4904 (TWSE) · 2010. 11. 4. · Samsung GALAXY 580 Android 2.1 Nokia C7 Sybiam3 Acer Stream Android...

Yvonne LiPresident

4904 (TWSE)

2010 3Q Investor Update2010 3Q Investor Update

2

Disclaimer

This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.

In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.

3

AgendaAgenda

I.I. Market OverviewMarket Overview

II.II. 2010 3Q Performance and 2010 3Q Performance and

Business UpdateBusiness Update

III.III. Strategic DirectionStrategic Direction

4

(NT$mn)

52,026

18,229 17,845

6,063 6,332

53,348

0

20,000

40,000

60,000

80,000

100,000

3Q-09 3Q-10

Mobile Local Calls Int'l Calls

� Total Telecom Market Revenue increased slightly ��1.6% YoY with

� Mobile revenue (2G+3G)�2.5% YoY

� Fixed line revenue (local calls + Int’l call) �0.5% YoY

� Subscriber

� Total mobile subs �5.4% YoY

� Fixed-line sub �1.1% YoY

� Outgoing minutes

� Mobile outgoing minutes �8.0% YoY

� Fixed-line outgoing minutes �3.4% YoY

Taiwan Telecom Market RevenueTaiwan Telecom Market RevenueTaiwan Telecom Market Revenue Market PhenomenonMarket Phenomenon

Source: NCC statistics; fixed-line revenue only contains voice and mobile revenue adjusted based on big 3 operators’ factsheets on consolidated basis

Taiwan Telecom MarketTaiwan Telecom MarketMarket OverviewMarket Overview

77,52577,52576,31876,318

��1.6% YoY

5

APBW+

VIBO

13.1%

FET

25.9%

CHT

34.7%

TWM

26.2%

Mobile Service Rev Share (2010 Q3)Mobile Service Rev Share (2010 Q3)Mobile Service Rev Share (2010 Q3)

Taiwan Taiwan WirelessWireless MarketMarketMarket DynamicMarket Dynamic

Market UpdateMarket Update

Market

� Mobile Revenue Market Share of big 3

operators has been very stable for last

few quarters while small operators did

take some market share through cheap

pricing strategy

� Smartphone’ higher ARPU does help

increase mobile revenue but its high

subsidy also erode operators’ short-term

profits

Source: NCC statistics and operators’ factsheet; mobile revenue adjusted based on big 3 operators’ factsheets on consolidated basis

6

AgendaAgenda





7

Million Minutes

3,759

3,5393,656

3400

3600

3800

4000

1Q'10 2Q'10 3Q'10

NT$843

817 821

800

820

840

860

1Q'10 2Q'10 3Q'10

('000)

3,576 3,800

1,307 1,225 1,147

1,354 1,368 1,373

3,670

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1Q'10 2Q'10 3Q'10

3G Postpaid 2G Postpaid PrepaidSource: company data

Operational PerformanceOperational PerformanceGaining MomentumGaining Momentum

Increasing Total SubscribersIncreasing Total Subscribers

22%

78%

6,237 6,263 6,320

Improved Postpaid ARPUImproved Postpaid ARPU

Improved Postpaid Minutes of UseImproved Postpaid Minutes of Use

��2.7% QoQ

��2.8% QoQ

8

($mn)

14,715 14,857

16,390

14,79213,40513,298

0

5,000

10,000

15,000

20,000

1Q'10 2Q'10 3Q'10

Total Revenue Service Revenue

($mn)

13,298 13,405 13,844

0

5,000

10,000

15,000

20,000

1Q'10 2Q'10 3Q'10

Financial PerformanceFinancial PerformanceGrowing Top LineGrowing Top Line

Consolidated RevenueConsolidated Revenue Mobile Service RevenueMobile Service Revenue

Source: company data; FET & NCIC P&L have been consolidated since Aug 17, 2010

Fixed-Line Service RevenueFixed-Line Service Revenue

($mn)

2,320 2,359 2,544

0

1,000

2,000

3,000

4,000

1Q'10 2Q'10 3Q'10

9

(k subs)

677687 691

703 711

738762

787

823

861

600

650

700

750

800

850

900

Y2009

Jan-1

0

Feb-1

0

Mar

-10

Apr-1

0

May

-10

Jun-1

0

Jul-1

0

Aug-1

0

Sep-1

0

Non-Voice Service* Subscriber GrowthNon-Voice Service* Subscriber Growth

Strong growth Strong growth

momentummomentum

Source: Company Data; * Non-voice Service includes smartphone related non-voice plans and datacard, broadband, GPS related products

Mobile NonMobile Non--Voice PerformanceVoice PerformanceUptake of NonUptake of Non--Voice Service SubscribersVoice Service Subscribers

16.5%14.9%

15.8%

10%

12%

14%

16%

18%

FET TWM CHT

2010 3Q Non-Voice % of Service Rev2010 3Q Non-Voice % of Service Rev

#1: FET keeps the leading position

NT$ mn

1,9352,288

13.9%16.5%

1,000

1,500

2,000

2,500

3Q-09 3Q-100%5%10%15%20%

Non-Voice Rev Non-Voice % of Service Rev

Non-Voice%

FET Mobile Non-Voice Growth FET Mobile Non-Voice Growth

��18%

10

32%

32% 36%51% 55% 61% 63% 66% 68%

34%64% 49% 47% 45% 39% 37%

68%

53%

0%

20%

40%

60%

80%

100%

Y2004

Y2005

Y2006

Y2007

Y2008

Y2009

1Q'1

0

2Q'1

0

3Q'1

0

Non-SMS rev % to data rev SMS rev % to data rev

Mobile NonMobile Non--Voice PerformanceVoice PerformanceMain Growth Driver from NonMain Growth Driver from Non--SMS ServicesSMS Services

SMS % of Non-Voice RevSMS % of Non-Voice Rev Non-SMS Rev Breakdown in 3Q’10Non-SMS Rev Breakdown in 3Q’10

Non-SMS portion getting bigger

Source: Company data

15.0% 12.3%3.4% 2.2% 2.1%

65.3%

0%

20%

40%

60%

80%

Wireless

Broadband

+

transmission

Mobile

Advrtising

Music e-commerce Social

Ntwrking

Entertainmt

Major growths from:� Wireless broadband + Transmission

(��59%YoY)� Entertainment (�� 58%YoY)

11

Consolidated Financial AchievementConsolidated Financial Achievement2010 YTD vs. 2010 Annual 2010 YTD vs. 2010 Annual FF’’cstcst

Source: FET consolidated financials,. FET & NCIC P&L have been consolidated since Aug 17, 2010(1) EPS was based on current outstanding shares of 3,258,501K

74%62,06545,962�Total Revenue

75%54,97041,495�Service Revenue

73%22,62116,516�EBITDA

-36.4%35.9%�EBITDA%

-43.0%43.5%�Service EBITDA %

71%9,2746,617�Net Income

$2.03

2010 YTD(1-3Q’10l)

Achievement%2010

ForecastItem

(Unit: NT$ Million, except for EPS & margin)

$2.85 71%�EPS(1)

12

As of 2010 Q2As of 2010 Q2

Consolidated FinancialConsolidated Financial20201010 YTDYTD Financial StatsFinancial Stats

As of 2010 Q3As of 2010 Q3

Cash & Cash Equivalents

Available-for-Sale Financial Assets &

_Derivatives

Total Borrowing

Net Cash*

Shareholders’ Equity

Debt/Capitalization Ratio Gross (%)Gross (%)

Net (%)Net (%)

Free Cashflows – YTD

Cash-based Capex – YTD

EPS(NT$) – YTD

* Net Cash = Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives – Total Borrowing Source: FET Consolidated financials

(NT$ mm unless otherwise stated)

8,278

5,815

11,267

2,827

71,293

1313..66% % ────────9,565

6,263

$2.03

15,207

2,833

902

17,138

67,432

11..33% % ────────5,954

4,149

$1.31

13

�� Smartphone users account for Smartphone users account for 9.0%9.0% of of

total postpaid subs total postpaid subs

�� ~30%~30% of new handset takers choose of new handset takers choose

smartphonessmartphones

�� Smartphone userSmartphone user’’s ARPU is s ARPU is more thanmore than2x 2x of normal userof normal user’’s ARPUs ARPU

�� SmartphoneSmartphone useruser’’s nons non--voice voice

spending increased to spending increased to 27% 27%

(vs. average = (vs. average = 1616--17%17%) )

�� Current average Current average smartphonesmartphone useruser’’s s

data usage isdata usage is 400400--500 MB / month500 MB / month

Some StatisticsSome StatisticsSome Statistics

Smartphone StatisticsSmartphone StatisticsSmartphoneSmartphone Take Up Drives Strong NonTake Up Drives Strong Non--Voice GrowthVoice Growth

Smartphone Penetration* (%)Smartphone Penetration* (%)Smartphone Penetration* (%)

(%)

5.9%6.1%6.4%6.8%7.3%7.7%8.0%8.3%

9.0%

0%

3%

6%

9%

12%

Jan-1

0

Feb-1

0

Mar

-10

Apr-

10

May

-10

Jun-

10

Jul-1

0

Aug-1

0

Sep-1

0

* Smartphone penetration means smartphone users as % of total postpaid subs excl data only subs

14

4Q4Q’’1010�� More More smartphonessmartphones to be introduced from Acer, HTC, Samsungto be introduced from Acer, HTC, Samsung……

�� Tablet devices ( Tablet devices ( ) also coming) also coming

Device PortfolioDevice PortfolioFull Range of Full Range of SmartphoneSmartphone and Tablet Devicesand Tablet Devices

2H2H’’1010� Introducing more than 10 key smartphones in 2H 2010

� Among them, 10 has been launched

HTC Aria (Liberty)HTC Aria (Liberty)Android 2.1Android 2.1

HTC HeroHTC HeroAndroid 2.1Android 2.1

Acer Liquid EAcer Liquid EAndroid 2.1Android 2.1

Nokia X6Nokia X6S60S60

Acer beTouch E400Acer beTouch E400Android 2.1Android 2.1

iPhoneiPhone 44SamsungGALAXY 580Android 2.1

Nokia C7Sybiam3

Acer StreamAndroid 2.1

Google PhoneIDEOS Android 2.2

AppleiPad

SamsungGALAXY TabP1000

ViewSonicViewSonicViewPadViewPad 77

15

Short , Casual readingStar’s Travel Photo BookKid’s Story Book

Light Novel

Great for whenyou’re on the go

Great for whenyou’re sitting down

Longer readingIn-depth, immersed experience

Translated Fictions…Various Magazines

Coming in November

‘‘ee--Book TownBook Town’’ UpdateUpdateExpand Content to Multiple DevicesExpand Content to Multiple Devices

Picture Books Picture Books �� Multimedia BooksMultimedia Books

16

RENT

EBOOKS

Save More

RENT

EBOOKS

Save More

� Rental Service (Mid-Nov)

� e-Comics (Mid Nov~)

� e-Book App (Mid Oct)

� e-Catalog (Nov)

Increase Up-takes

Increase ContentSource / Traffic

Increase Repeat VisitsIncrease Repeat Visits

Include JapaneseeComics

Speed-up Acquiring of Multi-media Form of Books

Increase Business DiversificationIncrease Business DiversificationNew Content, New Services and New AuthorsNew Content, New Services and New Authors

� User Generate Content (UGC) & C2C Service (Nov)

17

‘‘S MartS Mart’’ PerformancePerformanceThe Most Popular Chinese Android Application StoreThe Most Popular Chinese Android Application Store

with Local Relevance and Variety of Appswith Local Relevance and Variety of Apps

Launched CMCC Mobile Market Launched CMCC Mobile Market ““Store in StoreStore in Store”” on Nov 3on Nov 3

46%

3%7%

14%14%16%

0%

20%

40%

60%

Entertain

-ment

Game Utilities

(Tools)

Life

Style

Social-

Network

Biz/Others

30,82835,231

41,557

71,686

100,654

8,546

24,486

13,518

25,573

35,807

31,097 32,935

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

Oct-

09

Nov-

09

Dec-

09

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul -

10

Aug-

10

Sep-

10

‘S Mart’ App Downloads‘‘S MartS Mart’’ App DownloadsApp Downloads Popular Downloaded Apps BreakdownPopular Downloaded Apps BreakdownPopular Downloaded Apps Breakdown

�Attract 66% of non-FET users�users download increased to 5 apps

per month �Premium apps : Free apps = 3 : 2

Accumulated downloaded apps

> 462K

18

OmusicOmusic11stst JV among OP, Music Label, and SP establishedJV among OP, Music Label, and SP established

� Omusic, JV among 5 major labels (Universal, Gold

Typhoon, Linfair , HIM, Forward), one service provider

(Otiga), and FET established on Sep 20, with another

4 music labels hold option for the investment

� Omusic will start its RBT (Ring Back Tone) service in

November, exclusive to FET subscribers. Its on-line

music service, including music download, streaming,

and music games for smart phones will be launched in

Q1 2011 and will openly serve all music lovers

through internet

19

Consumer Multi-media VAS

One product, two marketsOne product, two markets

550M subs

6M subsgame comic application e-book

cloud

computing

machine to

machine

information

security

Enterprise Solutions

CMCC Strategic CooperationCMCC Strategic CooperationMoving OnMoving On

music

20

AgendaAgenda





21

Strategic DirectionStrategic Direction

China

Taiwan

Excellent Customer Excellent Customer

ServicesServices

Enterprise Market Enterprise Market TargetingTargeting

Device/Contents and Device/Contents and

Smart PartneringSmart Partnering

Synergy of NCIC MergerSynergy of NCIC Merger

Strengthen Distribution Strengthen Distribution ChannelChannel

Geographic OpportunityGeographic Opportunity1 solution to 2 markets

Customer

Centric

Profitable Growth

Innovation

22

� Grow revenue through providing integrated solutions by different industry

segment

� Develop mobile applications, machine-to-machine and cloud computing solutions by market segment

� Gain new SME customers through providing Industrial specific solutions

� Enhance service level and drive customized services for customers

Enterprise StrategyEnterprise Strategy

23

Q & AQ & A

Websites email

Investor Relations

[email protected]

Investor Relations

[email protected]

http://corporate.fetnet.net

http://www.fetnet.net

http://corporate.fetnet.net

http://www.fetnet.net

For Further Information:

4904 (TWSE) · 2010. 11. 4. · Samsung GALAXY 580 Android 2.1 Nokia C7 Sybiam3 Acer Stream Android...

Documents

Transcript of 4904 (TWSE) · 2010. 11. 4. · Samsung GALAXY 580 Android 2.1 Nokia C7 Sybiam3 Acer Stream Android...