Chunghwa Telecom Reports Consolidated Operating Results For The Third Quarter And First Nine Months Of 2011

Revenue

Chunghwa's total consolidated revenue for the third quarter of 2011 increased by 9.5% year-over-year to NT$55.71 billion, of which 42.6% was from the mobile business, 11.6% was from the internet business, 36.8% was from the domestic fixed business, 6.8% was from the international fixed business, and the remainder was from others. Despite the National Communications Commission ("NCC") tariff reduction that came into effect on April 1, 2010, Chunghwa succeeded in maintaining its growth momentum, due mainly to an increase in fixed line revenue resulting from the shift in the pricing right of a fixed-to-mobile call from mobile to fixed network operators, as well as mobile VAS and handset sales. In addition, property sales from the Company's property development subsidiary also contributed to Chunghwa's revenue growth.

Total revenue for the mobile business amounted to NT$23.76 billion for the third quarter 2011, representing a year-on-year increase of 6.6%, mainly due to growth in mobile VAS revenue and handset sales relating to smartphone promotions, which offset the decline in mobile voice revenue. The decline in mobile voice revenue resulted primarily from the shift in pricing right for fixed to mobile calls from mobile to fixed operators and the NCC mandated tariff reduction.

Chunghwa's internet business revenue increased to NT$6.44 billion in the third quarter of 2011, with a lower 0.6% year-over-year growth rate than before due to the company's broadband tariff reduction in June.

For the third quarter of 2011, domestic fixed revenue totaled NT$20.52 billion, representing an increase of 17.1% year-over-year. Local revenues increased by 32.6% year-over-year, mainly due to the shift in pricing right for fixed to mobile calls. The 11.4% decline in Domestic Long Distance ("DLD") revenues was due to mobile and Voice over Internet Protocol ("VOIP") substitution, as well as reflecting the mandated tariff reduction.

Broadband access revenue, including ADSL and Fiber to the x ("FTTx"), decreased by 2.1% year-over-year to NT$5.01 billion, primarily due to the company's broadband tariff reduction in June, as well as the mandated tariff reduction

International fixed line revenue decreased by 6.0% to NT$3.78 billion, primarily due to the decrease in international long distance service revenue as a result of market competition.

Other revenue grew by 94.8%, primarily due to the increase in property sales from the Company's property development subsidiary.

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