CHT 2Q 2026 Results
August 5, 2026, at 4:00 P.M. (Taipei Time)
Thank you. I am Angela Tsai, Vice President of Finance at Chunghwa Telecom. Welcome to
our second quarter 2026 earnings conference call. Joining me today are Chunghwa’s President
Rong-Shy Lin, and our Chief Financial Officer, Audrey Hsu.
During today’s call, management will begin by sharing our recent strategic achievements and
providing an overview of our second quarter business results. This will be followed by a
discussion of our segment performance and financial highlights. We will then open the floor
for questions and answers.
Please turn to slide 2 to review our disclaimers and forward-looking statement disclosures.
Now, without further delay, I will turn the call over to our President. President Lin, please go
ahead.
Recent Strategic Achievements
Thank you, Angela, and hello, everyone. Welcome to our second quarter 2026 results
conference call.
We are excited to announce robust second quarter and first-half results, with revenue, operating
income, net income, and EPS all exceeding the high-ends of our guidance. Notably, total
revenue for the second quarter climbed to its highest for any second quarter since 2010, driven
by solid business growth. In addition, our ICT revenue reached its highest second-quarter level
since 2021. Based on our outperformance in the first half, we are confident in achieving our
full-year performance targets.
In 2026, we continued to invest in AI and see concrete results. In the morning today, we
announced the kick-off of the operation of our newly built AI data center in Lunping, Taoyuan,
which is expected to add up to 36 megawatts to our total IDC capacity upon full build-out. In
July, we were pleased to sign a Memorandum of Understanding with the Taiwan Stock
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Exchange to provide dedicated colocation capacity within our new AI Data Center in Taichung,
currently under construction, further expanding our market-leading financial co-location
ecosystem in Taiwan. Both achievements demonstrate our ability to convert AI infrastructure
investments into long-term financial return.
Furthermore, leveraging our leading AIDC infrastructure and Sea-Land-Sky network
deployment, we are positioning Chunghwa Telecom as the region's unique AAA Hub for the
AI era. Powered by our IOWN network and distributed AIDCs, the AAA Hub delivers three
core values: Assurance, providing resilient Sea-Land-Sky connectivity; All-Photonics,
enabling ultra-high-capacity, low-latency and energy-efficient networking through IOWN; and
AI Hub, connecting distributed AI computing resources across the Asia-Pacific to support
customers' AI development.
In addition, in terms of IOWN, we’d like to highlight the IOWN AI Fund, which is the financial
instrument we jointly-established with global partners in June. The Fund aims to not only build
the IOWN ecosystem, but also create new business opportunities through technology
investments, as all investors believe the optical ecosystem is essential to AI development.
Our subsidiaries also continued to seize AI related opportunities. In the second quarter,
Chunghwa Precision Test Tech (精測) commenced new factory construction to meet growing
AI semiconductor testing demand, while Chunghwa Leading Photonics Tech (立鼎),which
stands to benefit from potential opportunities in the AI supply chain, began trading on the
Emerging Stock Exchange in June.
Finally, we are delighted to report the ESG recognitions received in the second quarter,
including CDP’s top “A-List” rating for supplier engagement, the “Best Issuer for Sustainable
Finance” and “Best Sustainability Bond” awards from The Asset, and the TOP 5% of Taiwan
Stock Exchange (TWSE)-listed companies for corporate governance. Additionally, we are
proud to report that despite continued revenue growth in 2025, we remained on track with our
SBTi commitments, reducing Scope 1 and 2 greenhouse gas emissions by 24.5% from our
2020 baseline and Scope 3 emissions by 10.8% from our 2021 baseline. Now, let’s move on
to our second quarter 2026 results.
Business Overview – Mobile Service
In the second quarter, we continued our market share leadership in Taiwan’s mobile market.
Our mobile revenue market share continued to increase, climbing to a record high of 41.2%,
while our subscriber market share rose to 39.8%, according to our telecom regulator. We would
particularly like to highlight the strength of our premium subscriber base, as our revenue share
continued to exceed our subscriber share.
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Our 5G performance was equally impressive. The 5G market share in Taiwan reached 39.4%,
maintaining No. 1 status, while 5G penetration rate among smartphone users increased to
nearly 49% as of June. The average monthly fee uplift from 5G migration remained stable at
36%, and postpaid churn rate stayed at a low level of 0.36%, reflecting strong customer loyalty.
Thanks to the market-leading subscriber base, growing 5G adoption, and the increased roaming
revenue, on a year-over-year basis, our mobile service revenue grew by 3.2%, outperforming
the industry average. Meanwhile, postpaid ARPU increased by 2.4%, or NT$13.
Notably, we observed our roaming revenue increased 19% year-over-year in the second quarter,
with inbound roaming revenue growing 42%, benefiting from robust tourism demand and
increasing international travel activities.
Business Overview – Fixed Broadband Service
Let’s move on to Slide 6 for our fixed broadband business update.
In the second quarter, we were glad to see the number of subscribers adopting service speeds
of 300 Mbps and above reached 42% of our total fixed broadband subscriber base, and the
number continued to increase quarter over quarter. Among them, subscribers adopting 1 Gbps
and above increased 61% year-over-year, supported by the continued success of our broadband
promotion packages.
As a result, fixed broadband revenue in the second quarter posted a 3% increase year over year,
while the ARPU rose year-over-year by NT$20 to NT$824 per month. Fixed broadband
subscribers also continued to deliver positive growth year-over-year. We will continue to keep
the business up and sustainable.
Consumer Application Services –2Q26 Highlights
Page 7 highlights the performance of our million-subscriber consumer services.
In the second quarter, sign-ups of our multiple-play offerings, which integrates mobile, fixed
broadband and Wi-Fi services, continued to grow year over year for the 18th consecutive
quarter, representing a 14% increase year over year and driving up our overall telecom revenue
growth. Notably, our Wi-Fi penetration among fixed broadband subscribers reached 57%,
serving as a solid basis for smart home connectivity.
As the 2026 FIFA World Cup™ kicked off in June, and ran through July, it successfully boosted
video subscription numbers to their annual peak in July. At the same time, the introduction of
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Datatainment, a real-time match-data and highlights feature, during this FIFA World Cup
helped drive total views of tech-supported broadcasts across MOD and Hami Video up 24%
compared with the previous tournament. As a result, we were glad to see our total OTT revenue
in the second quarter increased 20% year over year. With the upcoming Asian Games in the
third quarter, we are optimistic about our video performance through the next quarter.
Lastly, our digital services continued to deliver solid growth. The subscriber number of our
consumer cybersecurity services maintained over one million and delivered 11% year-overyear growth, supported by rising awareness of digital security. Meanwhile, the number of
transacting users of our Direct Carrier Billing, or DCB, increased by 4.7% year-over-year. As
customers continue to adopt digital content, gaming, and AI applications and tools, we
continued to see potential growth in DCB services going forward.
Enterprise ICT Performance – 2Q26 Highlights
Slide 8 illustrates the key developments in our enterprise ICT business.
Through collective efforts across the Group, our ICT business delivered another strong quarter,
with revenue increasing 32% year over year, driven by the continued expansion of emerging
services. Recurring ICT revenue also grew by 9%, maintaining solid momentum across major
service lines, particularly IDC, cybersecurity, and international public cloud services.
Among our core ICT service pillars, big data, cybersecurity, and IDC are the key growth drivers,
posting year-over-year growth of 167%, 34% and 14%, respectively. Big data revenue surged
and cybersecurity revenue grew strongly, driven by the recognition of large-scale projects for
public-sector customers, while IDC revenue growth was supported by installation projects for
manufacturing companies.
Notably, a key highlight is our record high ICT order intake. Building on the strong momentum
in ICT contract acquisitions during the first quarter, our ICT order intake remained robust in
the second quarter, with contract value increasing by 30% year over year. As a result, the total
ICT contract value secured in the first half of the year has already matched the full-year total
amount achieved in 2025, reflecting a strong project pipeline and reinforcing our confidence
in future growth.
As of June, our major contract wins in the second quarter included large-scale AIDC projects,
which are expected to further increase AI-related revenue; flagship Taipower energy storage
projects, positioning us for additional smart grid opportunities; and multiple smart surveillance
projects from correctional institutions, demonstrating our ability to replicate successful
deployments across the sector. In addition, we became the first telecom operator to provide
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cloud-based encryption sharing services to the financial industry, further reinforcing our
differentiated ICT market leadership.
International Performance – 2Q26 Highlights
Slide 9 highlights the robust performance of our international subsidiaries and global network
performance.
In the second quarter, our international subsidiaries delivered impressive performance as
aggregate revenue increased 242% year-over-year, primarily due to the large-scale ICT project
deliveries across the U.S. and Southeast Asia.
In the U.S., revenue increased more than eleven-fold year-over-year, mainly due to the delivery
of the large-scale AI supply chain projects in Texas. Meanwhile, revenue in Southeast Asia
doubled on year, supported by ongoing construction projects for key customers in Singapore
and Vietnam.
Encouragingly, with our proven overseas ICT integration expertise, we have successfully
secured new projects across the U.S., Singapore and Thailand, providing strong visibility into
future growth.
In addition to the strong momentum of overseas ICT business, our network resilience business
continued to expand with our Asia-Pacific "AAA Hub" strengths. Satellite service revenue
increased 14% year-over-year, supported by increasing adoption of satellite connectivity
solutions across industries. Notably, satellite-related ICT contracts secured in the first half
exceeded NT$200 million, highlighting the growing demand for diversified communications
infrastructure.
Another key growth driver from "AAA Hub" strengths is the international private leased circuit
business, whose revenue increased 8% year-over-year, mainly driven by SJC2 and Apricot
submarine cables.
Looking ahead, given the ramp up of AI driven data traffic and the growing international
connectivity demand resulting from geopolitical uncertainties, we are well positioned to
capture these opportunities supported by continuous investment in submarine cable and
satellite projects.
Business Group – 2Q26 Highlights
Now, let’s move on to page 10 for the financial performance of our three business groups.
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In the second quarter, our core telecom business remained strong. Growth in mobile services,
fixed broadband, and handset sales drove Consumer Business Group revenue up 4.8% yearover-year, while income before tax increased a solid 3.6%.
Beyond our core telecom business, ICT business continued to be a key growth engine. Strong
ICT demand, along with growth in mobile and broadband services, lifted Enterprise Business
Group revenue by 3.7% year-over-year, while income before tax increased 2.1%.
In the second quarter, the strongest performance came from our International Business Group,
which saw growth across every segment, resulting in an approximately 79% increase in
revenue on year and 31% increase in income before tax on year, respectively. This was
propelled by rising demand for ICT integration projects mainly driven by the re-location of AI
supply chain, contributions from the SJC2 and Apricot submarine cables as well as strong
roaming revenue increase.
That concludes the business overview for the second quarter. Now, I would like to hand the
call over to Audrey for financial updates.
Financial Overview
Thank you, President. Good afternoon, everyone, and thank you for joining us today. I am
pleased to walk you through our financial performance for the second quarter of 2026. Please
turn to Slide 12.
Income Statement Highlights
In the second quarter, we delivered record-high performance for the period. Consolidated
revenue reached NT$61.36 billion, representing an 8.2% increase year-over-year and marking
our highest Q2 top line since 2010.
This strong momentum was driven by three primary engines. First, our ICT business achieved
its highest Q2 revenue since 2021, propelled by our overseas subsidiaries fulfilling major AI
supply chain projects in the U.S. and Southeast Asia, alongside rapid domestic growth in big
data, cybersecurity, and AIDC capacity. Second, product sales grew behind elevated handset
ASPs at Senao and strong AI testing contributions from Chunghwa Precision Test. Third, our
core telecom services continued their steady expansion, reinforced by ongoing high-tier 5G
migration, and broadband speed upgrades.
Moving to operating profitability, income from operations rose 5.7% year-over-year. Beyond
top-line scale, this operating growth reflects high-margin flow-through from our core telecom
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business—supported by 5G adoption and fixed broadband speed upgrades—paired with
margin-accretive contributions from Chunghwa Precision Test. On the bottom line, EPS
expanded to NT$1.38, up from NT$1.31 in the prior-year period, marking our highest secondquarter EPS in ten years. EBITDA also increased 4.1% to NT$23.52 billion, maintaining a
healthy EBITDA margin of 38.32%.
Turning to our year-to-date performance shown in the final columns, H1 revenue increased
7.8% year-over-year, driven by broad-based growth across ICT, mobile sales, and core telecom
services. Operating income rose 5.2% to NT$26.36 billion, net income grew 3.9% to NT$20.75
billion, and EPS reached NT$2.68, up from NT$2.57 last year. EBITDA expanded 3.8% to
NT$46.82 billion, underscoring our recurring cash flow strength. Overall, these balanced
results give us strong confidence in achieving our full-year targets.
Balance Sheet Highlights
Please turn to Slide 13 for an overview of our balance sheet position. Total assets increased by
3.3% year-to-date, primarily driven by current assets. This was mainly due to growth in cash,
time deposits, NCDs, and inventories, reflecting higher investments in ongoing ICT projects.
On the liabilities side, total liabilities rose 27.1% compared to year-end 2025, largely driven
by the seasonal recognition of dividends payable. As of June 30th, 2026, our reported debt ratio
stood at 31.0%. Excluding dividends payable, our adjusted debt ratio improved to 23.72%,
down from 25.21% at year-end 2025.
More importantly, our interest-bearing debt ratio remains very low at approximately 5%,
reflecting minimal financial leverage and prudent balance sheet management. Our core
financial health remains robust, with a current ratio of 122.3% and a net debt-to-EBITDA ratio
standing at zero, underscoring our solid financial position.
Cash Flow Summary
Moving to Slide 14 for our Cash Flow Summary for the first half of 2026.
Net cash provided by operating activities remained healthy over the six-month period. Working
capital was mainly impacted by higher inventory spending for ongoing ICT projects, but this
was largely offset by strong cash inflows from contract liabilities and lower payables outflows.
On the investment side, first-half total CapEx was NT$9.85 billion, down 14.3% year-overyear. Mobile CapEx declined 9.0%, reflecting the normalization of investment following the
peak phase of 5G network deployment, while non-mobile CapEx decreased 16.3%, primarily
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due to a higher comparison base last year. We expect a greater portion of our CapEx to be
deployed in the second half of the year.
As a result, our six-month free cash flow reached NT$21.89 billion. Our overall cash position
improved year-over-year and remains very solid, continuing to comfortably support both
ongoing business expansion and shareholder returns.
Operating Results vs. Forecasts
Turning to Slide 15 for our performance relative to guidance. As our president noted at the
beginning of our call, we delivered outstanding second-quarter results, with top-line revenue
exceeding our expectations. This outperformance was supported by continued ICT momentum,
steady core telecom growth, and stronger-than-expected product sales.
Importantly, revenue growth outpaced operating expense growth, reflecting solid operating
leverage and cost discipline. Although project-related costs grew alongside higher ICT revenue
recognition, total expenses remained well within target. Consequently, all key profitability
metrics—operating income, net income, EPS, and EBITDA—came in above the high end of
our guidance.
That concludes my financial overview. Thank you for your time, and I will now hand the call
back to the operator for Q&A.
Q1：Charlie Bai, HSBC
Hello, management. Congratulations on this very strong result. I saw spectacular growth
in the international sector. May I know more about the long-term guidance and visibility
in this segment? Because I know that some could be project based, and how do we see
the long-term demand? And would you mind breaking down for different regions such as
US, Southeast Asia, et cetera? Thank you very much.
CHT (Audrey Wen-Hsin Hsu)：Thank you very much for your question. I guess the
question is you want to look at the outlook for the international sector and long-term
guidance and visibility in the segment. So, as we see the global trend of AI development,
we continue to see growing interest from international customers, particularly in AI
infrastructure, international connectivity, and data center service in the US and in
Southeast Asia. So, while our primary market remains Taiwan, we believe that this AI
expansion across Taiwan, US and Southeast Asia has continued aligned with the AI
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development growth. Is there anything that you will need to add on for this issue?
Charlie Bai, HSBC：Yeah, maybe more color on the project type. Are they mostly AI data
center build-out or any kind of more color is really appreciated.
CHT (Angela Cho-Fen Tsai)：Maybe I can give you some information. As projects we
acquired, we see in the United States market, we are so far, just like Audrey said we see
a lot of opportunities related to the AI supply chain, right? And for the opportunities, I
think in this year or next two to three years, the opportunities is like several billion dollars
– NT dollars, several billion NT dollars.
Charlie Bai, HSBC：Okay. Got you. Thank you very much.
Q2：Ranjan Sharma, JPM
Hi. Good evening, management. Thank you for the presentation and the opportunity. I
have three questions. Firstly, on the AIDC, what is the required investment to build-out
the 36 megawatts of the data center capacity? And what is your projected IRR? The
second question is on IOWN. You talk about expanding investments. Can you help us
understand what you're doing? Here what is the required investment? And what is the
impact that you see on your financial outlook going forward? The last question is, if you
can remind us on the Enterprise ICT side, there seems to be a lot of volatility in the
revenues from one quarter to another quarter. What is – if you can help us understand the
drivers of that? Thank you.?
CHT (Audrey Wen-Hsin Hsu)：Hi, Ranjan. Thank you very much for the issue about
AIDC. For the question about AIDC that as we mentioned earlier like our Lunping AIDC
and Taichung AIDC are under construction to provide AIDC service for our confirmed
customers. And while you are interested in this IRR, we don't usually disclose the
expected IRR for individual projects. However, just to give you some idea that regarding
the Taiwan's IDC market, we would like to highlight our leading position. On a group
basis, combining the capacity of Chunghwa Telecom and our subsidiary, Chip Telecom,
our IDC market share in Taiwan reached 78% as of the second quarter, maintaining our
position as the market leader. I think this information may give you some idea about the
value of the ICT share in Taiwan. And, another point is that while we don't disclose the
detailed IRR for individual projects, our each investment is subject to our very disciplined
capital allocation framework and investment evaluation. So, we only proceed with
projects that meet our financial and strategic return requirement, and can create long-term
shareholder value, then we will conduct the project. So, I hope this is helpful for your
question about the first question.
Ranjan Sharma, JPM：Yes. Thank you. Can you help us with the amount of investment
required to build-out 36 megawatts of capacity
CHT (Angela Cho-Fen Tsai)：Well, actually, for the Lunping AIDC, we said that when
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we'd build-out, we completed the build-out, the maximum, it could provide is this 36
megawatt. But the AIDC is built by phases. So, our investments injected is by basis, yeah.
But we don't disclose the total capital we invest for the Lunping AIDC. Yeah.
In terms of your last question is about the ICT volatility, the ICT revenue, right? But –
actually, we foresee that for this year, the ICT revenue, the volatility is the pattern – the
pattern is similar to the previous year, and we are quite confident to beat our ICT revenue
target for this year. Yeah.
Ranjan Sharma, JPM：Can you help us understand the investment that you're making in
IOWN? How much capital that you're deploying there and how does that impact your
business outlook going forward?
CHT (Angela Cho-Fen Tsai)：Okay. Actually, we see that IOWN ecosystem is quite
important in the AI era because, we – in our plan we want to connect our AIDC, the
distributed AIDC at home and abroad through the IOWN network, connect with the
IOWN network. But this is still in the early stage that we invest in building up this kind
of network. So, in terms of revenue, I think it still takes time to gain the real revenue from
IOWN network. Yeah
CHT (Audrey Wen-Hsin Hsu)：To add on, some – I think nowadays in semiconductor,
the – all photonics issue is becoming a key driver for the next generation of the data center.
I think IOWN is quite important for the next generation data center. So, we believe that
this kind of the – at this moment this can help us to build our competitive advantage, given
that as I just mentioned that AIDC we are the major player which takes up almost reaching
80% of the market share in Taiwan. And we believe that and given that so many customers
in Taiwan have the position across the Asia-Pacific, so IOWN is – we view IOWN has
both technology and business initiative. So while this ecosystem development takes time,
we believe it provides the important foundation for future AI-related service and next
generation network capabilities.
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