CHT(US:CHT)2020-08-01 15:39Financial Data and Key Metrics Changes - Total revenues decreased by 4.6% year-over-year in Q2 2020, while operating costs decreased by 6.6% [16] - Income from operations increased by 3%, and net income remained the same year-over-year [16] - EBITDA margin increased to 40.5% from 38.1% in the same period of 2019 [16] Business Line Data and Key Metrics Changes - Mobile service revenue experienced a small decrease quarter-over-quarter, primarily due to efforts to guide subscribers to adopt higher-priced plans [9] - Broadband migration to 300 megabits per second increased more than 30% year-over-year, with at Home WiFi subscriptions increasing 120% year-over-year [6][7] - IPTV and multi-platform services maintained over 2.08 million subscribers, with MOD revenue increasing 2.1% year-over-year [12] - ICT project revenue increased by 3.8% year-over-year, driven by large project revenue recognition [13] Market Data and Key Metrics Changes - The company saw growth in fixed broadband, cloud, and ICT services due to increased demand from remote work and study [8] - Digital channel assets and transactions increased by 92% year-over-year [8] - International mobile enrollment revenue continued to be affected by ongoing lockdowns [8] Company Strategy and Development Direction - The company launched its 5G service on June 30, 2020, aiming to innovate and provide services beyond standard offerings [6] - Plans to acquire more than one million 5G subscribers over the next year, leveraging its large enterprise customer base [9][10] - Focus on enhancing ICT training revenue contribution to stabilize overall performance [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of COVID-19 on overall business but noted resilience in core business areas [8] - The company expects the mobile competition to remain stable, with no significant changes observed in the quarter [23] - Management remains optimistic about the potential for ARPU uplift as 5G adoption increases [26] Other Important Information - Cash flow from operating activities decreased by TWD 2.78 billion or 17.5% compared to the same period of 2019 [17] - The company plans to budget TWD 30.7 billion for CapEx in 2020, focusing on 5G-related expenditures [18] Q&A Session Summary Question: Cost outlook related to 5G launch - Management indicated that marketing expenses will increase as 5G services are promoted, but they will also look to offset costs [20][21] Question: Update on mobile competition - Management noted that competition remains stable, with no significant changes in pricing observed [23] Question: ARPU increase for 5G plans - Management confirmed that they are seeing an uplift in ARPU for customers adopting 5G plans [25] Question: CapEx outlook for 2021 - Management indicated that CapEx will likely increase due to the expansion of base stations, but specific figures were not disclosed [28][30] Question: Initial adoption rate of 5G plans - Management did not disclose specific numbers regarding the initial adoption rate of 5G subscribers [31] Question: Reason for net profit exceeding expectations - Management attributed the higher-than-expected net profit to a decrease in low-margin revenue, which helped improve margins [34][36] Question: Comparison of payments between new 5G subscribers and original payments - Management confirmed that they see an uplift in payments from new 5G subscribers compared to their previous 4G plans [42] Question: Impact of competition on MOD business - Management acknowledged that the MOD subscriber base has remained stable, but competition from OTT services has had some impact [43]