Investors

To Shareholders

 

Letter to Shareholders

 

Dear Shareholders,

 

In 2017, Chunghwa Telecom continued to solidify the fundamentals of each business line to improve our foundation for future business growth while actively exploring emerging business opportunities despite price pressure from peers in both the broadband and mobile markets, which increased industry competition. On the mobile side, we now own the largest 4G bandwidth as well as continuous blocks after the 4G spectrum auction in November 2017. Leveraging 180 MHz, the largest bandwidth for a single operator in Taiwan, we can offer high-speed mobile broadband service with Multi-CA (Carrier Aggregation) technology. Besides, to prepare for new opportunities in the era of Internet of Things (IoT), we actively collaborated with strategic partners to cultivate innovative IoT-related applications and services on our IoT Smart Platform. Together with our competitive edge in cloud resources, we are confident in forming the leading IoT ecosystem in Taiwan. Furthermore, we also made efforts to capitalize on the digital convergence trend by strengthening our MOD (Multimedia on Demand) service. The broadcasting of the 29th Summer Universiade in 4K quality was well-received, and the innovation of carrying over-the-top (OTT) service on our MOD platform was another milestone of realizing digital convergence.

 

The continuing growth of subscribers in our different business lines is a testament to the quality of our service. By the end of 2017, the total number of mobile internet subscribers reached 8.3 million while the total number of 4G subscribers exceeded 8.0 million. Broadband users reached 4.5 million, 1.3 million of whom signed up for a connection speed of 100Mbps or higher. We are also excited about the significant breakthrough of MOD subscriptions, which exceeded 1.6 million in 2017 due to our continued efforts in enriching content and strengthening mechanics.

 

We continued to optimize our network infrastructure, aiming to navigate the digital economy with our cutting-edge technology. In anticipation of strong demand from international content providers and the financial industry, our world-class cloud data center in Banqiao, New Taipei City, has been fully occupied and started second phase of installation in 2017. Moreover, Chunghwa Telecom established its 5G trial network and introduced a Pre-5G core network to pave the way for 5G commercialization. We aim to combine this infrastructure with our IoT Smart Platform, AI capabilities, and big data analyses to establish a leading position in the emerging digital businesses.

 

 

Financial Results

 

Chunghwa Telecom’s consolidated revenue for the full year of 2017 was NT$227.51 billion, representing a decrease of 1.1% as compared to the prior year, mainly due to the decrease of voice revenue that resulted from VoIP substitution and market competition. However, mobile value-added services experienced healthy growth in 2017 driven by mobile internet subscriber expansion and continuous 4G mobile broadband development. Furthermore, the increase in handset sales and the healthy growth of ICT solutions sales to enterprise customers also accounted for a significant portion of our total revenue.

 

Consolidated costs and expenses for the full year of 2017 was NT$180.71 billion, representing a decrease of 0.4% as compared to the prior year, mainly due to the decreases in interconnection and depreciation expenses offset the increase of ICT project costs and cost of goods sold. CAPEX spending for 2017 was mainly used for construction to support business growth and consolidate our market position, including expanding fiber coverage and enhancing carrier aggregation to boost mobile broadband speeds. Moreover, we optimized our investment review process and effectively negotiated with vendors during procurement. As a result of the successful execution of our business strategies and effective cost control initiatives, CAPEX spending was NT$26.9 billion, and net income attributable to stockholders of the parent company was NT$38.87 billion, or NT$5.01 per share.

 

In 2017, our overall net reinvestment income was NT$1.7 billion. We are pleased with the successful listing of Chief Telecom Co., Ltd., our strategic investment company focused on Internet Data Center (IDC) solutions, on the Taipei Exchange Emerging Stock Board in June 2017. It is scheduled to be listed and publicly traded on the Taipei Exchange Mainboard in 2018, and it will continue to consolidate its leading brand in the Type II industry. In addition, our subsidiary CHT Security Co., Ltd, established at the end of 2017, started operations in January 2018 to provide industry-leading total information security solutions at home and abroad. We also upgraded our branch office in Thailand to a subsidiary company in March 2017 to further enhance our local presence, southbound business development and investment capacity. Going forward, we will continue to prudentially develop our strategic overseas investments to consolidate core businesses as well as to accelerating the development of an innovative digital business, especially in the ASEAN market.

 

 

Enhance mobile broadband quality to ensure a leading market position

 

At the end of 2017, we continued to enjoy a leading position in the mobile market with an encouraging 36.5% subscriber market share and a 37.2% revenue market share. However, given the increasingly saturated 4G market and price promotions from competitors, we experienced a small subscriber loss due to price competitions. We therefore further solidified our subscriber base to ensure revenue through different channels. One was to re-allocate subsidy resources to guide mobile subscribers toward higher-end plans to drive up our product margin. Moreover, to respond to market competition, we rolled out multi-dimensional price promotion plans in our internet stores to cater to price sensitive customers as well as to create a more complete price structure.

 

In 2017, we invested in infrastructure construction to further enhance our mobile broadband quality. By the end of the year, we had the leading number of base stations in Taiwan, and became the first operator in Taiwan to reach 100% nationwide 4G coverage. We also took the lead in introducing U900 technology and now provide the largest degree of voice coverage in Taiwan. Moreover, we acquired the most bandwidth in the spectrum auction in November, and thus we are currently the only operator with three consecutive 20 MHz spectrums on the 1800 MHZ, 2100 MHz and 2600 MHz spectrums. Coupled with our leading 4CA  and 5CC (Component Carrier) exclusive services, our customers are now able to enjoy high speed mobile broadband services in crowded business districts and areas along the High Speed Railway.

 

We consistently promoted “Hami VAS Bundles” to offer high quality services including music, TV, movies, games, and OTT at reasonable prices. We further enhanced Hami Wallet, our mobile payment service, by collaborating with the convenient store chain and e-ticket service providers to offer mobile payment services. In 2017, overall mobile value-added service revenue increased 4.2% year over year. Revenue from micro-payments increased 18.4% as well due to the development of the mobile payment business.

 

 

Acquire digital convergence opportunities with network advantages

 

We successfully narrowed the subscriber loss year by year even though broadband market is even increasingly competitive. In 2017, cable operators aggressively rolled out broadband and TV bundled plans to grab market share, and even the ever lower plans in certain competitive areas. We further addressed our higher speed fiber broadband services to make differentiation, which is effective. We are encouraged to see the overall broadband subscriber loss has been mitigated, and the number of our users signing up for connection speeds of 100Mbps or higher grew 9.5% year over year to the total amount of 1.3 million.

 

Moreover, we further addressed our product advantages, such as the nationwide CHT Wi-Fi hotspots and the value-added offerings of Home Wi-Fi, cyber security and MOD service, to surpass competitors by holding an impressive lead. In 2017, we bundled broadband and MOD services to meet customers’ demand of home amusement and connections. We also highly emphasized the improvement of MOD business by facilitating the overall TV operational environment and created single channel subscription mechanism to encourage user-centric viewing. Our content, including international sport games, popular channels and dramas, continued to be in customers’ favor. We are pleased that SVOD (Subscription Video on Demand) subscription successfully exceeded 1 million, and Movie 199 package become the flagship product in Pay-TV industry due to its largest subscription base. Our all-out efforts led in a brilliant return of a 20.3% year-over-year growth of subscription and a 8.3% accumulated growth of annual revenue.

 

 

Sustain a digital economy with ICT capabilities

 

Rapidly advancing technologies have pushed telecom operators all over the world to face the inevitable impact of new technology and business models. At Chunghwa Telecom, we proactively capture opportunities that arise from market challenges. This year, as we positioned ourselves to be the engine of the digital economy, we focused on driving growth in our ICT business and establishing our broadband network as the backbone of the development of the domestic digital economy.

 

We proactively developed ICT solutions based on our existing foundational advantages in IDC, undersea cables, CDN (Content Delivery Network), and abundant research ability in AI and big data analysis. In 2017, revenue from information security, IDC, IoT, cloud computing, smart security, smart buildings, and smart green energy all continued growing. IDC and IoT business, the two significant driving forces, brought about 18.0% and 23.3% annual growth in revenue respectively. As of the end of 2017, consolidated ICT service revenue accounted for 10% of our total revenue.

 

To accelerate IoT development, we actively teamed up with partners to build a complete IoT ecosystem in Taiwan. In 2017, content providers and IoT developers were able to develop and transmit their applications on our IoT Smart Platform, which featured capabilities including communications connectivity, AI, big data analysis, and information security. Moreover, our information security service, which includes an anti-hacker service and mobile information security service, grew as well, with revenues increasing 6.7% year over year in 2017. Our DDoS (Distributed Denial of Service) service revenue grew significantly at 177% year over year due to the increasing demand from corporations eager to resist cyber-attack threats. In 2017, we successfully assisted financial institutions that suffered from serious hacker attacks to enhance financial security by establishing information security protection frameworks capable of conducting activities including financial security assessments, information security health assessments, SOC (Security Operation Center) monitoring and management, and digital forensics. Given vigorous demand and our superior products, we founded a subsidiary in late 2017 to further boost the business by serving clients on a network neutral basis.

 

Going forward, we will consistently pursue the standardization of our products to enhance ICT project margins and drive long-term ICT growth.

 

 

R&D and Achievements

 

In 2017, Chunghwa Telecom’s research and development efforts covered the seven areas of Intelligent Broadband Networking, Intelligent Business, Cloud Computing, Information Security Applications, Big Data, Internet of Things, and Convergence Services. Key developments include:

1)     Intelligent Broadband networking:the world's premiere posed LTE WLAN Aggregation solution, the first domestic posed NB-IoT end-to-end application experiment network, Software Defined Network solution, Telecom Cloud Test-bed;

2)    Intelligent Business:Fixed-Line Order and Billing Management System with New Generation Architecture, Mobile Order and Billing Management System, Business Customer Relationship Management System, e-Shop Customer Self-Services Website, Call Center Application System, Customer Self-Services App;

3)     Cloud Computing:Software-defined Data Center Solution, ICT Integrated Management solution;

4)     Information Security Application:Digital Identity Solution, Enterprise Security Solution;

5)     Big Data:Big data customer journey processing, analysis and application solution;

6)     Internet of Things:IoT Service Platform, Smart City Solution, Intelligent Manufacturing Solution, Health Cloud Service, Travel Time Prediction Service, Distributed Image Recognition System;

7)     Convergence Services:Unified MOD Service Platform, Mobile Payment Techniques and Hami wallet, AI Technologies and Application Platform, Value-added Communication Services, Convergent Messaging and Content Services; and

8)     Layout of core competencies:In 2017, we applied for 174 patents and obtained 188. In addition, we won 32 important awards.

 

 

High Standards of Corporate Social Responsibility

 

Chunghwa Telecom is fully committed to corporate social responsibility (CSR). We continue to utilize our information and communication technologies to create a positive influence by helping Taiwanese businesses realize sustainable operations. We devote ourselves to supporting the minority in remote areas and promoting long-term CSR programs such as “Read with You - Community Network Tutoring” and “EYE Social Innovative Call Center.”

 

We also make our best effort to safeguard Taiwan. Whenever heavy rainfall strikes and causes damage, we immediately send people and resources into disaster areas for emergency repair. We further offered monthly fee discounts for affected subscribers.

 

“Always Ahead” is not only our brand spirit but also the mission and vision that leads our corporate social responsibility initiatives. In 2017, Chunghwa Telecom was the first telecom operator in Taiwan to produce a Corporate Social Responsibility Report in accordance with Global Reporting Initiative Standards. Moreover, our 8th Board Meeting approved the “Corporate Social Responsibility Best-Practice Principles for Chunghwa Telecom Co., Ltd.” to establish a set of fundamental guidelines that bridges our operating activities and CSR initiatives to achieve sustainability. Meanwhile, as more and more organizations advocate a low carbon economy, we joined the CDP (Carbon Disclosure Project) with our supply chain, committing to a future with lower carbon emission.

 

Chunghwa Telecom’s CSR initiatives reveal our past ten years of progressive energy. We will continue to leverage our professional knowledge and forward-looking spirit to fulfill the vision of being the most valuable and trusted information and communication company in Taiwan.

 

 

Awards

 

Chunghwa Telecom has been a well-known household brand due to our nationwide infrastructure and service centers. In order to fulfill our brand commitment, “Always Ahead,” we have always acted in accordance with the highest corporate governance standards. Our focus on customer needs and satisfaction has generated additional value for shareholders. Our efforts have been recognized and endorsed by many international and domestic awards.

 

In 2017, Chunghwa Telecom was the only winner in Taiwan’s telecom industry to receive the “Brand of the Year” award from the World Brand forum, an honor we won for the third consecutive year. In the “Global 500 2017” from the globally renowned brand valuation consultant, Brand Finance, Chunghwa Telecom, one of the few Taiwanese companies that entered the ranking, placed 475th among the world’s top 500 brands. Chunghwa Telecom was also included in the DJSI Emerging Markets Index for the sixth consecutive year, reflecting the fact that our sustainability has been recognized by international investors. In addition, we received the “Trusted Brands” Platinum Award in the telecom category from Reader's Digest for the 13th year in a row as well as 1st place in Business Today’s Best Brand Award for the telecommunications sector, which demonstrate customers' trust in our innovative and compassionate services. Business Weekly also awarded us 1st place for “Taiwan Top 100 Brand” in the telecommunications category and 3rd place for “Original Brand” in 2017. Furthermore, we received the Platinum Corporate Award for five consecutive years from The Asset magazine, which reflects our achievements in earnings, management, governance, social and environmental responsibility, and investor relations.

 

These are the highlights from a long list of awards that recognize our efforts in business development, customer service, and social responsibility. We are encouraged by these endorsements of our achievements and will continue to perform and deliver for all of our stakeholders.

 

 

Future Outlook

 

Network quality is our strongest advantage and the foundation of our business. Going forward, the overall enhancement and maintenance of our mobile broadband network, fiber network, and undersea cables is one of our priorities. Coupled with our deployment of Next Generation Network technology, we are confident that we can provide high-quality, diversified cross-platform digital convergence services in addition to existing quality mobile broadband and fixed-line broadband services, value-added products, and ICT solutions. Our proactive marketing strategy will focus on designing competitive promotion plans and integrating service centers and internet stores to optimize the customer experience, which we believe will ultimately improve contribution per user and overall profit.

 

Speaking of leading an innovative digital economy, we aim to transform our services and internal management with a customer-centered mindset. In our core business, we will focus on channel restructuring and enterprise customer development to enhance user experience. In our video services, we will continue to integrate MOD and Hami Video/OTT services, acquire popular content and promote multi-screen applications. We aim to position ourselves as the smart home hub in customers’ living spaces while offering high-standard entertainment services. This is how we differentiate our services and provide value to customers.

 

Envisioning digital business opportunities, Chunghwa Telecom consistently invests in R&D and talent acquisition, especially in emerging fields like IoT, big data, Fintech, AR (Augmented Reality), and AI. Our outstanding platforms are key fundamentals that we can leverage to team up with partners to build an ecosystem for developing innovative ICT services. We will also leverage opportunities from the national “Asia Silicon Valley Project” and Taiwan’s southbound policy to extend services and acquire enterprise customers in overseas markets. We are dedicated to implementing strategies to lead the digital economy and innovations in industry, and remain committed to delivering additional value to our shareholders, customers, employees, and society at large.

                                                                                              

 

  Yu Cheng       Chi-Mao Sheih

                                                     Chairman and CEO                         President

                                                                                                                     April 27, 2018

Letter to Shareholders

 

Dear Shareholders,

 

In 2017, Chunghwa Telecom continued to solidify the fundamentals of each business line to improve our foundation for future business growth while actively exploring emerging business opportunities despite price pressure from peers in both the broadband and mobile markets, which increased industry competition. On the mobile side, we now own the largest 4G bandwidth as well as continuous blocks after the 4G spectrum auction in November 2017. Leveraging 180 MHz, the largest bandwidth for a single operator in Taiwan, we can offer high-speed mobile broadband service with Multi-CA (Carrier Aggregation) technology. Besides, to prepare for new opportunities in the era of Internet of Things (IoT), we actively collaborated with strategic partners to cultivate innovative IoT-related applications and services on our IoT Smart Platform. Together with our competitive edge in cloud resources, we are confident in forming the leading IoT ecosystem in Taiwan. Furthermore, we also made efforts to capitalize on the digital convergence trend by strengthening our MOD (Multimedia on Demand) service. The broadcasting of the 29th Summer Universiade in 4K quality was well-received, and the innovation of carrying over-the-top (OTT) service on our MOD platform was another milestone of realizing digital convergence.

 

The continuing growth of subscribers in our different business lines is a testament to the quality of our service. By the end of 2017, the total number of mobile internet subscribers reached 8.3 million while the total number of 4G subscribers exceeded 8.0 million. Broadband users reached 4.5 million, 1.3 million of whom signed up for a connection speed of 100Mbps or higher. We are also excited about the significant breakthrough of MOD subscriptions, which exceeded 1.6 million in 2017 due to our continued efforts in enriching content and strengthening mechanics.

 

We continued to optimize our network infrastructure, aiming to navigate the digital economy with our cutting-edge technology. In anticipation of strong demand from international content providers and the financial industry, our world-class cloud data center in Banqiao, New Taipei City, has been fully occupied and started second phase of installation in 2017. Moreover, Chunghwa Telecom established its 5G trial network and introduced a Pre-5G core network to pave the way for 5G commercialization. We aim to combine this infrastructure with our IoT Smart Platform, AI capabilities, and big data analyses to establish a leading position in the emerging digital businesses.

 

 

Financial Results

 

Chunghwa Telecom’s consolidated revenue for the full year of 2017 was NT$227.51 billion, representing a decrease of 1.1% as compared to the prior year, mainly due to the decrease of voice revenue that resulted from VoIP substitution and market competition. However, mobile value-added services experienced healthy growth in 2017 driven by mobile internet subscriber expansion and continuous 4G mobile broadband development. Furthermore, the increase in handset sales and the healthy growth of ICT solutions sales to enterprise customers also accounted for a significant portion of our total revenue.

 

Consolidated costs and expenses for the full year of 2017 was NT$180.71 billion, representing a decrease of 0.4% as compared to the prior year, mainly due to the decreases in interconnection and depreciation expenses offset the increase of ICT project costs and cost of goods sold. CAPEX spending for 2017 was mainly used for construction to support business growth and consolidate our market position, including expanding fiber coverage and enhancing carrier aggregation to boost mobile broadband speeds. Moreover, we optimized our investment review process and effectively negotiated with vendors during procurement. As a result of the successful execution of our business strategies and effective cost control initiatives, CAPEX spending was NT$26.9 billion, and net income attributable to stockholders of the parent company was NT$38.87 billion, or NT$5.01 per share.

 

In 2017, our overall net reinvestment income was NT$1.7 billion. We are pleased with the successful listing of Chief Telecom Co., Ltd., our strategic investment company focused on Internet Data Center (IDC) solutions, on the Taipei Exchange Emerging Stock Board in June 2017. It is scheduled to be listed and publicly traded on the Taipei Exchange Mainboard in 2018, and it will continue to consolidate its leading brand in the Type II industry. In addition, our subsidiary CHT Security Co., Ltd, established at the end of 2017, started operations in January 2018 to provide industry-leading total information security solutions at home and abroad. We also upgraded our branch office in Thailand to a subsidiary company in March 2017 to further enhance our local presence, southbound business development and investment capacity. Going forward, we will continue to prudentially develop our strategic overseas investments to consolidate core businesses as well as to accelerating the development of an innovative digital business, especially in the ASEAN market.

 

 

Enhance mobile broadband quality to ensure a leading market position

 

At the end of 2017, we continued to enjoy a leading position in the mobile market with an encouraging 36.5% subscriber market share and a 37.2% revenue market share. However, given the increasingly saturated 4G market and price promotions from competitors, we experienced a small subscriber loss due to price competitions. We therefore further solidified our subscriber base to ensure revenue through different channels. One was to re-allocate subsidy resources to guide mobile subscribers toward higher-end plans to drive up our product margin. Moreover, to respond to market competition, we rolled out multi-dimensional price promotion plans in our internet stores to cater to price sensitive customers as well as to create a more complete price structure.

 

In 2017, we invested in infrastructure construction to further enhance our mobile broadband quality. By the end of the year, we had the leading number of base stations in Taiwan, and became the first operator in Taiwan to reach 100% nationwide 4G coverage. We also took the lead in introducing U900 technology and now provide the largest degree of voice coverage in Taiwan. Moreover, we acquired the most bandwidth in the spectrum auction in November, and thus we are currently the only operator with three consecutive 20 MHz spectrums on the 1800 MHZ, 2100 MHz and 2600 MHz spectrums. Coupled with our leading 4CA  and 5CC (Component Carrier) exclusive services, our customers are now able to enjoy high speed mobile broadband services in crowded business districts and areas along the High Speed Railway.

 

We consistently promoted “Hami VAS Bundles” to offer high quality services including music, TV, movies, games, and OTT at reasonable prices. We further enhanced Hami Wallet, our mobile payment service, by collaborating with the convenient store chain and e-ticket service providers to offer mobile payment services. In 2017, overall mobile value-added service revenue increased 4.2% year over year. Revenue from micro-payments increased 18.4% as well due to the development of the mobile payment business.

 

 

Acquire digital convergence opportunities with network advantages

 

We successfully narrowed the subscriber loss year by year even though broadband market is even increasingly competitive. In 2017, cable operators aggressively rolled out broadband and TV bundled plans to grab market share, and even the ever lower plans in certain competitive areas. We further addressed our higher speed fiber broadband services to make differentiation, which is effective. We are encouraged to see the overall broadband subscriber loss has been mitigated, and the number of our users signing up for connection speeds of 100Mbps or higher grew 9.5% year over year to the total amount of 1.3 million.

 

Moreover, we further addressed our product advantages, such as the nationwide CHT Wi-Fi hotspots and the value-added offerings of Home Wi-Fi, cyber security and MOD service, to surpass competitors by holding an impressive lead. In 2017, we bundled broadband and MOD services to meet customers’ demand of home amusement and connections. We also highly emphasized the improvement of MOD business by facilitating the overall TV operational environment and created single channel subscription mechanism to encourage user-centric viewing. Our content, including international sport games, popular channels and dramas, continued to be in customers’ favor. We are pleased that SVOD (Subscription Video on Demand) subscription successfully exceeded 1 million, and Movie 199 package become the flagship product in Pay-TV industry due to its largest subscription base. Our all-out efforts led in a brilliant return of a 20.3% year-over-year growth of subscription and a 8.3% accumulated growth of annual revenue.

 

 

Sustain a digital economy with ICT capabilities

 

Rapidly advancing technologies have pushed telecom operators all over the world to face the inevitable impact of new technology and business models. At Chunghwa Telecom, we proactively capture opportunities that arise from market challenges. This year, as we positioned ourselves to be the engine of the digital economy, we focused on driving growth in our ICT business and establishing our broadband network as the backbone of the development of the domestic digital economy.

 

We proactively developed ICT solutions based on our existing foundational advantages in IDC, undersea cables, CDN (Content Delivery Network), and abundant research ability in AI and big data analysis. In 2017, revenue from information security, IDC, IoT, cloud computing, smart security, smart buildings, and smart green energy all continued growing. IDC and IoT business, the two significant driving forces, brought about 18.0% and 23.3% annual growth in revenue respectively. As of the end of 2017, consolidated ICT service revenue accounted for 10% of our total revenue.

 

To accelerate IoT development, we actively teamed up with partners to build a complete IoT ecosystem in Taiwan. In 2017, content providers and IoT developers were able to develop and transmit their applications on our IoT Smart Platform, which featured capabilities including communications connectivity, AI, big data analysis, and information security. Moreover, our information security service, which includes an anti-hacker service and mobile information security service, grew as well, with revenues increasing 6.7% year over year in 2017. Our DDoS (Distributed Denial of Service) service revenue grew significantly at 177% year over year due to the increasing demand from corporations eager to resist cyber-attack threats. In 2017, we successfully assisted financial institutions that suffered from serious hacker attacks to enhance financial security by establishing information security protection frameworks capable of conducting activities including financial security assessments, information security health assessments, SOC (Security Operation Center) monitoring and management, and digital forensics. Given vigorous demand and our superior products, we founded a subsidiary in late 2017 to further boost the business by serving clients on a network neutral basis.

 

Going forward, we will consistently pursue the standardization of our products to enhance ICT project margins and drive long-term ICT growth.

 

 

R&D and Achievements

 

In 2017, Chunghwa Telecom’s research and development efforts covered the seven areas of Intelligent Broadband Networking, Intelligent Business, Cloud Computing, Information Security Applications, Big Data, Internet of Things, and Convergence Services. Key developments include:

1)     Intelligent Broadband networking:the world's premiere posed LTE WLAN Aggregation solution, the first domestic posed NB-IoT end-to-end application experiment network, Software Defined Network solution, Telecom Cloud Test-bed;

2)    Intelligent Business:Fixed-Line Order and Billing Management System with New Generation Architecture, Mobile Order and Billing Management System, Business Customer Relationship Management System, e-Shop Customer Self-Services Website, Call Center Application System, Customer Self-Services App;

3)     Cloud Computing:Software-defined Data Center Solution, ICT Integrated Management solution;

4)     Information Security Application:Digital Identity Solution, Enterprise Security Solution;

5)     Big Data:Big data customer journey processing, analysis and application solution;

6)     Internet of Things:IoT Service Platform, Smart City Solution, Intelligent Manufacturing Solution, Health Cloud Service, Travel Time Prediction Service, Distributed Image Recognition System;

7)     Convergence Services:Unified MOD Service Platform, Mobile Payment Techniques and Hami wallet, AI Technologies and Application Platform, Value-added Communication Services, Convergent Messaging and Content Services; and

8)     Layout of core competencies:In 2017, we applied for 174 patents and obtained 188. In addition, we won 32 important awards.

 

 

High Standards of Corporate Social Responsibility

 

Chunghwa Telecom is fully committed to corporate social responsibility (CSR). We continue to utilize our information and communication technologies to create a positive influence by helping Taiwanese businesses realize sustainable operations. We devote ourselves to supporting the minority in remote areas and promoting long-term CSR programs such as “Read with You - Community Network Tutoring” and “EYE Social Innovative Call Center.”

 

We also make our best effort to safeguard Taiwan. Whenever heavy rainfall strikes and causes damage, we immediately send people and resources into disaster areas for emergency repair. We further offered monthly fee discounts for affected subscribers.

 

“Always Ahead” is not only our brand spirit but also the mission and vision that leads our corporate social responsibility initiatives. In 2017, Chunghwa Telecom was the first telecom operator in Taiwan to produce a Corporate Social Responsibility Report in accordance with Global Reporting Initiative Standards. Moreover, our 8th Board Meeting approved the “Corporate Social Responsibility Best-Practice Principles for Chunghwa Telecom Co., Ltd.” to establish a set of fundamental guidelines that bridges our operating activities and CSR initiatives to achieve sustainability. Meanwhile, as more and more organizations advocate a low carbon economy, we joined the CDP (Carbon Disclosure Project) with our supply chain, committing to a future with lower carbon emission.

 

Chunghwa Telecom’s CSR initiatives reveal our past ten years of progressive energy. We will continue to leverage our professional knowledge and forward-looking spirit to fulfill the vision of being the most valuable and trusted information and communication company in Taiwan.

 

 

Awards

 

Chunghwa Telecom has been a well-known household brand due to our nationwide infrastructure and service centers. In order to fulfill our brand commitment, “Always Ahead,” we have always acted in accordance with the highest corporate governance standards. Our focus on customer needs and satisfaction has generated additional value for shareholders. Our efforts have been recognized and endorsed by many international and domestic awards.

 

In 2017, Chunghwa Telecom was the only winner in Taiwan’s telecom industry to receive the “Brand of the Year” award from the World Brand forum, an honor we won for the third consecutive year. In the “Global 500 2017” from the globally renowned brand valuation consultant, Brand Finance, Chunghwa Telecom, one of the few Taiwanese companies that entered the ranking, placed 475th among the world’s top 500 brands. Chunghwa Telecom was also included in the DJSI Emerging Markets Index for the sixth consecutive year, reflecting the fact that our sustainability has been recognized by international investors. In addition, we received the “Trusted Brands” Platinum Award in the telecom category from Reader's Digest for the 13th year in a row as well as 1st place in Business Today’s Best Brand Award for the telecommunications sector, which demonstrate customers' trust in our innovative and compassionate services. Business Weekly also awarded us 1st place for “Taiwan Top 100 Brand” in the telecommunications category and 3rd place for “Original Brand” in 2017. Furthermore, we received the Platinum Corporate Award for five consecutive years from The Asset magazine, which reflects our achievements in earnings, management, governance, social and environmental responsibility, and investor relations.

 

These are the highlights from a long list of awards that recognize our efforts in business development, customer service, and social responsibility. We are encouraged by these endorsements of our achievements and will continue to perform and deliver for all of our stakeholders.

 

 

Future Outlook

 

Network quality is our strongest advantage and the foundation of our business. Going forward, the overall enhancement and maintenance of our mobile broadband network, fiber network, and undersea cables is one of our priorities. Coupled with our deployment of Next Generation Network technology, we are confident that we can provide high-quality, diversified cross-platform digital convergence services in addition to existing quality mobile broadband and fixed-line broadband services, value-added products, and ICT solutions. Our proactive marketing strategy will focus on designing competitive promotion plans and integrating service centers and internet stores to optimize the customer experience, which we believe will ultimately improve contribution per user and overall profit.

 

Speaking of leading an innovative digital economy, we aim to transform our services and internal management with a customer-centered mindset. In our core business, we will focus on channel restructuring and enterprise customer development to enhance user experience. In our video services, we will continue to integrate MOD and Hami Video/OTT services, acquire popular content and promote multi-screen applications. We aim to position ourselves as the smart home hub in customers’ living spaces while offering high-standard entertainment services. This is how we differentiate our services and provide value to customers.

 

Envisioning digital business opportunities, Chunghwa Telecom consistently invests in R&D and talent acquisition, especially in emerging fields like IoT, big data, Fintech, AR (Augmented Reality), and AI. Our outstanding platforms are key fundamentals that we can leverage to team up with partners to build an ecosystem for developing innovative ICT services. We will also leverage opportunities from the national “Asia Silicon Valley Project” and Taiwan’s southbound policy to extend services and acquire enterprise customers in overseas markets. We are dedicated to implementing strategies to lead the digital economy and innovations in industry, and remain committed to delivering additional value to our shareholders, customers, employees, and society at large.

                                                                                              

 

  Yu Cheng       Chi-Mao Sheih

                                                     Chairman and CEO                         President

                                                                                                                     April 27, 2018