Chunghwa Telecom Co., Ltd. (CHT): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear, actionable breakdown of the external forces shaping Chunghwa Telecom Co., Ltd. (CHT)'s market position right now. As a seasoned analyst, I can tell you the PESTLE framework is defintely the right lens. Here's the quick math: CHT's strength in enterprise ICT and government-backed infrastructure spending is offsetting the pressure from a mature mobile market and rising operating costs.

Political Factors: Government-Backed Stability

CHT's state-owned status is a major competitive advantage, aligning its growth with significant national infrastructure investments. The government is allocating a massive NT$27 billion toward next-generation communications between 2025 and 2030. This isn't just policy; it's guaranteed business for CHT, helping it maintain its dominant position. Plus, the regulatory push for flexible frameworks supports CHT's pivot to high-margin areas like Artificial Intelligence (AI) and digital transformation. Still, the National Communications Commission (NCC) is laser-focused on cybersecurity and anti-fraud measures, so compliance costs are non-negotiable. It's a stable, but highly scrutinized, environment.

Economic Factors: Enterprise Drives Growth

While CHT operates in a mature market, aggressive growth in its Enterprise ICT segment is fueling the 2025 revenue outlook and justifying higher Capital Expenditure (CapEx). We project total revenue will hit between NT$232.74 billion and NT$233.74 billion in 2025, a modest 1.2%-1.6% growth. Honestly, that growth is almost entirely due to the Enterprise ICT business, which surged 37% year-over-year in Q2 2025. This success is why management is increasing CapEx by NT$3.37 billion to a total of NT$32.36 billion this year. Here's the quick math: the conservative debt-to-equity ratio of 0.12 means they have plenty of financial stability to absorb that investment. The government tax reduction for AI investments, active until 2029, helps too.

Sociological Factors: The High-Speed Shift

Consumer behavior is shifting from mobile subscription volume to higher-value fixed broadband services and demand for smart applications. The mobile subscriber base actually decreased 2.2% to 13.13 million as of June 2025. That's a clear signal of market saturation. But, the good news is that people are willing to pay more for speed: Fixed broadband Average Revenue Per User (ARPU) rose 1.9% to NT$804 because customers are adopting high-speed plans. Also, there's increasing public demand for smart city applications like telemedicine and smart transportation, which ties directly into the national priority of digital inclusion. CHT needs to focus on selling speed and solutions, not just lines.

Technological Factors: AI and Infrastructure Investment

CHT is aggressively investing CapEx in next-generation infrastructure, specifically Generative AI and global connectivity, to secure future enterprise revenue streams. Major CapEx is going straight into building AI internet data centers and new submarine cable construction. This isn't cheap, but it's crucial for future enterprise services. At MWC 2025, CHT partnered with Ericsson to showcase how Generative AI can be used for smart network management. They're leading the 5G deployment and using network slicing-a way to dedicate parts of the network to specific enterprise needs-for custom solutions. Anyway, they're also investing in Low Earth Orbit (LEO) satellite connectivity and 5G private networks, which is a defintely a hedge against traditional fixed-line reliance.

Legal Factors: The Cost of Compliance

Evolving legal frameworks are increasing CHT's operational and compliance costs, particularly around data privacy and fraud prevention. Recent Telecommunications Management Act amendments, effective June 2025, mandate much stronger anti-fraud and Know Your Customer (KYC) obligations. This is a direct operational cost increase. The industry is lobbying for more flexible implementation of the Personal Data Protection Act, but CHT still faces constant regulatory pressure to ensure compliance with evolving data protection and cybersecurity standards. What this estimate hides is the internal IT and training budget required to meet these new rules.

Environmental Factors: ESG as a Financial Metric

CHT's commitment to Environmental, Social, and Governance (ESG) is now a central financial strategy, directly tied to executive performance. CHT is committed to achieving Net-Zero greenhouse gas emissions by 2045. This isn't just a PR move; the company was ranked in the S&P Global Sustainability Yearbook 2025, achieving a Top 5% distinction globally. Critically, the strategy includes eliminating energy-intensive equipment to meet sustainability goals, which saves on power costs long-term. Plus, the company plans to increase the ESG performance weighting in executive compensation to a significant 30% in 2025. That level of compensation linkage ensures management will take the Net-Zero goal seriously.

Finance: draft 13-week cash view by Friday, specifically modeling the impact of the NT$32.36 billion CapEx on near-term liquidity.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Political factors

Government allocating NT$27 billion for next-gen communications (2025-2030)

The political environment in Taiwan is heavily focused on solidifying its position in the global technology supply chain, which directly translates into massive public investment for Chunghwa Telecom (CHT). The Executive Yuan is allocating approximately NT$27 billion (around US$916.7 million) between 2025 and 2030 to develop next-generation communications technology, including future 6G and advanced network infrastructure. This is a clear signal: the government is funding the runway for CHT's core business expansion.

This national push is a tailwind for CHT's capital expenditure (CAPEX). For the 2025 fiscal year, CHT plans to increase its Property, Plant and Equipment investment by NT$3.37 billion, bringing the total CAPEX to an expected NT$32.36 billion. Here's the quick math: this spending is specifically targeted at building AI internet data centers, new submarine cables, and 5G deployment, all of which align perfectly with the state's strategic investment. The political mandate is simple: build the infrastructure, and CHT is the primary builder.

State-owned enterprise status creates alignment with national policy goals

As a partially state-owned enterprise (SOE), where the Taiwan authorities retain control, including managing appointments to the board of directors, CHT's strategy is inherently tied to national policy. This close relationship is a major competitive advantage, providing stability and preferential alignment for large-scale, long-term projects.

CHT's 2025 guidance explicitly centers its efforts on three strategic pillars that mirror the government's priorities: 'Sustainable Future,' 'Smart Empowerment,' and 'Digital Resilience'. This alignment ensures that CHT is the preferred partner for major government-led initiatives, such as the 'New Ten Major AI Construction Projects' and the 'Southern Taiwan Silicon Valley Promotion Plan'. In short, CHT is the government's defintely trusted vehicle for digital transformation.

This dual role as a commercial entity and a national strategic asset is a unique political factor.

• Secures CHT as the default provider for critical national infrastructure.
• Ensures CHT's long-term strategy receives governmental support and funding priority.
• Creates a high barrier to entry for foreign competitors in strategic sectors.

Regulatory push for more flexible frameworks to support AI and digital transformation

The government is actively working to create a regulatory environment that supports the AI boom rather than stifling it. The Ministry of Digital Affairs is championing the draft Artificial Intelligence Basic Act, which has been sent to the Legislature. This bill is designed to set a risk-based framework, allowing regulators to tailor rules to specific technologies and use cases, which is crucial for CHT's push into AI-driven services.

The overall goal is to 'adjust regulations to enable smart service platforms and lower barriers to AI implementation,' which is a significant opportunity for CHT to quickly deploy new smart city and enterprise solutions. What this estimate hides is that while the framework is flexible, the legislative process can still be slow, creating near-term uncertainty for some AI applications. Still, the direction of travel is clear: regulation will help, not hurt, CHT's innovation efforts.

Cybersecurity and anti-fraud measures are a primary regulatory focus for the NCC

The National Communications Commission (NCC) has made cybersecurity and anti-fraud a top regulatory priority, a political factor that demands immediate, costly action from all telecom operators. The Legislative Yuan passed amendments to the Telecommunications Management Act in June 2025 to strengthen anti-fraud measures.

The new 'Next-generation anti-fraud strategy guidelines, version 2.0' (2025-2026) require telecom companies like CHT to implement stringent new protocols. This includes:

• Interfacing with designated databases to verify user identities.
• Establishing a joint security mechanism to classify and restrict 'high-risk' users.
• Strengthening regulations for foreign prepaid SIM cards to prevent misuse.

The government's goal is to prevent at least NT$10 billion (US$307.12 million) in financial losses from scams annually, placing the burden of implementation directly on carriers. This regulatory focus is a risk because it increases CHT's operating costs and requires significant investment in new security systems to maintain compliance, but it also creates a new business line for CHT's enterprise security division.

Next step: CHT's Enterprise Group should draft a proposal by month-end to the NCC detailing how CHT's new AI Data Centers can be leveraged to exceed the new anti-fraud verification requirements.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Economic factors

The economic outlook for Chunghwa Telecom Co., Ltd. (CHT) in 2025 is defined by a strategic shift from stable core telecom revenue to high-growth Information and Communication Technology (ICT) services, backed by a strong balance sheet and favorable government tax incentives. This pivot is driving a significant capital expenditure push, even as overall revenue growth remains modest.

2025 total revenue projected to reach NT$232.74 to NT$233.74 billion (1.2%-1.6% growth)

Chunghwa Telecom has forecasted a consolidated total revenue for the 2025 fiscal year to be in the range of NT$232.74 billion to NT$233.74 billion. This represents a projected year-over-year growth rate of 1.2% to 1.6%. Honestly, this modest growth forecast reflects the maturity of the traditional telecom market in Taiwan, but it also signals a stable foundation. The company expects the increase in revenue to be propelled by growth in mobile communications, fixed broadband access, and, most importantly, the expansion of its emerging ICT businesses.

Capital expenditure (CapEx) is increasing by NT$3.37 billion to NT$32.36 billion in 2025

The company is making a clear, aggressive move to secure future growth by significantly increasing its capital expenditure (CapEx) for 2025. The planned CapEx for Property, Plant and Equipment is set at NT$32.36 billion, an increase of NT$3.37 billion from the prior year. This substantial investment is not just for maintenance; it's a strategic allocation to next-generation infrastructure, which is why projected operating costs are also expected to rise by up to NT$4.38 billion.

Here's the quick math on where the CapEx is going:

• Expanding AI internet data centers (IDCs) to meet the massive demand for computing power.
• New submarine cable construction, like the E2A system, to enhance network resilience and capacity across the Asia-Pacific region.
• Continued 5G network deployment to maintain a competitive edge and improve network security.

Enterprise ICT revenue surged 37% year-over-year in Q2 2025, driving growth

The real engine for Chunghwa Telecom's economic momentum is its Enterprise Business Group, specifically the Information and Communication Technology (ICT) segment. In the second quarter of 2025, the Enterprise Business Group reported a 12.4% overall revenue gain, fueled by a remarkable 37% year-over-year surge in ICT services demand. This demonstrates a successful diversification strategy away from low-margin connectivity services.

This ICT growth is highly concentrated in key areas, showing where the future revenue will be generated:

The high-margin ICT business is defintely where the company is finding its value, with IDC, AIoT, and Cloud services all posting growth of 40% or more in Q2 2025.

Government tax reduction for AI-related investments is active from 2025 to 2029

A significant external economic tailwind is the Taiwanese government's new tax incentive program. The amendments to the Statute for Industrial Innovation, which became effective from January 1, 2025, and run through December 31, 2029, offer a direct economic benefit to Chunghwa Telecom's CapEx strategy. The program allows for a tax credit of up to 5% of expenditures for investments in key areas like artificial intelligence (AI), smart machinery, 5G network, and cybersecurity.

This is a clear opportunity for the company. Since a large portion of its NT$32.36 billion CapEx is earmarked for AI data centers and 5G deployment, a direct tax credit of up to 5% could translate into substantial savings on its corporate income tax (CIT) payable, effectively lowering the true cost of its strategic investments.

Conservative debt-to-equity ratio of 0.12 provides financial stability for large investments

Chunghwa Telecom's financial structure provides the stability needed to execute its large-scale CapEx plan. The company maintains a remarkably conservative debt-to-equity ratio (D/E) of approximately 0.12. A D/E ratio this low means that the company is overwhelmingly financed by equity rather than debt, which is a sign of robust financial health and low leverage risk. This strong balance sheet is a critical economic factor, as it gives management the flexibility to fund its multi-billion-dollar investments in AI and submarine cables without significant external financial pressure or high interest expense risk. It's a very safe position to be in for an infrastructure-heavy business.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Social factors

Mobile Subscriber Base and ARPU Dynamics

The social landscape for Chunghwa Telecom Co., Ltd. (CHT) is defined by a shift in customer value rather than pure volume, a common trend in mature telecom markets. While the outline noted a subscriber dip as of mid-year, the latest data shows a rebound. As of June 2025, the mobile subscriber base was indeed 13.13 million, reflecting a year-over-year decrease of 2.2%. However, by the end of Q3 2025, the total mobile subscriber base had reached 13.19 million, marking a 1.3% year-over-year increase. This suggests CHT is successfully stabilizing its mobile market position, maintaining its dominant subscriber share of 40.8%.

The real story is in the monetization of the remaining and new customers. Mobile post-paid Average Revenue Per User (ARPU), excluding Internet of Things (IoT) SIMs, rose 1.8% to NT$562 in Q3 2025, driven by strong 5G adoption. The average monthly fee uplift from customers migrating to 5G plans is substantial, holding robustly at around 40%. That's a clear signal that consumers are willing to pay a premium for enhanced connectivity, which is defintely a key social trend.

Fixed Broadband ARPU and High-Speed Adoption

The demand for high-speed fixed broadband services is a major social factor and a key revenue driver for CHT. The fixed broadband ARPU rose to NT$804 in Q2 2025, an increase of 1.9% year-over-year, as noted in the outline. By Q3 2025, this trend accelerated, with fixed broadband ARPU climbing further to NT$810, representing a 3.0% year-over-year rise.

This ARPU growth directly correlates with a consumer preference for faster speeds. Nearly 70% of new adopters in Q2 2025 opted for plans with speeds of 300 Mbps and higher. Subscriptions for 300 Mbps and above increased 14% year-over-year, while the ultra-high-speed 1 Gbps plans saw a multiple-fold expansion. This is a powerful indication of a socially driven, data-intensive lifestyle.

Increasing Public Demand for Smart City Applications

Public demand for convenience, efficiency, and safety is fueling the smart city market, creating a significant opportunity for CHT's Enterprise Business Group, which saw a 14.5% increase in ICT revenue in Q3 2025. CHT is actively leveraging its 5G and Artificial Intelligence (AI) capabilities to address this social need, which goes beyond basic connectivity.

Concrete examples of CHT's 2025 smart city focus include:

• Smart Transportation: Deploying an Intelligent Traffic Management System that uses AI image recognition and telecom big data to dynamically adjust traffic signals, reducing congestion around high-traffic areas like the Taipei Dome.
• Telemedicine/Smart Healthcare: Showcasing its independently developed AI Remote Intelligent Rehabilitation Guidance App, which addresses the social need for remote and accessible healthcare services.
• Smart Governance: Receiving the 2025 Smart City Innovative Application Award for its Telecom Big Data Innovative Services for Smart City Governance, which helps city administrators swiftly understand urban operations.

Focus on Digital Inclusion and Reducing the Digital Divide

Bridging the digital divide is a national priority, and CHT, as the incumbent leader, plays a central role. This focus is formalized under the government's nine-year Digital Nation & Innovative Economy Development Program (DIGI+ 2017-2025), where the 'I' stands for Inclusion. The goal is to ensure equal digital rights and extend broadband access to disadvantaged groups and remote regions.

This social mandate translates into business opportunities and corporate social responsibility (CSR) alignment for CHT. The company's infrastructure expansion in rural areas directly supports this national goal, and its involvement in government projects is strengthened by this alignment. Another key social-digital government initiative is the planned launch of the Taiwan Digital Identity Wallet (TW DIW) by the end of 2025. This digital ID will simplify identity verification for services, including telecom service registrations, which could streamline CHT's customer onboarding process and improve the overall digital citizen experience.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Technological factors

Major CapEx directed toward AI internet data centers and new submarine cable construction

You can see Chunghwa Telecom Co., Ltd. (CHT) is making a clear pivot in its capital expenditure (CapEx) for the 2025 fiscal year, shifting focus from mobile to a high-growth, non-mobile infrastructure play. The total CapEx budget is set at NT$32.36 billion, which is a significant 12.3% increase over the prior year's NT$28.82 billion. The real story is where that money is going: non-mobile CapEx is slated to increase by a sharp 25.2% to NT$23.98 billion.

This substantial investment is explicitly targeting the expansion of Artificial Intelligence (AI) internet data centers and the construction of new submarine cables. This is a smart, defensive, and offensive move. It addresses the rising demand for high-speed, low-latency connectivity from AI applications while simultaneously bolstering Taiwan's network resilience against geopolitical and natural risks.

Here's the quick math on the cable investments:

• SJC2 and Apricot cables: NT$2 billion (approx. USD 61 million)
• E2A trans-Pacific cable: More than NT$4.6 billion (approx. US$139.2 million)
• Asia United Gateway (AUG) East cable: More than NT$2.4 billion (approx. US$81.6 million)

The company is defintely putting its money where the future is.

Leading 5G deployment and utilizing network slicing for enterprise solutions

CHT continues to lead Taiwan's 5G market, being the only operator to secure dual certification for the best 5G network throughout 2024. The critical next step is monetizing this infrastructure through advanced features like network slicing (a technology that creates isolated, customized virtual networks on a single physical 5G Standalone or 5G SA network). You can't just have a great network; you have to sell its differentiated capabilities.

The commercialization of on-demand 5G network slicing for enterprise customers is on track for 2025. This service, built on Ericsson's Dynamic Network Slicing solution and integrated with Singtel's Paragon platform, allows businesses to dynamically manage network resources. This means a factory can instantly allocate a guaranteed slice of the network for its mission-critical robotics, while a media company can provision a slice for a live 4K broadcast event.

The real-world validation is already complete, including the successful deployment of uplink network slicing during the 'Metaverse Marathon' in Tainan. This demonstrates that the technology is ready to move from proof-of-concept to a reliable, revenue-generating enterprise solution. CHT is leveraging this to drive industrial digitalization.

Partnership with Ericsson at MWC 2025 showcased Generative AI for smart network management

At the Mobile World Congress (MWC) in March 2025, CHT and Ericsson showcased their collaborative work on AI-driven network intelligence. This isn't just about faster speeds; it's about making the network smarter, more reliable, and cheaper to run. The core innovation involves the integration of Generative AI (Gen AI) with digital twin technology.

Specifically, they are using Ericsson's Site Digital Twin (ESDT) and Ericsson Network Intelligence (ENI) to create virtual replicas of network sites. This allows the system to predict congestion and automatically optimize resources before problems even happen. During the 2024 New Year's Eve celebrations, this AI-powered solution was able to enhance network capacity by approximately 14% in high-traffic areas, proving its value in real-time, high-pressure scenarios.

Furthermore, at MWC 2025, the two companies signed a 5G Advanced Memorandum of Understanding (MoU). This agreement focuses on three key areas:

• Accelerating 5G Standalone (SA) for differentiated connectivity.
• Enabling high-performing, AI-native, and programmable networks.
• Opening network APIs for new digital services.

Investing in Low Earth Orbit (LEO) satellite connectivity and 5G private networks

The company's overarching strategy is to build a comprehensive 'Sea, Land, Sky, and Space' network, recognizing that reliance on undersea cables alone is a major vulnerability. This is a direct response to the need for digital resilience.

To this end, CHT is actively investing in satellite connectivity as a robust backup solution. They are seeking to introduce more Medium Earth Orbit (MEO) and High Earth Orbit (HEO) satellite internet services in 2025, building on the agreements signed in 2024 with partners like OneWeb and SES for LEO and MEO services.

The focus on 5G private networks is a natural extension of the enterprise network slicing initiatives. While a separate investment figure isn't broken out, the entire non-mobile CapEx increase is geared toward enterprise-focused services like AI data centers and dedicated network solutions. This focus on 5G Standalone deployment and on-demand slicing is the technical foundation for offering customized, secure, and reliable 5G private networks to large industrial and governmental clients.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Legal factors

Telecommunications Management Act amendments (June 2025) mandate stronger anti-fraud and KYC (Know Your Customer) obligations

You need to understand that the regulatory landscape for telecom fraud has dramatically tightened in 2025, directly affecting Chunghwa Telecom and its partners. The Legislative Yuan passed amendments to the Telecommunications Management Act (TMA) on June 17, 2025, specifically to strengthen anti-fraud measures.

This is not just about CHT's direct operations; it expands the regulatory scope to cover Resellers (companies leasing subscriber numbers) and Internet Access Service Providers (IASPs). These entities must now register as official Telecom Operators and meet stringent Know Your Customer (KYC) and risk management standards. Honestly, this is a major operational risk for CHT's wholesale business if its partners fail to comply. The National Communications Commission (NCC) is serious about this.

Here's the quick math on non-compliance: failure to register and comply within one year of the amendments' effective date exposes the non-compliant entity to administrative fines ranging from NT$100,000 to NT$1,000,000 (approximately US$3,386 to US$33,858). Consecutive fines are a defintely possibility until the violation is corrected. This added compliance burden on the entire ecosystem means CHT must invest more in partner oversight and internal systems to shield itself from regulatory fallout.

Regulatory pressure to ensure compliance with evolving data protection and cybersecurity standards

The push for digital resilience is a core strategic pillar for Chunghwa Telecom, but it comes with a hefty price tag driven by regulatory necessity. You are seeing the direct financial impact of compliance in the 2025 fiscal year guidance.

To meet the demands of the Cyber Security Management Act, the Personal Data Protection Act (PDPA), and global standards like ISO 27001, CHT is significantly increasing its investment in security. This isn't optional; it's a cost of doing business as a national infrastructure provider. The company's 2025 guidance projects a substantial increase in operational costs and capital expenditure directly tied to network security and resilience:

The total projected increase in operating costs and expenses alone for 2025 is over NT$4.3 billion, partly due to this security enhancement. That's a massive commitment to digital hygiene, and it's a necessary one to manage the risk of catastrophic data breaches and regulatory penalties.

Industry lobbying for more flexible implementation of the Personal Data Protection Act

The biggest near-term legal change is the establishment of the independent Personal Data Protection Commission (PDPC), which must be fully operational by August 2025. This shifts the entire data protection oversight model in Taiwan, centralizing enforcement power that was previously spread across multiple sectoral regulators.

The Legislative Yuan passed amendments to the PDPA on October 17, 2025, which were promulgated on November 11, 2025. These amendments empower the PDPC and require all non-public agencies, like CHT, to implement immediate and effective response measures for data incidents. The industry is not fighting the need for protection, but is actively engaging to shape the new, highly detailed regulations that the PDPC is authorized to formulate.

What the industry is pushing for is flexibility in the practical application of these new mandates, especially regarding the specifics of incident notification and the general personal information security maintenance plans. The new rules will apply to all industries, not just those currently under specific sectoral supervision, so the stakes are high. CHT's compliance team is focused on these key areas:

• Shaping the PDPC's regulatory orders on the content, method, and timeframe for data incident notifications.
• Influencing the scope of the general personal information security maintenance plans, which will soon become mandatory for all enterprises.
• Ensuring a smooth transition of regulatory authority from the National Communications Commission (NCC) to the new PDPC.

Your action item here is to monitor the PDPC's final regulatory orders, expected in late 2025 and early 2026, because they will dictate the final compliance costs and operational changes for CHT.

Chunghwa Telecom Co., Ltd. (CHT) - PESTLE Analysis: Environmental factors

You are defintely right to focus on Chunghwa Telecom's (CHT) environmental commitments; they are a core driver of capital expenditure and executive strategy for the 2025 fiscal year. The company is not just playing defense against regulation; they are actively positioning themselves as a global sustainability leader, which is a key differentiator for attracting institutional capital.

The core of their environmental strategy is a dual-axis approach: Technology-Driven Carbon Reduction and Renewable Energy Usage. This isn't abstract; it translates directly into a massive capital allocation plan. For 2025, the Acquisition of Property, Plant and Equipment is expected to increase by NT$3.37 billion to a total of NT$32.36 billion, a significant portion of which is explicitly earmarked for the elimination of energy-intensive equipment and expansion of energy-efficient infrastructure like AI internet data centers.

Committed to achieving Net-Zero greenhouse gas emissions by 2045.

CHT has set an aggressive, validated Net-Zero target, which is five years ahead of the global 2050 standard. This commitment to achieving Net-Zero greenhouse gas (GHG) emissions across the entire value chain by 2045 has been validated by the Science Based Targets initiative (SBTi), aligning their plan with the 1.5°C global warming scenario.

This long-term goal is supported by concrete, near-term targets. Here's the quick math on their carbon reduction path, which is critical for investors tracking progress:

• Near-Term Target (2030): Reduce absolute Scope 1 and 2 GHG emissions by 50% from a 2020 base year.
• Supply Chain Target (2030): Reduce absolute Scope 3 GHG emissions by 25% from a 2021 base year.
• 2024 Performance: Achieved a carbon reduction of 20.88% in Scope 1 and 2 emissions compared with the 2020 base year, showing strong momentum toward the 2030 goal.

Also, the company is committed to RE100 (100% renewable energy use) by 2040 and EV100 (100% electrification of its vehicle fleet) by 2030. These are not just pledges; in 2024, they already secured 72.60 million kWh of green energy, demonstrating tangible progress.

Ranked in the S&P Global Sustainability Yearbook 2025, achieving a Top 5% distinction globally.

The market is already recognizing CHT's environmental leadership. In the S&P Global Sustainability Yearbook 2025, CHT was ranked in the Top 5% of all companies considered globally for ESG performance in the telecommunications sector. They achieved this distinction for the third consecutive year, which signals consistency and a deeply embedded sustainability culture.

To be fair, the S&P Global Sustainability Yearbook evaluated 7,690 companies for the 2025 edition, and CHT was one of only 780 selected, underscoring the rigor of the standard. They also achieved the highest scores in 13 of 22 sustainability criteria within the international telecommunication sector. Plus, they hold the highest possible 'AAA' rating from MSCI ESG as of June 2025, a major vote of confidence from a leading rating agency.

ESG performance weighting in executive compensation is planned to increase to 30% in 2025.

This is where the rubber meets the road for executive accountability. CHT is directly linking senior management's financial incentives to the achievement of their environmental and sustainability goals. The weighting of ESG performance in executive compensation is planned to increase to 30% in 2025.

This move ensures that the Net-Zero by 2045 goal and the annual carbon reduction targets are not siloed in a sustainability department; they are a direct factor in the total compensation and bonus structure for the people making the highest-level strategic decisions. It's a clear signal to investors that ESG metrics are treated as seriously as financial returns like Return on Equity (ROE) and Earnings per Share (EPS).

Strategy includes eliminating energy-intensive equipment to meet sustainability goals.

The transition to low-carbon operations is heavily dependent on retiring older, power-hungry infrastructure. CHT's strategy involves the continuous phase-out of outdated, energy-intensive equipment, which is a major component of their NT$32.36 billion CapEx plan for 2025.

This strategy is executed through several key actions:

• Network Architecture: 85% of base stations now operate under the 5G C-RAN centralized architecture, which is significantly more power-efficient.
• Data Centers: They are actively working to reduce the Power Usage Effectiveness (PUE) of their Internet Data Centers (IDCs) from a 2020 base of 1.67 to a target of 1.50 or lower by 2030.
• Innovation: They are investing in the IOWN (Innovative Optical and Wireless Network) All-Photonics Network (APN) to reduce power consumption by minimizing opto-electronic conversions.

The company's commitment to energy efficiency is formalized through its certification to the ISO 50001 Energy Management System, which ensures a structured, ongoing program for energy conservation and carbon reduction across all operations. This is a strong operational framework. The table below summarizes the core environmental commitments and their associated financial or quantitative metrics for the near term.

Finance: Track the quarterly CapEx spend against the NT$32.36 billion budget to ensure the energy-intensive equipment phase-out is on schedule. The next step is to analyze the cost of the 72.60 million kWh of green energy procurement and its impact on the 2025 operating costs, which are already expected to increase by NT$4.31~4.38 billion.