Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company's fourth quarter 2022 operating results. [Operator Instructions]. 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. And now I would like to turn it over to Ms. Angela Tsai, the Director of Investor Relations. Ms. Tsai, please go ahead.

Thank you. This is Angela Tsai, Director of Investor Relations for Chunghwa Telecom. Welcome to our Fourth Quarter 2022 Results Conference Call. Joining me on the call today are Harrison Kuo, our President; and Vincent Chen, our Chief Financial Officer. During today's call, management will begin by providing an overview of our business in the fourth quarter, followed by a discussion of our segment performance and the financial highlights. After, we will move on to the question-and-answer portion of the call. I'd like to please note our safe harbor statements. Now I will turn the call over to President, Kuo. President, Kuo, please go ahead.

Thank you, Angela, and hello, everyone. Welcome to our Fourth Quarter Results Conference Call. To begin, we would like to send our best wishes to our peers as their merger plans were approved by the NCC in January. We believe the resulting change of the market landscape is positive to the telecom industry in Taiwan as the health of the market development for the strength and the overall 5G adoption in Taiwan could consistently maintain its stable growth. Under the new landscape, we will continue our focus on building ecosystems and creating long-term value for customers. As the market leader in terms of network quality, service quality and the subscriber number in Taiwan, we are confident in remaining ahead of our peers in all these aspects going forward. Now let's turn to Page 4 for an update on our performance in the fourth quarter. In the fourth quarter, our mobile revenue share and subscriber share climbed to 39.5% and 36.6%, respectively, achieving another solid period of growth on both year-over-year and quarter-over-quarter basis. In addition, the year-over-year increase of both revenue share and subscriber share also progressed in the consecutive quarter, affirming our strong leading positions in Taiwan's mobile markets, subtend by our notable growth momentum. Please turn to Slide 5 for a closer look and our mobile business. In the fourth quarter, our total mobile service revenue was up by 5.8% year-over-year, maintaining its year-over-year growth for 20 consecutive months, attributable to the upsale resulting from 5G migration and outperforming subscriber number increase. As of penetrations progressed, we absorbed an average 41% uplift in mobile monthly fees, attributable to consumers who migrate from 4G to 5G. In addition, we are delighted to see the increase of roaming revenue and the prepaid revenue during the quarter. The mobilized cross-border activities…

Thank you, President, Kuo. Good afternoon, everyone. I will now walk you through our fourth quarter financial results. Let's start with Slide 14, income statement highlights. For the fourth quarter of 2022, while revenue generated from our core business increased by 2.3%, total revenue decreased by 0.7% on a year-over-year basis, mainly attributable to decreased sales revenues resulting from the shortage of handsets. Net income decreased by 2.2%, primarily due to sales decline and the grant of government subsidy for the acceleration of 5G deployments in Q4 of 2021. Meanwhile, our EBITDA margin increased to 35.05% from 34.82%. For full year results, we were glad with total revenue increased by 3% compared to 2021, driving by growing core business, including mobile, ICT and broadband services. Income from operations and net income grew by 4.2% and 2.1% on year, respectively, mainly due to our robust core business and growing ICT business. EBITDA margin rose from 39.59% to 39.80%. Now move on to Page 15 for balance sheet highlights. Total assets at the end of 2022 increased by 2.1% on year, mainly driven by the increase in cash and cash equivalents as a result of cash proceeds from issuance of sustainable bonds as well as decreased negotiable certificates of deposits. Total liabilities increased by 6.5%, primarily attributable to increase of bonds payable and revenues and deferred government grant income. Our balance sheet remains strong and that debt ratio stays below 25% and net debt over EBITDA is 0. Page 16 presents the summary of our cash flows. Cash flows from operating activities increased by 1.4% on year mainly due to higher net income arising from our strong operating performance. As for capital expenditure, the amount of mobile and nonmobile CapEx combined decreased by 10.7% on-year, of which mobile-related CapEx was reduced by…

Thank you, Vincent. We have always considered ESG while operating our business, and the next page demonstrates our ESG efforts. Our ESG efforts have been widely recognized by both domestic and international organizations and rating agencies such as Dow Jones S&P Global, Forbes and The Asset. Before I expand our influence, in the fourth quarter, we launched a Green ICT Supply Chain, joining hands with 45 key suppliers to power net zero emissions. We also partnered with KIPP inspired school of Taiwan to reach out to cities that have a relative lack of teaching resources to help facilitate online meaning. We believe these new developments are key to our success and the long-term growth, and we will continue to focus on ESG development going forward. This concludes our prepared remarks. Thank you for your attention. And this time, I would like to open up our conference call for questions.

[Operator Instructions]. And our first question is coming from Neale Anderson of HSBC.

Two questions, please, both on the mobile side of the business. You mentioned that you're pleased with the recovery in roaming and prepaid. Is it possible for you to quantify the contribution that made. And if you expect that to continue to increase through 2023. The second question relates to 5G. Obviously, a large number of customers have now moved to 5G tariffs. So what level of revenue growth do you expect this year on the 5G side? And also, what level of contribution do you expect from some of the new corporate services you mentioned such as the 5G private networks?

Thank you, Neale, for your questions. For the first question about the prepaid, right, so briefly, we don't provide numbers on our prepaid in terms of revenue or subscriber space. But with the total reopenings so it was back to growth in revenue and subscription will grow in prepaid subscribers. And this is quite positive because we have seen there is a huge demand for overseas travels, and we will also grow out the promotion packages to our customers and not only the outgoing but also the incoming travelers. And for your second question about 5G, right? So basically, this year -- sorry, last year, we're very pleased about our performance about our mobile business. So for the -- not only for the revenue -- total revenue growth in mobile business but also uplift from the margin migration. So we don't disclose openly about our internal data, we're still quite optimistic, and we believe in terms of the progress of our 5G penetration rate, actually, the market has been developed in a positive and steady manner, and we believe that will contribute to our revenue modestly.

Got it. Could I just follow up on the roaming side? So I understand you don't disclose the exact numbers. But in the fourth quarter, was it pretty much back to pre-pandemic levels in terms of roaming service revenue?

So it is now going back to the impact -- not yet to pre-pandemic level yet, but we expect we'll recover about like 70%, 80%, yes, for this year. Yes.

[Operator Instructions]. And the next question is from Sara Wang of UBS.

So I have two questions. First is that how is the margin of the enterprise ICT business? And then my second question is that I understand the ICT or enterprise business still requires investment. So we do see increase in OpEx and CapEx in 2023. So any time line or expectations for the ICT business through the earnings quarters or how shall we think about EBITDA and net margin going forward?

Okay. So for the margin for the enterprise business, right? So it's about -- I think it's about 20% or so, yes. So it depends on the individual projects. It's about that level. What's encouraging is actually our ICT margin has gone up last year. And also for the time line for us to provide the margin and EBITDA numbers, right, so we will provide it starting from first quarter next year -- this year, yes, 2023.

Got it. And then the 20% margin is gross margin, right?

Yes, we only provided the net margin, yes, not the income margin, yes, not the gross margin.

I just want to confirm. So the 20% number is net margin for enterprise ICT business?

For the enterprise, right? So the net margin is about 20%. So that's the information we currently disclose for now.

[Operator Instructions]. Next, we'll have Neale Anderson of HSBC for questions.

I had a follow up on the supply chain. I know some of the delays. So you mentioned that the handset revenue was down a little bit due to weaker handset suppliers. And I think some of the CapEx was also deferred into this year. Do you -- is that improving? How much visibility do you have on that? Do you expect to see continued issues this year? Or can you see that improving?

So basically, the supply chain interruption issue has been reviewed recently. But to the extent of whether how soon or to what extent it goes back to the normal level, we are still unsure. So it depends on the situation.

[Operator Instructions]. And if there are no further questions, I will turn it back over to President, Kuo. Please proceed. Thank you.

Thank you for your participation. Goodbye, everyone.

Thank you, President, Kuo, and we 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 now disconnect. Goodbye.