CHT(CHT) - 2019 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues decreased by 4.3% year-over-year, with operating costs and expenses also decreasing by 4.0% [12] - Income from operations decreased by 5.0%, while net income decreased by 4.3% [12] - EBITDA margin increased to 37.3% from 35.3% in the same period of 2018, primarily due to the adoption of IFRS 16 [12] Business Line Data and Key Metrics Changes - Mobile service revenue decreased due to market competition and Voice Over IP substitution, despite maintaining a leading market position [5][12] - Broadband subscribers migrated to higher speed services, with users signing up for plans of 100 Mbps or higher growing by 10.5% year-over-year [8] - IPTV MOD platform subscribers reached over 2 million, a 20.2% increase year-over-year, with IPTV revenue growing by 15.7% [9][10] - ICT revenue increased year-over-year, with IDC revenue growing by 69%, IoT revenue by 68%, and information security revenue by 23.5% [10] Market Data and Key Metrics Changes - The overall market remained competitive, with peers rolling out low-price mobile data plans [5] - The company maintained its leading market position in mobile revenue and subscriber shares, with a slight increase in revenue share [5] Company Strategy and Development Direction - The company is focusing on a customer-centric transformation plan to enhance business growth, including strengthening core business areas and deploying emerging services [7] - Plans to invest in core business areas such as FTTx, 4G, IDC, and service platforms with a CapEx budget of T$29 billion for 2019 [14] Management Comments on Operating Environment and Future Outlook - Management noted the competitive landscape and the need to balance customer acquisition with retaining high-contribution customers [5][19] - Anticipated regulatory changes may increase competition and alter the market landscape, particularly with the upcoming 5G spectrum auction [15] Other Important Information - The company is preparing for a digital financial services initiative in collaboration with strategic partners, expecting long-term positive returns from investments [24] - The MOD subscriber target for 2019 is set at 2.2 million, with expectations of continued strong performance [26] Q&A Session Summary Question: Mobile performance and IPTV margins - Management indicated that mobile revenue impact is less severe due to a cautious approach to customer contributions, aiming to retain high-value customers [17][19] - IPTV is expected to reach breakeven in the coming years, with ongoing monitoring of market conditions [17] Question: Telecommunications Draft Act and market dominance - Management acknowledged that the regulatory changes aim to increase competition and provide flexibility for smaller operators [21] Question: Next commercial venture and MOD subscriber targets - The company is investing in a consortium for digital financial services and expects to be the largest shareholder [24] - The target for MOD subscribers in 2019 is 2.2 million, with confidence in achieving this goal [26]