Chunghwa Telecom Co., Ltd. (NYSE:CHT) Q3 2023 Earnings Call Transcript

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So we are quite confident that our customers will stay with us and actually for the churn rate, we are the lowest among our peers and it’s as low as 0.4%. We are quite comfortable about this number, and we believe we can further improve it. And we also have a research lab with a team of 1,000 staff engineers. They actually provide excellent research support. So that’s why we can — as I just mentioned before, that’s why we can support our expansion in our ICT business because we can focus on high value-added application services. So that’s the supplementary information provided from me.

Unidentified Analyst: That is very helpful. Can I ask one more question on your overseas foray, you’re doing this in Poland. Now will this focus primarily be on ICT and enterprise services or would you also look at investing in the networks and would you be open to taking stakes in telcos outside Taiwan?

Chau-Young Lin: Okay. So basically, for now, we — as we just mentioned, we collaborate with our Polish partner in various aspects. So ICT enterprise are the main business collaboration we are talking about now, and we may collaborate in other dimensions. But for details, we will reveal as soon as it is getting clear.

Unidentified Analyst: Thank you very much.

Chau-Young Lin: Thank you.

Operator: Thank you.

Angela Tsai: Okay. Now we have three questions from the webcast. The first is will EBG revenue decline again — year-over-year decline again in the fourth quarter.

Chau-Young Lin: So for the EBG revenue basically it’s affected by the decline of the voice revenue because in the post pandemic period, the people they have — and the customer behavior has changed back to normal. So they use their voice services. And the other key reason is the onetime government grant income. So as I mentioned because last year, during the same period, we recorded $0.4 billion in revenue, also profit. So that heavily affects our revenue and our bottom line. And on top of that, also the electricity expense, because at the early this year because there is electricity, there’s a great rate raise in electricity. So that also affects our income. So these are pretty — the reasons that mainly affect the revenues and the income in the EPG segment.

But as I just mentioned before, for — in terms of the business outlook and terms of the taking we have. So basically, we are still very confident that EPG performance will perform in line with our expectations. Thank you.

Angela Tsai: And the second question is what is the 5G penetration rate?

Chau-Young Lin: So currently, for the 5G subscribers, so now it’s over 3 million subscribers and actually, the growth rate has been quite steady.

Angela Tsai: The next question is, is there a 5G penetration target for this year?

Chau-Young Lin: So actually for the 5G penetration, as I just mentioned, actually, the growth rate is quite steady and we are quite comfortable with the number. And in terms of the 5G, the migration, the uplift is over 40%. So we think the growth pattern is good, is healthy, and that’s what we are caring about and in line with our expectation.

Operator: [Operator Instructions]

Angela Tsai: Now we have another question from the webcast. The question is that what percentage of EBG revenue is from voice?

Chau-Young Lin: So for the voice revenue, it accounts for about 20% of the revenues in the EPG performance of your fixed voice, fixed line. For the fixed line revenue for the voice, it accounts for 20% in EBG.

Operator: [Operator Instructions] Okay, if there are no further questions at this point, I now turn it back — turn the call over back to the Chairman Kuo. Thank you.

A – Shui-Yi Kuo: Thank you for your participation. Goodbye.

Operator: Thank you, Chairman Kuo. 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, and goodbye.

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