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Segment Information
 12 Months Ended
Dec. 31, 2018
Disclosure Of Operating Segments [Abstract]  
Segment Information

44.

SEGMENT INFORMATION

The Company has the following reportable segments that provide different products or services.  The reportable segments are managed separately because each segment represents a strategic business unit that serves different markets.  Segment information is provided to CEO who allocates resources and assesses segment performance.  The Company’s measure of segment performance is mainly based on revenues and income before income tax.  The Company’s reportable segments are as follows:

 

a.

Domestic fixed communications business - the provision of local telephone services, domestic long distance telephone services, broadband access, and related services;

 

b.

Mobile communications business - the provision of mobile services, sales of mobile handsets and data cards, and related services;

 

c.

Internet business - the provision of HiNet services and related services;

 

d.

International fixed communications business - the provision of international long distance telephone services and related services;

 

e.

Others - the provision of non-telecom services and the corporate related items not allocated to reportable segments.

Some operating segments have been aggregated into a single operating segment taking into account the following factors:  (a) similar economic characteristics such as long-term gross profit margins; (b) the nature of the telecommunications products and services are similar; (c) the nature of production processes of the telecommunications products and services are similar; (d) the type or class of customer for the telecommunications products and services are similar; and (e) the methods used to provide the services to the customers are similar.

There was no material differences between the accounting policies of the operating segments and the accounting policies described in Note 3.

 

a.

Segment revenues and operating results

Analysis by reportable segment of revenues and operating results of continuing operations was as follows:

 

 

 

Domestic

Fixed

Communi-

cations

Business

 

 

Mobile

Communi-

cations

Business

 

 

Internet

Business

 

 

International

Fixed

Communi-

cations

Business

 

 

Others

 

 

Total

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Year ended December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From external customers

 

$

72,784

 

 

$

110,801

 

 

$

28,100

 

 

$

14,434

 

 

$

3,872

 

 

$

229,991

 

Intersegment revenues

 

 

22,669

 

 

 

2,530

 

 

 

4,734

 

 

 

2,680

 

 

 

4,122

 

 

 

36,735

 

Segment revenues

 

$

95,453

 

 

$

113,331

 

 

$

32,834

 

 

$

17,114

 

 

$

7,994

 

 

 

266,726

 

Intersegment elimination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(36,735

)

Consolidated revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

229,991

 

Segment income before income tax

 

$

25,658

 

 

$

13,926

 

 

$

10,729

 

 

$

1,098

 

 

$

(1,998

)

 

$

49,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From external customers

 

$

71,137

 

 

$

109,376

 

 

$

28,917

 

 

$

13,552

 

 

$

4,532

 

 

$

227,514

 

Intersegment revenues

 

 

22,515

 

 

 

2,031

 

 

 

4,209

 

 

 

2,375

 

 

 

4,600

 

 

 

35,730

 

Segment revenues

 

$

93,652

 

 

$

111,407

 

 

$

33,126

 

 

$

15,927

 

 

$

9,132

 

 

 

263,244

 

Intersegment elimination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,730

)

Consolidated revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

227,514

 

Segment income before income tax

 

$

24,888

 

 

$

12,433

 

 

$

11,118

 

 

$

1,029

 

 

$

(1,459

)

 

$

48,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From external customers

 

$

66,753

 

 

$

100,937

 

 

$

29,813

 

 

$

13,435

 

 

$

4,545

 

 

$

215,483

 

Intersegment revenues

 

 

17,125

 

 

 

1,702

 

 

 

4,038

 

 

 

2,234

 

 

 

5,008

 

 

 

30,107

 

Segment revenues

 

$

83,878

 

 

$

102,639

 

 

$

33,851

 

 

$

15,669

 

 

$

9,553

 

 

 

245,590

 

Intersegment elimination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,107

)

Consolidated revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

215,483

 

Segment income before income tax

 

$

18,243

 

 

$

15,328

 

 

$

11,944

 

 

$

1,024

 

 

$

(1,553

)

 

$

44,986

 

 

 

b.

Other segment information

Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:

For the year ended December 31, 2016

 

 

 

Domestic

Fixed

Communi-

cations

Business

 

 

Mobile

Communi-

cations

Business

 

 

Internet

Business

 

 

International

Fixed

Communi-

cations

Business

 

 

Others

 

 

Total

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Share of the profit of associates and joint

   ventures accounted for using equity method

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

515

 

 

$

515

 

Interest income

 

$

15

 

 

$

11

 

 

$

7

 

 

$

6

 

 

$

150

 

 

$

189

 

Interest expenses

 

$

—

 

 

$

2

 

 

$

—

 

 

$

—

 

 

$

18

 

 

$

20

 

Operating costs and expenses

 

$

64,230

 

 

$

79,593

 

 

$

13,160

 

 

$

14,313

 

 

$

10,094

 

 

$

181,390

 

Depreciation and amortization

 

$

16,414

 

 

$

10,620

 

 

$

3,626

 

 

$

1,451

 

 

$

374

 

 

$

32,485

 

Capital expenditure

 

$

9,846

 

 

$

8,981

 

 

$

2,718

 

 

$

1,136

 

 

$

836

 

 

$

23,517

 

Impairment loss on property, plant and

   equipment

 

$

—

 

 

$

596

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

596

 

Reversal of impairment loss on investment

   properties

 

$

148

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

148

 

 

For the year ended December 31, 2017

 

 

 

Domestic

Fixed

Communi-

cations

Business

 

 

Mobile

Communi-

cations

Business

 

 

Internet

Business

 

 

International

Fixed

Communi-

cations

Business

 

 

Others

 

 

Total

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Share of the profit of associates and joint

   ventures accounted for using equity method

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

419

 

 

$

419

 

Interest income

 

$

21

 

 

$

15

 

 

$

9

 

 

$

15

 

 

$

145

 

 

$

205

 

Interest expenses

 

$

—

 

 

$

6

 

 

$

—

 

 

$

—

 

 

$

16

 

 

$

22

 

Operating costs and expenses

 

$

62,795

 

 

$

80,275

 

 

$

13,288

 

 

$

13,385

 

 

$

10,963

 

 

$

180,706

 

Depreciation and amortization

 

$

15,614

 

 

$

11,001

 

 

$

3,385

 

 

$

1,477

 

 

$

453

 

 

$

31,930

 

Capital expenditure

 

$

11,647

 

 

$

9,742

 

 

$

2,779

 

 

$

1,580

 

 

$

1,127

 

 

$

26,875

 

Reversal of impairment loss on investment

   properties

 

$

11

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

11

 

 

For the year ended December 31, 2018

 

 

 

Domestic

Fixed

Communi-

cations

Business

 

 

Mobile

Communi-

cations

Business

 

 

Internet

Business

 

 

International

Fixed

Communi-

cations

Business

 

 

Others

 

 

Total

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Share of the profit of associates and joint

   ventures accounted for using equity method

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

509

 

 

$

509

 

Interest income

 

$

18

 

 

$

12

 

 

$

19

 

 

$

28

 

 

$

120

 

 

$

197

 

Interest expenses

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

18

 

 

$

18

 

Operating costs and expenses

 

$

59,430

 

 

$

73,901

 

 

$

13,766

 

 

$

13,279

 

 

$

11,573

 

 

$

171,949

 

Depreciation and amortization

 

$

15,027

 

 

$

13,788

 

 

$

3,121

 

 

$

1,425

 

 

$

448

 

 

$

33,809

 

Capital expenditure

 

$

12,693

 

 

$

10,664

 

 

$

2,729

 

 

$

1,348

 

 

$

1,116

 

 

$

28,550

 

Reversal of impairment loss on investment

   properties

 

$

19

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

19

 

 

 

c.

Main products and service revenues

The following is an analysis of the Company’s revenue from its major products and services.

 

 

 

Year Ended December 31

 

 

 

2016

 

 

2017

 

 

2018

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Mobile services revenue

 

$

78,788

 

 

$

75,823

 

 

$

63,906

 

Sales of product

 

 

35,377

 

 

 

37,649

 

 

 

41,289

 

Local telephone and domestic long distance telephone

   services revenue

 

 

34,531

 

 

 

32,247

 

 

 

29,996

 

Broadband access and domestic leased line services revenue

 

 

23,315

 

 

 

22,950

 

 

 

22,453

 

Data communications internet services revenue

 

 

20,906

 

 

 

21,143

 

 

 

21,137

 

International network and leased telephone services revenue

 

 

10,634

 

 

 

9,328

 

 

 

8,724

 

Others

 

 

26,440

 

 

 

28,374

 

 

 

27,978

 

 

 

$

229,991

 

 

$

227,514

 

 

$

215,483

 

 

 

d.

Geographic information

The users of the Company’s services are mainly from Taiwan, ROC.  The revenues it derived outside Taiwan are mainly revenues from international long distance telephone and leased line services.  The geographic information for revenues was as follows:

 

 

 

Year Ended December 31

 

 

 

2016

 

 

2017

 

 

2018

 

 

 

NT$

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Taiwan, ROC

 

$

218,933

 

 

$

217,568

 

 

$

205,696

 

Overseas

 

 

11,058

 

 

 

9,946

 

 

 

9,787

 

 

 

$

229,991

 

 

$

227,514

 

 

$

215,483

 

 

The Company has long-lived assets in U.S., Singapore, Hong Kong, China, Vietnam, Japan, and Thailand and except for $4,445 million and $4,324 million as of December 31, 2017 and 2018, respectively, in the aforementioned areas, the other long-lived assets are located in Taiwan, ROC.

 

e.

Major customers

For the years ended December 31, 2016, 2017 and 2018, the Company did not have any single customer whose revenue exceeded 10% of the total revenues.