Asia PR News

TAIPEI, Aug. 31 /Xinhua-PRNewswire-AsiaNet/ –

Chunghwa Telecom Co., Ltd (TAIEX: 2412; NYSE: CHT) ("Chunghwa" or "the
Company"), today reported revenues for the half year ending June 30 of NT$90.7
billion, net income of NT$24.9 billion and fully-diluted earnings per common
share (EPS) of NT$2.58, or US$ 0.81 per ADS. The Company also reported
earnings for the second quarter of 2005 with revenues of NT$46.2 billion, net
income of NT$12.8 billion and earnings per share (EPS) of NT$ 1.33, or US$ 0.42
per ADS. All figures were prepared in accordance with US GAAP.

Revenues and Costs
For the first half of 2005, total revenues decreased by 1.3%
year-over-year. Of the revenues from individual business segments, 36.8% was
from fixed-line services, 39.3% was from wireless services and 22.5% was from
Internet and data services, with the remainder from other business lines. Of
the individual segments, mobile revenues increased by 2.7% while Internet and
Data increased by 2.2%. Revenues from Local services decreased by 7.3%, due
mainly to the decrease in dial-up minutes and mobile substitution. Revenues
from DLD services decreased by 8.0% mainly due to mobile substitution. ILD
revenue decreased by 5.3% due to the decline in average usage fee resulting
from severe competition, however, the increase of the wholesale revenue
partially offset the decline of the retail revenue. Overall, fixed line
revenue decreased by 7.0% year-over-year.

For the first half 2005, operating costs and expenses increased by 1.5%
year-over-year. This was mainly due to an increase in handset subsidies of
NT$400 million and an increase in marketing expenses for the mobile business of
NT$254 million. Pension expense also contributed NT$383 million to the
increase, owing to changes in actuarial assumptions.

Total revenue for the second quarter 2005 was NT$46.2bn, a 3.6% increase
quarter-over-quarter. Of this, 36.5% was from fixed-line services, 39.5% was
from wireless services and 22.3% was from Internet and data services, with the
remainder from others.

Total operating costs and expenses for the second quarter of 2005 were
NT$31.8bn, a 5.3% increase quarter-over-quarter. This was primarily due to
increase in maintenance expenses, increased marketing expenses for the mobile
business, and handset subsidies.

Businesses Performance Highlights

Internet and Data Services
— Internet and data revenue for first half 2005 increased by 2.2%
year-over-year to approximately NT$20.4bn. Internet and data
revenue in the second quarter of 2005 was NT$10.3bn, a 2.3 %
increase quarter-over-quarter.
— The total number of internet subscribers was nearly 3.96mn as of Jun.
30, 2005, a 7.1% increase year-over-year. In the second quarter of
2005, Chunghwa added 91,000 new subscribers.
— ADSL subscribers totaled 3.36mn as of Jun. 30, 2005, a 23.3% increase
year-over-year. ADSL subscriber growth has continued and Chunghwa
added 160,000 subscribers in the second quarter of 2005.

Mobile Service
— Mobile revenue for the first half of 2005 increased by 2.7%
year-over-year to NT$35.6bn. For the second quarter of 2005, mobile
revenue increased by 4.6%.
— At the end of June 2005, mobile subscribers remained at 8.1mn. The
company has continued to clean up inactive prepaid subscribers to
increase the quality of total subscribers.
— Chunghwa continues to be the leading mobile operator in Taiwan in terms
of both revenue and subscriber market share with 35.2% and 39.3%
respectively as of the end of June 2005.

Fixed Line Services
— Total fixed line revenues for the first half of 2005 declined by 7.0%
to NT$33.4bn, due mainly to fixed line competition, mobile substitution
and continuous migration of dial-up subscribers to ADSL broadband
services. Fixed-line revenue for the second quarter of 2005 was
NT$16.8bn, an increase of 1.7% quarter-over-quarter.
— Chunghwa’s total fixed line subscriber base stood at approximately
13.3mn as of Jun. 30, 2005, an increase of 0.6% year-over-year.

In addition to the solid performance, Chunghwa Telecom became a private
company after the overwhelmingly successful ADR placement and the concurrent
domestic offering. Currently, MOTC is still the major shareholder of the
Company, owning 43.88% of the shares, while QFII and employees own 37.95% and
5.15% of the shares, respectively. The Company also announced that the payment
date of dividend reflecting the operating results of year 2004 for ADR
shareholders will be on September 12th.

Financial Statements
Financial statements and additional operational data can be found on our
website at www.cht.com.tw/ir/filedownload .

About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412; NYSE: CHT) is the leading telecom service
provider in Taiwan. Chunghwa Telecom provides fixed line, mobile and Internet
and data services to residential and business customers in Taiwan.

Note Concerning Forward-looking Statements
Except for statements in respect of historical matters, the statements made
in this press conference contain "forward-looking statements" within the
meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of
the U.S. Securities Exchange Act of 1934. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual performance, financial condition or results of operations of
Chunghwa Telecom to be materially different from what may be implied by such
forward-looking statements. Investors are cautioned that actual events and
results could differ materially from those statements as a result of a number
of factors including, among other things: extensive regulation of telecom
industry; the intensely competitive telecom industry; our relationship with our
labor union; general economic and political conditions, including those related
to the telecom industry; possible disruptions in commercial activities caused
by natural and human induced events and disasters, including terrorist
activity, armed conflict and highly contagious diseases, such as SARS; and
those risks identified in the section entitled "Risk Factors" in Chunghwa
Telecom’s Form F-3 filed with the U.S. Securities and Exchange Commission in
connection with our U.S. secondary offering.

The financial statements included in this press conference were unaudited,
and prepared and published in accordance with U.S. GAAP. Chunghwa Telecom also
prepared certain financial statements for the same periods discussed in this
press conference under ROC GAAP. Investors are cautioned that there are many
differences between ROC GAAP and U.S. GAAP. As a result, our results under
U.S. GAAP and ROC GAAP may in many events be substantially different.

The forward-looking statements in this press conference reflect the current
belief of Chunghwa Telecom as of the date of this press conference and we
undertake no obligation to update these forward-looking statements for events
or circumstances that occur subsequent to such date.

For inquiries:

Fufu Shen
Investor Relations
Tel: +886-2-2344-5488
Email: chtir@cht.com.tw

SOURCE: Chunghwa Telecom Co., Ltd