Chunghwa Telecom Soars in Q1 2025: A Digital Transformation Payoff?

Chunghwa Telecom, Taiwan’s largest telecommunications provider, delivered a robust performance in the first quarter of 2025, marking a pivotal moment in its digital transformation strategy. With record financial metrics, expanding ICT services, and strategic investments in next-generation infrastructure, the company is positioning itself as a leader in an increasingly competitive telecom landscape.
Financial Highlights: Growth Amid Transition
Chunghwa’s Q1 2025 results reflect a shift toward high-value services. Revenue reached NT$55.81 billion, a 1.6% increase year-over-year, while operating income surged 5.0% to NT$12.52 billion—both exceeding internal forecasts.

- ICT Businesses: Revenue from cloud, cybersecurity, and AIOT (Artificial Intelligence of Things) services jumped nearly 50% year-over-year, fueled by government projects and smart-building initiatives.
- Fixed Broadband: Subscribers grew 1.4% to 3.75 million, with high-speed 300Mbps+ packages driving revenue up 1.9%.
- Mobile Services: 5G postpaid subscribers increased by 639,000 year-over-year, boosting mobile revenue by 1.9% despite a slight dip in total mobile subscribers.
The company’s net income rose 4.3% to NT$9.80 billion, with EPS hitting NT$1.26—both eight-year highs.
Subscriber Trends: High-Value Growth Masks Market Challenges
While Chunghwa’s total mobile subscriber base dipped 0.9% to 13.11 million—a reflection of market saturation—the focus on premium services is paying off:
- 5G Dominance: The company holds 38.7% of Taiwan’s 5G market, with postpaid 5G subscribers up 639,000 year-over-year.
- Postpaid Strength: Postpaid mobile subscribers increased by 191,000, maintaining an ARPU of NT$553, despite flat growth.
- Fixed Broadband: A 0.8% rise in subscribers to 4.43 million underscores stable demand for home internet, while fixed-line services remain steady at 8.83 million.
The decline in total mobile users reflects a strategic pivot away from low-margin prepaid plans toward lucrative 5G and postpaid contracts.
Strategic Initiatives: Betting on Global Tech and Sustainability
Chunghwa’s long-term vision hinges on three pillars: sustainable future, smart empowerment, and digital resilience. Key moves include:
1. Network Expansion: NT$32.36 billion allocated for 5G, submarine cables, and energy-efficient photonics networks.
2. Global Reach: New offices in Texas and Arizona to tap into U.S. ICT demand, alongside satellite partnerships (e.g., Astranis’ MicroGEO) and the E2A trans-Pacific cable.
3. ESG Commitments: Aligning with net-zero goals through green data centers and asset revitalization projects.
These investments aim to future-proof growth, even as the Enterprise Business Group (EBG) faces headwinds. Despite a 3.8% drop in EBG income before tax—due to declining fixed voice revenue—cybersecurity and cloud services grew sharply, signaling a shift toward recurring revenue streams.
Challenges and Risks
- Margin Pressures: Operating costs are projected to rise 2.4% in 2025 due to infrastructure investments.
- Cash Flow Volatility: Operational cash flow fell 8.6% year-over-year, driven by higher settlements.
- Market Competition: Rivals like Taiwan Mobile and Far EasTone are aggressively expanding 5G and cloud offerings.
Conclusion: A Leader in Transition
Chunghwa Telecom’s Q1 2025 results underscore its success in transitioning from a traditional telecom operator to a digital infrastructure powerhouse. With 5G market share at 38.7%, ICT revenue surging 50%, and a five-year plan to invest NT$32.36 billion in next-gen networks, the company is well-positioned to capitalize on Taiwan’s digital economy.
However, its reliance on infrastructure-heavy investments and the need to offset declining legacy services pose risks. The stock’s 12-month price-to-earnings (P/E) ratio of 13.8x (vs. the sector average of 15.2x) reflects investor caution.
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In the coming quarters, sustained growth will hinge on executing its “Sea, Land, and Sky” strategy—integrating satellite, fiber, and 5G networks—and maintaining dominance in high-margin ICT services. For now, the Q1 results suggest that Chunghwa’s bet on digital transformation is paying off, but the road to long-term resilience remains littered with technical and financial hurdles.
Final Takeaway: Chunghwa Telecom’s Q1 2025 performance validates its shift to advanced technologies, but investors must weigh its ambitious investments against execution risks. With 5G adoption booming and global tech demand rising, the company’s vision could position it as Asia’s next digital infrastructure giant—if it can navigate the storm.
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