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Chunghwa Telecom's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: CHT

The successful broadcasting of 2012 London Olympic Games demonstrated our capability to offer multi-screen high-definition services on our platforms. Moreover, the operation of our new MOD platform, which includes interactive capabilities, was approved by the NCC in June. We expected that this new, interactive platform will help facilitate the convergence of our digital service offerings which we believe will be a key trend going forward.

Let’s go through our businesses. On slide 5. For our mobile operation, we plan to maintain our leadership by further providing reliable and the seamless wireless access under great customer service to our subscribers while attracting new customers with our price competitive mobile plans.

By leveraging our customer base through attractive data plan upgrades, smartphone adoption remains on track. In fact, for the first half of 2012, smartphones accounted for 67% of all new handset sales. As a percentage of postpaid subscribers, smartphone penetration increased to 32% by the end of the second quarter.

By year-end, we expect this rate to approach 39%. In addition, we are in the process of expanding and transforming many of our retail stores. We believe this effort to improve the layout and the customer services experience for current and potential subscribers will create an impressive and pleasant user experience. We hope that such changes will lead to improved customer experience, satisfaction and loyalty for years to come.

Moving to slide 6. Mobile internet service revenue continued its strong momentum in the second quarter of 2012 with over 54% year-over-year growth. As discussed earlier, we believe that this trend will sustain as we continue to see adoption in smartphones and other mobile internet devices and we are actively promoting further adoption.

For example, this year, we began a promotional program focused on data plan adoption with free on-net calls. Our Student Data Plan, which is meant to attract students and young customers, saw a 90% uptick rate from existing customers who were not data users previously.

We will continue to encourage our large base of mobile subscribers to upgrade to data plans through such promotional efforts. In addition, we’ll also continue targeting new user growth and further expanding our market share.

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