TAIPEI, Taiwan, R.O.C. January 24, 2017 - Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) (“Chunghwa” or “the Company”) today reported its guidance for 2017 on a consolidated basis. All figures were prepared in accordance with Taiwan-International Financial Reporting Standards (“T-IFRSs”).

Mr. Yu Cheng, Chairman and CEO of Chunghwa Telecom stated,

“We continued to experience stable financial and operating results for the full year of 2016. Looking at 2017, although we expect to continue facing intense competition, we are confident in maintaining our market leadership in all major business lines and further foster innovative service offerings for both retail and enterprise customers. For the full year 2017, we expect total revenues to increase year over year. For our mobile business, we will continue to streamline and optimize our marketing activities as well as reinforce subscriber retention. For our broadband business, by leveraging our big data analysis capability and offering diversified digital convergence services, we can further enhance our users’ experience and stickiness. Meanwhile, we see great opportunities for our ICT business in 2017 with the growing ubiquity of IoT and aim to boost its development by capitalizing on our market superiority in integrated network infrastructure, IDC and CDN capabilities. By leveraging the government’s digital content economy development policy and relaxation of relevant regulations, we will continue enrich diversified digital content as well as enhance our MOD platform functionality. As we execute upon our marketing and business development strategies during 2017, we remain committed in realizing continued growth and value for our stakeholders going forward.”

For 2017, the Company expects total revenue to increase by NT$1.15 billion, or 0.5%, to NT$231.16 billion as compared to the un-audited consolidated revenue of 2016. The increase in revenue is expected to be mainly driven by the expansion of mobile value added service, smart device sales, and enterprise ICT business. Although voice revenue will decline in 2017 due to VoIP substitution and market competition, the Company is confident that it will be offset by the revenue contribution from its abovementioned growth businesses.

Operating costs and expenses for 2017 are expected to increase by NT$5.00 billion, or 2.8%, to NT$186.46 billion as compared to the prior year. The increase is mainly attributable to the expansion of ICT projects, mobile Internet services, value-added services and smart device sales. Expenses associated with the enhancement of digital content and 4G license amortization expenses are also expected to increase.

Income from operations is expected to decrease by NT$ 3.40 billion, or 7.1%, year over year. Non-operating income is expected to decrease by NT$0.25 billion year over year, mainly due to the decline in interest income and other income. Income before income tax and net income attributable to stockholders of the parent are expected to be NT$45.69 billion and NT$36.89 billion, respectively, representing decrease of NT$3.65 billion and NT$3.14 billion, respectively. Net earnings per share for 2017 is expected to decrease by NT$0.41 to NT$4.75, as compared to the prior year.

Capex for acquisition of property, plant and equipment in 2017, including deferred projects from 2016, is expected to increase by NT$6.80 billion to NT$30.28 billion as compared to the prior year. The Company will focus on the enhancement of fiber broadband network construction as well as the expansion of mobile network.

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