Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom Conference Call for the company's First Quarter 2019 Operating Results. [Operator Instructions]. For your information, this conference call is now being broadcasted live over the Internet. The 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 Ms. Fu-Fu Shen, the Director of Investor Relations. Ms. Shen, please go ahead.

Thank you. This is Fufu Shen, the Assistant Vice President for Chunghwa Telecom. Welcome to our first quarter 2019 results conference call. Joining me on the call today are Mr. Sheih, our new Chairman and CEO who assumed the positions on April 22nd last week, and Mr. Kuo, our Chief Financial Officer. Mr. Sheih will remain President until a successor has been identified. During today's call, management will begin by providing an overview of our business during the quarter followed by a discussion of operational and financial highlights, and then we will move on to the Q&A session. Now I would like to hand the call over to Chairman, Sheih, and please note our Safe Harbor statement on Slide 2. Chairman, please.

Thank you, Fu-Fu, and hello, everyone. Welcome to our first quarter 2019 earnings results call. During the quarter, the overall market remained competitive, our peers and smaller players took turn to rollout low price, unlimited mobile data plans to acquire more customers. However, we continue to anticipate mobile pricing steps validation with our quality mobile network. In this quarter, we continue to hold leading market position by both mobile revenue and subscriber shares. In fact, our revenue share increased slightly, and other subscribers share remain the same. We also continue migrating mobile customers to bundle our higher price plans for incremental ARPU in order to mitigate the down sale that happened in 2018. In our broadband business, we are pleased with the steady migration of our broadband subscribers to higher speed services. Due to market competition and mobile substitution, during the quarter, we experienced a small subscriber loss, however, our MOD subscribers continue to increase and they reached to 2.05 million in the first quarter of 2019. We - disclose to our successful strategy of satisfying customer demand with popular content could include OTT services, like Netflix. In addition, in January, our regulator NCC allow us to package MOD channels freely to fulfill our diversified user demands. We believe that this freedom gives us a more favorable market environment in which to operate and to further grow our MOD business. We are also delighted to see that our ICT revenue increased year-over-year. We continue to strengthen our call capability in selected areas to provide a more focused ICT related solutions. We will also streamline our ICT product platform for better positioning and competitive pricing, the upcoming 5G service launch and potential regulatory changes mentioned competitive landscape. As a result, we roll out a customer centric value creating transformation plan this…

Thank you, President - I am sorry - thank you, Chairman. Now I will go through our financial results in details. Beginning on Slide 10. Please note that all comparisons are made on year-over-year basis unless otherwise stated. Slide 10 provides you with highlights from our income statement. For the first quarter of 2019, total revenues decreased by 4.3% and the operating costs and the expenses decreased by 4.0%. Our income from operations decreased by 5.0% and our net income decreased by 4.3%. Our EBITDA margin increased to 37.3% in the first quarter from 35.3% in the same period of 2018, primarily due to the adoption of IFRS 16 in 2019. Please refer to Slide 11 for revenue breakdown by business segments. The decrease in total revenue for the first quarter 2019 was mainly due to the decrease in mobile service revenue and the handset sales revenue, which offset the increase of internet revenue. The decrease of mobile service revenue was net, primarily because of market competition in the Voice Over IP substitution. Moving on to Slide 12. Our operating costs and expenses decreased by T$1.7 billion over 4.0%, mainly due to our cost of goods sold. Slide 13 shows the cash flow from operating activities. For the first quarter of 2019, increased by T$5.9 billion over 50.6%. This was mainly due to a legal requirement to make a cash contribution to the pension fund. There was also a decrease of inventory year-over-year. This is of March 31, 2019, it has T$37.6 billion of cash and the cash equivalents. Slide 14 shows our operating results compared to our guidance. In the first quarter of 2019. Revenue was lower than our first quarter guidance many to low handset sales and mobile service revenue. However, our results of operating income, middle income…

[Operator Instructions] Our first question is coming from Neale Anderson from HSBC. Go ahead, please.

Thank you. I have two questions, please. The first one on the mobile performance, as you point out on the slide five, the percentage trend is spent in your peers. What do you think that is, please? What's your view on the reason? And secondly on IPTV. So, this is growing steadily, you able to give any idea in terms of margin, or the currently or where you'd expect that to be in a couple of years' time? Thank you.

For the IPTV, currently you know we feel this business is still not ready even not yet. But for the first quarter this year, we really see the breakeven in of situation. We see you have to monitor the market for the rest of the month - rest of the year to see if we can reach. But we internally, we accept no. Product, we will take like for the whole year kind of breakeven should be a bid of like one or two years later, they'll be more likely, but we monitor, we'll see what happens for the rest of the year. For the first question, you mentioned about the mobile performance. The reason for the - the reason why we are - we have the least effective kind of revenue impact among the community is this - is this your question?

First question, yeah. Thank you.

Okay. So I think you know, like we always mention about you know, for sure, we always, you know, like, you see if you look at the market in our prediction for our, you know, subscribers here versus you know, revenue share, we always you know, have a bit of higher revenue share, which means, you know, we are more cautious about, you know, the customer contribution, we operate this business.

I don't quite understand, more cautious because you have large revenue share?

Actually know we always would like to know we are predictable you know for - you understand competitive you know landscape the mobile market, our team is included smaller players they always like to you know low price you know plan to acquire customers. We would like to find a balance of this you know. We were of course on Wi-Fi we will compete in the market for subscribers, but at the same time, you know, we would like to retain our existing you know, high contribution customers and we offer you know, kind of a package you know, for the benefit for the VIP or general the regular customers to reach in you know high level kind of approved, try to mitigate the overall you know, market competition.

Okay, thank you very much.

Thank you. Our next question is coming from Peter Milliken, Deutsche Bank. Go ahead, please.

Yes, good afternoon. Thanks for the call. Look my question is on the Telecommunications Draft Act. Two questions. One is, do you think that far eastern and Taiwan mobile would also be considered dominance, given that they have almost as much mobiles here as well? And secondly, what do you think is the government goal here, is it to make, is it to give them more flexibility to the number 4 and 5 operators to build a network out as if it's kind of more economically efficient? Thank you.

Basically, you know, you have to understand, you know, MCC will always like to increase the competition. I think that's the idea, okay. So, mentioned above you know, the more economic efficiency for the smaller players. I think we have to understand you know the regulator's marks yet. That's the answer for the second question. For the minimum, for 4G, I would say that, you know, number of the operator right now is dominant player, according to NCC. So, yeah, that's it.

Got it. Thank you very much.

Thank you. [Operator Instructions] The next question is coming from Jack Hsu, Sinopac Security. Go ahead, please.

Thank you. Thanks for giving me the chance to ask questions. I have two questions. My first question is, could you - we talk more about the next commercial debt, [indiscernible]. The contribution of the cash in the future? And my second question is about the target of MOD subscribers in the 2019 and how will we do in throughout '19, we do very well. We're doing very well in this project in 2018, how well we do in the 2019? Thank you.

About the question of our web, our internet only depend consortium started to operate in October last year, while four major strategic shareholders from financial industries and logistics industries were all in place. Currently we continue to own a province and preparing for the license billing, which is expected to finished by mid-July 2019. Our board approved and can on January 29 that we will invest 4.5 billion and also to acquire more than 40% of the shares of the next depending on the final shareholder composition and expect to be the largest shareholder to actively lead the team or license bidding. We aim to leverage our telecom Big Data Analysis capability, information security advantages and a FinTech patients to team up with partners to develop digital, financial innovative business to increase Telco's value as well as increased customer stickiness and they increase revenue by offering smart digital financial services. We estimate the only bank may not break even, but will be profitable once its scale is large enough that we expect the long term return of the investment is positive. And the productive value contribution of cash and cash flow information will not be disclosed right now. Sorry.

As for the MOD subscriber target, in 2019, we put 2.2 million. And I think we would continue doing well in this year. Thank you.

Thank you.

Thank you. [Operator Instructions] There are no further questions, I will turn it back over to Chairman, Sheih. Go ahead, please.

Thank you for your participation. See you next time.

Thank you Chairman, Sheih. Thank you for your participation in Chunghwa conference. There will be a webcast replay within one hour. Please visit www.cht.com./ir/ under the IR calendar reception. You may now disconnect. Goodbye.