 gigabits per second and above doubled in the fourth quarter. Slide 7 provides a detailed overview of the highlights from our consumer application services. In the fourth quarter, our multiple-play packages, which integrate mobile, fixed broadband and WiFi services increased by 17% year-over-year, marking the 16th consecutive quarter of expansion and representing the collective growth momentum of our customer business group. In 2025, despite the absence of major global sporting event broadcasting, resulting in overall subscription loss, our Hami video service demonstrated a solid resilience as its ARPU increased by more than 25% year-over-year in the fourth quarter. Looking ahead, with the launch of Disney+ bundle this January and our ongoing partnership with Netflix, coupled with the exciting pipeline of popular sporting events such as the FIFA World Cup, Asia Games and et cetera, we expect to drive further revenue growth throughout 2026. Meanwhile, our consumer cybersecurity subscription recorded 11% year-over-year growth with revenue also achieving double-digit gains, contributing to the steady growth for our consumer business group illustrated the key development in our enterprise ICT business. In the fourth quarter, our group's ICT revenue declined by 6% year-over-year due to a higher comparison base in the same period last year, though our full year ICT revenue still recorded robust year-over-year growth. Meanwhile, our recurring ICT revenue grew 15% year-over-year, continuing to show strong momentum, supported by increases across all major service lines, particularly contributions of AIoT, IDC and international public cloud services. Looking at the specific service categories, revenue from IDC, Big Data and 5G private network grew by 19%, 3% and 88% year-over-year, respectively. IDC performance benefited primarily from project completion in Mexico, while big data service revenue increased driven by its recurring revenue growth. Revenue from 5G private network surged, supported by the project revenue recognition from both public and private sector customers. However, revenue from cloud and AIDC business declined by 16% and 27% year-over-year, respectively, due to a high base last year. Our cybersecurity service revenue also decreased by 16% year-over-year as the majority of our cybersecurity revenue for 2025 had already been recognized in 3 quarters. Notably, despite the quarterly fluctuation, both cloud service and cybersecurity business still delivered full year revenue growth. We are also proud to share that we secured an AI customer service solution to build the first integrated AI customer services system for a leading financial institution in Taiwan. Furthermore, we secured a flagship government system integration project to upgrade the labor insurance platform to next-generation infrastructure with a contract value exceeding TWD 3 billion. In addition to further leverage our sea, land and sky network deployment and expand our satellite business scale, we successfully incorporated our satellite services as part of the government's joint procurement contract framework, paving the way for more long-term service contracts from government agencies. Lastly, our deployment of remote surveillance platform for correctional institution nationwide brought us 5 additional new projects in the fourth quarter with a total contract value of TWD 150 million. We expect to further replicate and scale this success in the coming year. Slide 9 illustrates the performance of our international subsidiaries. In the fourth quarter, our international subsidiaries revenue decreased 7% year-over-year, mainly due to softened demand for voice services as well as higher comparison base in the United States and the Japan ICT market last year. However, we were glad to see a 12% year-over-year revenue increase in Southeast Asia market as we completed multiple planned construction projects in Singapore and Thailand, a trend that we expect to continue through 2026. Notably, our Malaysia subsidiary commenced operations in December 2025, aiming to provide more timely, high-efficient ICT integration services for Taiwanese and multinational enterprise in the growing Southeast Asia market. Look ahead of 2026, we maintain a relatively optimistic outlook for our global market development as we have secured several AI supply chain projects in the United States in our pipeline, including key projects in Texas and California, which is expected to significantly boost our U.S. market performance in 2026. Now let's move on to Page 10 for the financial performance of our 3 business groups. In the fourth quarter, our CBG delivered a robust 6% year-over-year revenue growth, supported in both mobile and fixed broadband services, plus higher sales driven by the iPhone demand. However, its income before tax slightly decreased, mainly dragged by the final phase of 3G telecom equipment impairment, which has fully recognized in the fourth quarter and a higher comparison base from government subsidies recorded in the same period last year. Our EBG revenue decreased by 7.9% year-over-year as most of our major ICT project has already been recognized in previous quarters, resulting in a 7% year-over-year drop in the EBG ICT revenue. Income before tax was also impacted by the onetime impairment mentioned earlier. Encouragingly, EBG mobile and fixed broadband services as well as its satellite services still delivered solid growth momentum this quarter. As for our IBG business, revenue grew by 2.5% and income before tax increased by 1.8% year-over-year, driven by rising demand for the international IDC services and stronger roaming revenue. Furthermore, we are pleased to report that our submarine cables, SJC2 and the first phase of Apricot were completed this quarter and further boosted IBG's fixed line services revenue by 2.2% year-over-year. Now I would like to hand the call over to Audrey for financial updates.

Thank you, President. Good afternoon, everyone, and thank you for joining us today. I'm pleased to walk you through our financial performance for the fourth quarter and full year of 2025 and share our financial guidance for 2026. So now please turn to Slide 12 for our income statement highlights. Let's start with our fourth quarter results shown in the first 3 columns on the slide. Revenue and operations. We reported consolidated revenue of TWD 65.65 billion. This represents a steady 0.5% year-over-year increase and makes our highest fourth quarter revenue in nearly a decade. This growth was fueled by strong mobile device sales alongside the sustained momentum of our core telecom service. Income from operations decreased by 2.2%. This was primarily due to one-off impairment losses from the 3G network sunset this quarter, coupled with a high comparative base from last year's investment property valuation gains. Income before tax increased by 2.1% year-over-year. This growth was driven by investment disposal gains reflected in our nonoperating income. As a result of this performance, EPS increased from TWD 1.16 to TWD 1.20. This reflects our consistent profitability and marks the highest fourth quarter EPS in 10 years. Finally, EBITDA for the quarter remained stable at TWD 21.55 billion. The EBITDA margin stood at 32.82%. So now let's expand our view to the full year of 2025, shown in the last 3 columns. The annual view reflects a strong growth trajectory. So for the full year, total revenue reached TWD 236.11 billion, a solid increase of 2.7% compared to 2024. The growth was broad-based and driven by 3 pillars. First, we saw strong momentum in our sales revenue. This was fueled by higher mobile handset volumes and the robust performance of our subsidiary, Chunghwa Precision Test in the semiconductor testing sector. Second, our ICT portfolio continued to deliver with significant contribution from high-growth areas such as IDC, cloud and cybersecurity. Third, we maintained steady growth across our foundational mobile service and fixed broadband business. So this top line strength translated directly into profitability. Income from operations grew by 3.6% and net income rose by 4% year-over-year. Consequently, full year EPS reached TWD 4.99, up from TWD 4.8 last year. EBITDA also grew 2.6% year-over-year to a strong TWD 88.77 billion. Our EBITDA margin remained stable at 37.6%, broadly consistent with the prior year. So in summary, these results reflect high-quality earnings growth. This profit expansion was driven by sustained positive momentum in our core telecom business, complemented by the continued scaling of our IDC, cloud service and other ICT business operations. So now let's turn to Slide 13, balance sheet highlights. So total assets increased by 0.4% year-over-year. The growth reflects strategic allocation into long-term investments and prepayments for satellite infrastructure reported in other assets. The increase was partially offset by a net decrease in property, plant and equipment as depreciation charge existed new capital additions, along with a net decrease in intangible assets due to the 4G and 5G spectrum amortization. On the liability side, total obligation decreased by 0.7%. We repaid older loans while successfully issuing our first-ever sustainability bonds focused on biodiversity. The strategy not only strengthened our capital structure and reinforce our leadership in ESG-driven financing. Our financial health is best illustrated by our key ratios. Our debt ratio improved further to 25.25%. Our current ratio remained healthy, well above 100%. Most notably, our net debt-to-EBITDA ratio stood at 0. Moving to Slide 14 for our cash flow summary. We will review our performance for the full year 2025. Cash flow from operating activities decreased slightly by 2.2%. The variation was primarily driven by working capital dynamics, specifically a decrease in accounts payable between '25 and '24. On the investment front, CapEx declined by 3.7% to TWD 27.7 billion. First, regarding mobile CapEx, spending decreased by TWD 1.4 billion. The reduction aligns with our road map to lower mobile capital intensity now that we have passed the peak of the 5G deployment cycle. Second, regarding nonmobile CapEx, spending increased by 2%. The increase was mainly driven by strategic investment in submarine cables. Consequently, free cash flow stood at TWD 49.8 billion, a marginal decrease of 1.4% year-over-year. Despite this slight variation, we continue to maintain a strong cash position. Our stable cash flow inflows remain fully capable of supporting both our business growth initiatives and our commitment to shareholder returns. So now let's turn to Slide 15 to review our performance highlights against guidance. So in the fourth quarter of 2025, revenue exceeds the target, showing stronger-than-expected demand. Key performance measures such as net income and EPS were all in line with our forecast. For the full year 2025, the cumulative results validate our strategy. We are very proud to report that all major metrics, revenue, income from operations, net income, EPS and EBITDA either met or exceed our full year guidance. Again, this broad-based success was powered by our telecom business, driven by successful 5G migration and mobile service revenue growth alongside our ICT business, which capitals on expanding demand for IDC and cloud big data overseas markets. So now moving on to Slide 16. Please see our guidance for 2026. Looking ahead, total revenue for 2026 is expected to increase between 2.5% to 3.2% year-over-year, primarily driven by growth momentum in our core business. Well-received 5G service and speed upgrade promotion packages for fixed broadband are expected to continuously enhance our subscriber numbers and ARPU. ICT business is also expected to contribute to revenue growth as we continue to see digital transformation opportunities in the market. Operating costs and expenses are expected to increase between 3.5% to 3.7% year-over-year as a result of the investment in talent and infrastructure that support future business development in both core and emerging business. So given these projections, we expect our EPS to be in the range of TWD 4.82 and TWD 5.02. As for capital budgeting, we have budgeted TWD 31.91 billion for 2026. Looking ahead, our strategy remains consistent with our long-term road map, balancing disciplined efficiency with strategic expansion into resilient and sustainable infrastructure. Our mobile-related CapEx is expected to decrease by 6.3% year-over-year. This marks the fifth consecutive year of this decline since our peak in 2021. This demonstrates our ability to maintain our mobile leadership through capital efficiency as we move past the heavy 5G construction phase. Non-mobile related CapEx is expected to increase by 24%. The investment is strictly aligned with our sea, land, sky strategy to capture emerging business opportunities while fortifying our network. Key investments include expanding submarine cables to boost connectability alongside building our IDC data center. We also strengthened infrastructure resilience by upgrading power, cooling and cybersecurity systems. We are turning digital resilience into a unique competitive advantage. So this concludes our financial results highlights. Thank you for your attention. At this time, we would like to open the conference call for questions.

[Operator Instructions] Now the first one want to ask questions, correct me if I pronounce wrongly, okay? Rajesh Panjwani from JP Morgan.

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?

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?

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

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.

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.

Okay. Thank you for your opinion.

[Operator Instructions] There seems to be no further questions at this moment. I will turn it over to President Lin. Please go ahead, Lin.

Okay. Thank you very much for your participation. Happy New Year.

Yes. Thank you, President Lin. And ladies and gentlemen, we thank you for your participation in Chunghwa Telecom's conference. There will be a webcast replay within an hour. Please visit CHT IR website at www.tw/ir under the IR Calendar section. You may now disconnect. Thank you again, and goodbye.