Good afternoon, ladies and gentlemen, welcome to the Chunghwa Telecom Conference Call for the Company’s Fourth Quarter 2013 Operating Results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, directions for submitting your questions will be given in the question-and-answer session. For your information, this conference call is now being broadcasted live over the internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website, www.cht.com.tw/ir under the IR Calendar section. Now I would like to turn it over to Fu-fu Shen, the Director of Investor Relations. Thank you. Ms. Shen, please go ahead.

Thank you. This is Fu-fu Shen, Director of Investor Relations for Chunghwa Telecom. Welcome to our fourth quarter 2013 earnings results conference call. Joining me on the call today are, Dr. Tsai, Chunghwa’s newly appointed Chairman; Mr. Shih, President; and Dr. Yeh, CFO. During today’s call, management will first discuss business, operational and the financial highlights. Then we will move on to the Q&A session. On Slide #2, please note our Safe Harbor statements. Now, I would like to turn the call over to Chairman, Tsai.

Thank you, Fu-fu. Hello, everyone. This is Rick Tsai. Thank you all for joining our fourth quarter 2013 earnings results conference call. Before Mr. Shih leads you through the business overview, I would like to thank the company, its board of directors and investors for the confidence and support in having me to serve Chunghwa Telecom as its chairman. It’s an honor to have the opportunity to work at Taiwan’s leading telecom company during this declining time in the telecom industry. I look forward to serving as the chairman of Chunghwa Telecom, as the company helps to assuring the new era of telecommunication capabilities in Taiwan and globally. Now Mr. Shih would like to lead you through the business overview. Thank you.

Thank you, Chairman Tsai. We are glad to report to you that we ended 2013 on a high note with strong operational results. We outperformed our competitors in growing our mobile business, and successfully upgraded customers to a higher speed of fiber broadband services across our network. Heading into 2014, our forecast is on the seamless rollout of 4G services in the second half of the year, for which we have already procured the first batch of 4G equipment in December of last year. Not only do we aim to be the first 4G operator, but we are also determined to provide the highest quality services available. In terms of our broadband services, since our broadband household penetration rate is already very high, we continue to focus on the customer retention and the migration to higher speed of services. In addition, we recently announced a convergence plan combining broadband with MOD family packages. We believe this initiative will further stimulate fiber migration and MOD subscription growth. In addition, we would be launching even higher speed of services such as 300 megabit per second in order to maintain our technological deep in the market leading position. Moving onto Slide 4, regarding our first quarter operation results. We are proud to say that we continue to outperform our competitors in attracting mobile internet subscribers. At the end of 2013, our mobile internet subscriber market share reached 34.8%, which once again was the highest among our peers. We will continue to support this growth momentum and the market leadership by further strengthening our cutting edge and robust infrastructure to support ever increasing growth in mobile data usage. Slide 5 provides an update on our mobile business. During the fourth quarter, mobile internet subscriber grew by over 58.8% year-over-year to 3.94 million. Our mobile…

Thank you for the kind words, President Shih, and good day everyone. I appreciate the opportunity to have served Chunghwa through these amazing times. I am very thankful and fortunate to have worked with so many talented executives and investors over the years. Thank you for all your contribution. Moving onto the financial. I will review of financial results in detail, beginning on Slide 13. On Slide 13 are our income statement highlights. Total revenue for the fourth quarter grew by 4.6%, and operating costs and expenses increased by 6.1% year-over-year. Our income from operations and the net income increased by 2.2% and 3.4% respectively. In addition, the EBITDA margin decreased from 34.12% to 32.75% in the fourth quarter as compared to the same period in 2012. Please refer to Slide 14 for an update on our business segment revenue. The total revenue increase in the fourth quarter of 2013 was driven by 39.4% year-over-year growth in mobile VAS revenue, a 21.9% growth in handset sales, including Senao’s open channel sales and an increase in ICT revenue. The strong growth of mobile VAS revenue was mainly driven by an increase in mobile internet subscribers. Local voice and DLD revenue decreased by 6.1% and 4.8% respectively, mainly due to mobile and the VoIP substitution. Broadband revenue was flat year-over-year. Mobile voice revenues decreased by 8.4% due to tariff reduction, VoIP substation and the promotional package. Moving on Slide 15, you can see that our operating costs and expenses increased by 6.1% year-over-year. The increase in operating costs was mainly due to the rising cost of handsets sold, resulting from higher handset sales, and increase in personnel expenses for Senao’s channel expansion and the higher ICT project costs. As shown on Slide 16, cash flow from operating activity increased to NT$30 billion…

We would now being our question-and-answer session. (Operator Instructions) Thank you. Our first question is coming from Peter Milliken, Deutsche Bank. Go ahead please. Peter Milliken – Deutsche Bank: Yes. Good afternoon, everybody. Thanks for the call, and congratulations on ending the year well. I would just like to address a question to Mr. Tsai, welcome to Chunghwa Telecom. I’d be interested to know if you have any goals or any particular management style that we might see go into Chunghwa Telecom in the years ahead.

Can you repeat your question again? I have missed part of it, sorry. Peter Milliken – Deutsche Bank: Yes. I was asking if you had any particular management style or any particular goals that you might bring to Chunghwa Telecom in the coming years.

I see. Well, maybe I should start with here my goal. As you know I was elected Chairman of the company yesterday afternoon. I have done some homework with the management team here during the last couple of weeks, but I cannot say I have really an in-depth understanding of the company business line strategy. I have a pretty good idea but not in-depth yet. So I need some time to formulate my strategy – our strategy I should say. However, I am convinced that Chunghwa Telecom is a very capable company with lot of talents, with a lot of resources. As now, my goal together with our management team going forward is really to take Chunghwa Telecom on a growth path in the next few years to come. It is not an easy goal as most of you understand that lot of the telecom revenues continue to decline year-over-year. So that which means we have to find growth opportunities to compensate and to bring growth in our future business, but I think our team is determined that we want to go on a growth path and my commitment is to work with our team to find ways to grow our business. As to my management style, it’s difficult for me to describe my own style, so I think the question is probably better answered by some of the people who have worked with me or work under me or who managed me in my prior life. Thank you. Peter Milliken – Deutsche Bank: Okay, thank you very much for that. And just one more general question for the team that is, that we saw mobile voice revenue being under pressure in the fourth quarter. Is that something – should we continue to see that continue to come under increased pressure ahead or do you think we’re at a most stable level – at a lower but more stable level of voice revenues at this point?

Yes. As you can see in the last quarter or last year, the local voice and the DLD voice as well as mobile voice has declined 6% to 8%. And we believe this trend will continue at this moment. So we take that into consideration in our guidance for this year. Thank you. Peter Milliken – Deutsche Bank: Okay. Thank you very much.

Next question is from Michelle Wei, JP Morgan Hong Kong. Go ahead please. Michelle Wei – JP Morgan: I have few questions. My first question is on 4G network rollout. So how many base stations in total do you think Chunghwa Telecom will need to deploy to have good nationwide coverage of 4G, and also what’s the timetable for that? In terms of CapEx, what do you think the trend is going to look like in the next few years? That’s my first question. Thanks.

Yes. For the LTE, we launched the 1,800 megahertz band. So we estimate within three years, we will construct around 7,000 to 10,000 base stations to give more than 90% of the population coverage. Michelle Wei – JP Morgan: Okay. So do you think this year is going to be the peak CapEx year?

Can you repeat again? Michelle Wei – JP Morgan: I guess when you look at CapEx, is this year going to be the peak? Is CapEx going to – will gradually decline starting from next year?

Michelle, could you just move away a little bit in front of microphone because there is a little bit noise here. Michelle Wei – JP Morgan: Okay.

The CapEx for this year, 2014 will be the peak. Next year we are gradually decreased to a normal level because this year we have 3G, 4G deployment. So this year will be the peak. Michelle Wei – JP Morgan: Okay.

Around 40 billion, yes. Michelle Wei – JP Morgan: Thanks. My second question is about dividends. Earnings dropped 2% last year and according to your guidance the decline will accelerate this year. So just wondering if you are considering increasing the payout ratio a little bit more to at least keep the EPS flat?

In terms of dividend policy, it will be decided by the board. At this moment, we don’t really have detailed information to provide. But however this year there are more factors to be considered by the board. For example, the adoption of IFRS which decreased our retained earning – beginning retained earnings as the pension obligation of employee upon privatization. The number is like NT$18.4 billion. So if we like to maintain similar level of regular dividend payout ratio, we need to distribute special dividend from additional paid-in capital. That would be one issue. Another issue, as you can say, our cash balance has reduced substantially because of the 4G license payments. And also this won’t affect our financial soundness or stability, but however there are some – those changes we will bring to the attention of the board for consideration. But on the other hand, we also understand the importance of our stable dividend policy to the shareholder. We also – we pull these issues to the board members. Thank you. Michelle Wei – JP Morgan: Okay, thanks. My last question is on pricing – on your 4G pricing strategy. We know NCC supports tier pricing for 4G, but given the fact that there would be two other 4G players, and that they seem to be quite aggressive on pricing, especially on basing Vibo. According to our conversation with them, they plan to launch 4G service by the end of this year as well, and they have no plan to remove the limit of data price and data plan. So do you think this will make it more difficult for the big three operators to leverage 4G service launch to move to tier pricing?

Yes. We still have not finalized our data package plan, but basic principle is we want to increase so-called the fair usage policy with tier pricing. We will have a full management to the use of data because 4G is coming, so the download speed will be increased a lot. So there needs to be some changes on the current 3G data package. So we are trying to do good tariff package based on the fair usage policy and tier pricing. Michelle Wei – JP Morgan: Okay, thank you very much.

We are now in question-and-answer session. (Operator Instructions) Thank you. Next question is coming from Gary Yu, Morgan Stanley. Go ahead please. Gary Yu – Morgan Stanley: Hi, thank you for the opportunity to ask the question. This is Gary Yu from Morgan Stanley. I just have one question from my side. Given that you have paid a higher amount on the spectrum compared to your peers, is it fair to assume that you would probably want to target the larger market share in 4G compared to 3G, otherwise if you put more and get similar amount of market share. Would it be worse off of a scenario for Chunghwa Telecom? Thank you.

Yes, because we have 35 megahertz total and also have 15 megahertz at the C5, which is 1,800 megahertz bandwidth. It’s up for more than 100 megabit per second speed. We are very confident that we are – we will be at much, much higher speed than other competitors. So we will acquire not only our current 3G subscribers to LTE but also acquire some high end users from our competitors. Presently our mobile internet subscribers are around 34%. So we expect we would get – acquire more subscribers from our competitors. So we expect that we can increase our market share. Gary Yu – Morgan Stanley: Okay. And a follow-up question to that is, could you share with us your strategy in terms of gaining market share from your competitors? Would it be more on pricing, or would it be more on coverage or handset availability? And is there any target market share that you want to achieve compared to the current 34% share you have on mobile internet? Thanks.

We expect this year, we will increase 1.1 million newly subscriber for the data mobile internet. So it will reach more than five million subscribers totally. So we are very confident that Chunghwa has a very good 2G coverage. So offer very nice coverage of voice even in the remote area including the mountain area and over sea level. So we not only – the reason is that LTE cannot full coverage at the early stage, so it still needs to fall back to 3G. So we are in a very good position over high speed in the six big cities in early stage, but also we can offer 3G in case the 4G LTE is not available. So we offer the total packages not only for 4G but also 3G and 2G. Thank you. Gary Yu – Morgan Stanley: Okay, thank you very much.

As a reminder, we are now in question-and-answer session. (Operator Instructions) Thank you. If there are no further questions, I would turn it back over to Chairman, Tsai. Go ahead please.

Thank you for spending the time with us. We wish you all a happy Chinese New Year. Thank you.

Thank you, Chairman Tsai. And thank you for your participation in Chunghwa Telecom’s conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw/ir under the IR Calendar section. You may disconnect now. Goodbye.