4904 (twse) - fetnet · 2011-08-09 · yvonne li president 4904 (twse) 2011 2q investor update 2...
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Yvonne LiPresident
4904 (TWSE)
2011 2Q Investor Update2011 2Q 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. 2011 2Q Performance2011 2Q Performance
III.III. Business UpdateBusiness Update
4
(NT$mn)
51,831
17,661 20,324
6,021 6,057
51,948
0
20,000
40,000
60,000
80,000
100,000
2Q-10 2Q-11
Mobile Domestic Calls Int'l Calls
� Total Telecom Market Revenue in 2Q’11increased ����3.7% YoY with
� Mobile revenue (2G+3G)�0.2% YoY
� Fixed line revenue (domestic calls + Int’l call) �11.4% YoY (due to F2M
pricing right change)▶ Outgoing minutes in 2Q’11
� Mobile outgoing minutes ����6.0% YoY
� Fixed-line outgoing minutes �6.0% YoY
� Subscriber in 2Q’11
� Total mobile subs �4.9% YoY
� Fixed-line sub �0.7% 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
78,32978,32975,51275,512
����3.7% YoY
5
APBW+VIBO13%
FET27%
CHT33%
TWM27%
Mobile Service Rev Share (2Q 2011)Mobile Service Rev Share (2Q 2011)Mobile Service Rev Share (2Q 2011)
Taiwan Taiwan WirelessWireless MarketMarketMarket DynamicMarket Dynamic
Market UpdateMarket Update
Wireless Market
� Mobile competitive landscape remains stable while FET is gaining
0.6%0.6% revenue market share and
0.2%0.2% sub market share slightly
� More and more smart devices coming to the market helps drive rapid data revenue growth
Regulatory
� Restrictions on core and transmission equipment from China
Source: NCC statistics and operators’ factsheet; mobile revenue adjusted based on big 3 operators’ factsheets on consolidated basis
rev ↑↑↑↑3.0%YoY
rev↓↓↓↓4.8%YoY
rev↑↑↑↑1.6%YoY
rev↑↑↑↑5.8%YoY
6
AgendaAgenda
I.I. Market OverviewMarket Overview
II.II. 2011 2Q Performance2011 2Q Performance
III.III. Business UpdateBusiness Update
7
('000)
3,670 3,916
1,225 1,147 1,076 1,004 936
1,368 1,373 1,368 1,388 1,418
4,0203,800
4,147
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
3G Postpaid 2G Postpaid PrepaidSource: company data
Operational PerformanceOperational PerformanceIncreasing SubsIncreasing Subs
Total SubscribersTotal Subscribers
22%
78%
6,2636,360
2011 1H Subscriber Growth (%)2011 1H Subscriber Growth (%)
6,3206,412
����4%YoY
6,501
1.6%
1.2%
2.2%
0%
1%
2%
3%
FET CHT TWM
YoY Growth (%)
8
Million Minutes
3,7063,759
3,539
3,871
3,7153,656
3300
3600
3900
4200
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
Source: company data
Operational PerformanceOperational PerformanceMOU and ARPUMOU and ARPU
Growing Postpaid Minutes of UseGrowing Postpaid Minutes of Use Improved Postpaid ARPU Despite Negative Regulatory Impact
Improved Postpaid ARPU Despite Negative Regulatory Impact
NT$
832821
772
810
834
815
839
835
785
841
825
809
750
800
850
900
Jan Feb Mar Apr May Jun
Y2011 Y2010
����5.8%YoY 0.4%
YoY
0.2%YoY
1.5%YoY
����4.7%YoY
9
($mn)
13,298
13,844 13,83513806
13,40513443
10,000
11,000
12,000
13,000
14,000
15,000
1Q 2Q 3Q 4Q
($mn)
14,715 14,857
16,39017,474
18,45217,675
15,83815,25815,59814,792
13,40513,298
0
5,000
10,000
15,000
20,000
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
Total Revenue Service Revenue
Financial PerformanceFinancial PerformanceSteady Growing Top LineSteady Growing Top Line
Consolidated Revenue (1)Consolidated Revenue (1)Mobile Service RevenueMobile Service Revenue
Note: (1) Consolidated financials started to include NCIC and DataExpress numbers from Aug 17, 2010 and Dec 1, 2010, respectively.
3%YoY3%YoY
24%YoY24%YoY
18%18%YoYYoY 1%YoY1%YoY
2010 2011 2010 2011 2010 2010
10
($mn)
767701
762 751 782826
914902876882
756826
0
400
800
1,200
Jan Feb Mar Apr May Jun
2010 2011
316 302 295331
441
535
14.2%12.7%
11.6%
13.6%
17.9%
19.9%
0
100
200
300
400
500
600
700
800
900
1,000
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
($mn)
0%
3%
6%
9%
12%
15%
18%
21%
(%)
EBITDA EBITDA margin %
Financial PerformanceFinancial PerformanceTurn Around FixedTurn Around Fixed--Line BusinessLine Business
Fixed- Line RevenueFixed- Line Revenue Fixed-line EBITDA and EBITDA %Fixed-line EBITDA and EBITDA %
�7.7%YoY
�7.8%YoY
�15.8%YoY
�16.7%YoY
�9.3%YoY
16.9%16.9%
YoYYoY
11
1,727 1,7191,832
1,734
1,886
1,752
28.3%
30.1%29.2%
28.2%
30.0%
31.3%
1,000
1,300
1,600
1,900
2,200
2,500
Jan Feb Mar Apr May Jun
($mn)
20%
25%
30%
35%
(%)
EBITDA EBITDA margin %
642608
697656 662
746
300
400
500
600
700
800
900
Jan Feb Mar Apr May Jun
($mn)
Net Income
Financial PerformanceFinancial PerformanceImproving ProfitabilityImproving Profitability
2011 1H Consolidated EBITDA2011 1H Consolidated EBITDA 2011 1H Net Income2011 1H Net Income
����17%YoY
�2%YoY
�15%YoY
����23%YoY
����8%YoY
�3%YoY
����11%YoY
�6%YoY
����13%YoY
����3%YoY
�8%YoY
����3%YoY
12
(k subs)
703762
861
984
1,109
1,272
0
300
600
900
1,200
1,500
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
Data Service* Subscriber GrowthData Service* Subscriber Growth
Strong growth Strong growth
momentummomentum
Source: Company data
* Data Service includes smartphone related data rate plans and datacard, broadband, GPS related products
Mobile Data PerformanceMobile Data PerformanceAccelerated Mobile Data GrowthAccelerated Mobile Data Growth
NT$ mn
2,1282,288
2,4942,732
2,953
2,015
15.2%16.5%
18.0%
21.4%20.3%
15.9%
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'110%
5%
10%
15%
20%
25%
Data Rev Data % of Service Rev
Data %
FET Mobile Data Growth FET Mobile Data Growth
�4%YoY
�10%YoY
����39%YoY
�18%YoY
�28%YoY
�36%YoY
����67%YoY
�58%YoY
13
Mobile Data PerformanceMobile Data PerformanceThe Growth DriverThe Growth Driver
Mobile Data Revenue Breakdown in 2Q’11Mobile Data Revenue Breakdown in 2Q’11
1%1%
25%
7% 6%2% 2% 2%
50%
0%
20%
40%
60%
80%
WirelessBroadband +
transmission
Text SMS MobileAdvertising
Music e-Commerce Non-textMessaging
Entertainment Finance SocialNetworking
Mobile Data Revenue Mobile Data Revenue �������� 39% 39% YoYYoY (vs. 2Q’10), and major growths from:� Wireless broadband + Transmission (���� 95%YoY)� Entertainment (���� 92%YoY)� e-Commerce (���� 31% YoY)
14
102%18,171+4.4%17,67518,452▶ Total Revenue
104%1,984+6.0%1,9472,064▶Net Income
$0.60
29.9%
5,278
15,258
2011 Q1Actual
+6.0%
────+1.8%
+3.8%
QoQ%Achieve-
ment %2011 Q2Forecast
2011 Q2Actual
ItemUnit: NT$ million, except for EPS
$0.61
30.1%
5,460
15,722
104%$0.63▶ EPS(1)
────29.1%▶ EBITDA Margin %
98%5,372▶ EBITDA
101%15,838▶ Service Revenue
Consolidated Financial AchievementConsolidated Financial Achievement2011 Q2 Actual vs. 2011 Q2 Forecast2011 Q2 Actual vs. 2011 Q2 Forecast
Source: FET consolidated financials (1) EPS was based on current outstanding shares of 3,258,501K
15
Consolidated Financial AchievementConsolidated Financial Achievement2011 1H Actual vs. 2011 1H Forecast2011 1H Actual vs. 2011 1H Forecast
Source: FET consolidated financials (1) EPS was based on current outstanding shares of 3,258,501K
101%35,86636,127▶ Total Revenue
100%31,01731,095▶ Service Revenue
99%10,72410,650▶ EBITDA
-29.9%29.5%▶ EBITDA%
102%3,9234,011▶Net Income
$1.23
2011 1HActual
Achievement%2011 1HForecast
Item(Unit: NT$ Million, except for EPS & margin)
$1.20 102%▶ EPS(1)
16
As of 2011 Q1As of 2011 Q1
Consolidated FinancialConsolidated FinancialFYFY20201111 Q2 Q2 Financial StatsFinancial Stats
As of 2011 Q2As of 2011 Q2
Cash & Cash Equivalents
Available-for-Sale Financial Assets &
_Derivatives
Total Borrowing
Net Cash*
Shareholders’ Equity
Debt/Capitalization Ratio Gross (%)Gross (%)
Net (%)Net (%)
Free Cashflows – YTD
Cash-based Capex – YTD
EPS(NT$) – YTD
Source: FET Consolidated financials* Net Cash = Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives – Total Borrowing
(NT$ mm unless otherwise stated)
9,194
3,452
1,750
10,896
68,068
22..55% % ────────6,348
3,837
$0.63
8,884
3,641
4,025
8,500
74,119
55..22% % ────────3,676
1,749
$0.60
17
AgendaAgenda
I.I. Market OverviewMarket Overview
II.II. 2011 2Q Performance2011 2Q Performance
III.III. Business UpdateBusiness Update
18
(%)
18%
30%
58%
26%
45%
58%
0%
20%
40%
60%
1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11
� Smart devices (smartphones + tablets ) accounted 58% of total new devices sold in 2Q’11
� Monthly tablet sales exceeded netbooksstarting Q3 (In June, tablets increased to 10% of new smart devices sold)
� Smartphone penetration* reached 17-18% of total postpaid subs in 2Q’11
� APRU: average smartphone user’s ARPU is ~1500; while iPhone users’ARPU is ~NT$2200
� Usage: Avg smartphone user’s data usage is 700-800 MB / month; while iPhone and HTC high-end Android usage is 1.2-1.4GB / month and tablet’s usage is 1.5-1.7GB / month
Some StatisticsSome StatisticsSome Statistics
Smart Device StatisticsSmart Device StatisticsStrong Data Growth driven by Smart Devices UptakeStrong Data Growth driven by Smart Devices Uptake
Smart Device as % of Total Device SoldSmart Device as % of Total Device SoldSmart Device as % of Total Device Sold
* Smartphone penetration means smartphone users as % of total postpaid subs excluding data only subs
19
2H 20112H 2011▶▶ All brands and all price tiers to come All brands and all price tiers to come
into the marketinto the market……..
1H 20111H 2011▶ Has been offering ~30 smart devices
SamsungView Sonic
Samsung
AppleView Sonic
ZTE
ZTE
Device PortfolioDevice PortfolioFull Range of Smartphone and Tablet DevicesFull Range of Smartphone and Tablet Devices
HTCDesire ZLG E720
Acer LiquidMetal
iPhone 4
Google PhoneIDEOS
Acer Moto
Huawei
HTC
HTC Aria
HTCLegend black
HTCDesire HD
Samsungi9003
Acer Liquidmini
HTCDesire S
AsusHTC
WildfireS
Huawei X3
Apple
Sony Ericsson
Black O
Moto Atrix
20
▶▶ Bella Apps Bella Apps -- #1 download of lifestyle Apps#1 download of lifestyle Apps in Apple App in Apple App
StoreStore
▶▶ Launched Launched Video StoreVideo Store through through cocoops ops with with CatchPlayCatchPlay
▶▶ 4 Asset Bases4 Asset Bases + Tablets/+ Tablets/SmartphonesSmartphones
▶▶ Launched Launched ‘‘8 categories8 categories’’ Cloud Solution ServicesCloud Solution Services to to
Enterprise CustomersEnterprise Customers
▶▶ Acquired major enterprise accounts with Innovative Acquired major enterprise accounts with Innovative
Company Zone SolutionsCompany Zone Solutions
▶▶ ConexusConexus + HTC + HTC
▶▶ Cooperation withCooperation with Quanta on Cloud businessQuanta on Cloud business
2011 Q2 Business Update2011 Q2 Business UpdateInnovationInnovation
21
▶▶ LaunchedLaunched unlimited daily data roaming rateunlimited daily data roaming rate with with
CMCC in AprilCMCC in April
▶▶ Launched Launched Game StoreGame Store on CMCC Game Base in on CMCC Game Base in
AprilApril
▶▶ CoCo--operate with CMCC onoperate with CMCC on ChengduChengdu & & NingboNingbo
Wireless City ProjectWireless City Project
▶▶ Next cooperation to be launched with CMCC Next cooperation to be launched with CMCC --
Music, Reading & eMusic, Reading & e--ComicsComics
▶▶ Provided oneProvided one--step crossstep cross--strait circuit services on strait circuit services on
IPLC & CSIPLC & CS--VPN serviceVPN service
2011 Q2 Business Update2011 Q2 Business UpdateCrossCross--Strait CooperationStrait Cooperation
22
▶▶ 2011 Apr2011 Apr
▶▶ 2011 May2011 May
▶▶ 2011 Jun2011 Jun
2011 Q22011 Q2Awards and RecognitionsAwards and Recognitions
Certified of Certified of ““CG6006 Advanced Corporate CG6006 Advanced Corporate
GovernanceGovernance”” by Taiwan Corporate Governance by Taiwan Corporate Governance
AssociationAssociation
Awarded the Awarded the ““Best Investor RelationsBest Investor Relations”” in in
Asia's Best Companies Poll 2011 by Asia's Best Companies Poll 2011 by
FinanceAsiaFinanceAsia MagazineMagazine
The 5th time being awarded the highest rank The 5th time being awarded the highest rank
Grade A+ in the Grade A+ in the ‘‘Information Transparency and Information Transparency and
Disclosure RankingsDisclosure Rankings’’, among the , among the top 10 top 10 ““Grade Grade
A+A+”” companies out of total 1190 Taiwan companies out of total 1190 Taiwan
companiescompanies
23
Q & AQ & A
Websites email
Investor Relations
Investor Relations
http://corporate.fetnet.net
http://www.fetnet.net
http://corporate.fetnet.net
http://www.fetnet.net
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