17133Q403

Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. In the normal course of business, we are routinely subject to a variety of risks, including market risk associated with interest rate movements, currency rate movements on non-NT dollar-denominated assets and liabilities and equity price movements on our portfolio of equity securities. We regularly assess these financial instruments and their ability to address market risk and have established policies and business practices to protect against the adverse effects of these and other potential exposures. Interest Rate Risk We do not expect interest rate risk to have a material impact on our financial condition and results of operations. Please refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a discussion of our loans. For our non-fixed interest rate loans, the interest rates will change in accordance with the benchmark rates of the banks we borrowed from. For the financial assets, the risk associated with fluctuating interest rates is principally confined to our cash deposits in banks, which is one of the many ways we manage our capital. Assuming an increase or decrease of 0.25% in the interest rates of our non-fixed interest rate financial assets and loans, our profit before tax for the year ended December 31, 2025 would have increased or decreased by NT$42 million (US$1.3 million). We have not used any derivative financial instruments to hedge interest rate risk. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. As of December 31, 2025, our cash and cash equivalents amounted to NT$36.9 billion (US$1.2 billion). Interest income from our cash deposits in banks accounts for only a very small percentage of our total revenues. Therefore, we believe our exposure to interest rate risk is immaterial. Foreign Currency Risk We are exposed to foreign currency risk as a result of (i) our foreign currency and derivative trading activities; (ii) our telecommunications equipment being sourced from overseas suppliers; (iii) our international settlement payments associated with our services for international calls and roaming traffic; and (iv) investment denominated in foreign currencies. We entered into forward exchange contracts to reduce our exposure to foreign currency risk due to fluctuations in exchange rates. Outstanding forward exchange contracts on December 31, 2025 were as follows: FX Instrument Currencies Involved Maturity Period Contract Amount Forward exchange contracts-Buy NT$/USD January 2026 NT$30 million/USD1.0 million Forward exchange contracts-Buy NT$/EUR January 2026 NT$55 million/EUR1.5 million Forward exchange contracts-Buy NT$/EUR March 2026 NT$89 million/EUR2.5 million Forward exchange contracts-Buy NT$/EUR March 2026 NT$89 million/EUR2.5 million 86 Note 38 to our consolidated financial statements included elsewhere in this annual report provides a sensitivity analysis for foreign currency risk. Equity Price Risk We are exposed to equity price risk as a result of holding other company’s equity and we manage our investment portfolio in accordance with our internal policies and procedures. The table below presents the carrying amount and accumulated unrealized gain or loss for our financial assets at fair value through profit or loss, or FVTPL, and financial assets at fair value through other comprehensive income, or FVOCI, as of December 31, 2025. Carrying Amount Unrealized Gain Unrealized Loss NT$ NT$ NT$ (in millions) Financial assets at FVTPL Non-listed stocks and limited partnership 1,141 11 401 Financial assets at FVOCI Listed stocks 316 127 182 Non-listed stocks 6,490 1,877 687 The value of our equity holdings fluctuates depending on the market conditions. Assuming an increase or decrease of 5% in the equity prices, our profit before tax and other comprehensive income before tax for the year ended December 31, 2025 would have increased or decreased by NT$57 million (US$1.8 million) and NT$340 million (US$10.8 million) as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. However, we do not expect the gains and losses in the values of the equities that we hold to have a material impact on our financial condition and results of operations.

A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors Our business and operations are subject to various risks, many of which are beyond our control. If any of the risks described below actually occurs, our business, financial condition or results of operations could be seriously harmed. Risks Relating to Our Company and the Taiwan Telecommunications Industry Extensive regulation of our industry may limit our flexibility to respond to market conditions and landscape, and our business and revenues may suffer. As a telecommunications service provider in Taiwan, we are subject to extensive regulation. According to the ROC Telecommunications Management Act, or the TMA, telecommunications enterprises shall register themselves with the NCC and become subject to the TMA. We applied for registration on July 31, 2020, and received approval from the NCC on September 30, 2020. Since then, we have become subject to the TMA. On April 15, 2022, the NCC announced that two retail service markets (i.e., the fixed-line voice market and the fixed-line broadband market) and three wholesale service markets (i.e., the fixed-line wholesale market, fixed-line voice access market and the mobile voice access market) are designated as specific telecommunications service markets; on June 5, 2023, we were officially determined to be the telecommunications enterprise with significant market power in the aforementioned five specific telecommunications service markets subject to special control measures, including fee control, accounting separation, information transparency and non-discrimination treatment. Since the NCC has not yet updated the definition for the scope of market, the current announcements will still be the primary basis for such assessment. See “Item 4. Information on the Company—B. Business Overview—Regulation” for more information on the regulatory environment. With respect to the special control measures relating to fee control, the NCC announced the promulgation of the “Primary Fees, Adjustment Coefficients and Years of Implementation for Price Cap Control Enforced on Significant Market Power in the Fixed Communication Network Voice Retail Service Market, Fixed Communication Network Broadband Retail Service Market and Fixed Communication Network Wholesale Service Market” on June 2, 2023, and the promulgation of the “Upper Limits on the Termination Rates for Voice Service over Fixed Network Provided by Significant Market Powers” on June 5, 2023, which constrain our ability to raise prices. On March 15, 2024, the NCC announced that, effective from April 1, 2024, the “monthly rental fee of broadband network circuit” were enforced to be reduced by “3.32% minus annual growth rate of the Consumer Price Index (CPI),” excluding the circuits of ADSL, that with download speed at and below 12 Mbps and that with download speed at 300 Mbps and above. For the fixed-line wholesale services, including the private circuits, 3 broadband network wholesale circuits and internet interconnection bandwidth, the fees were enforced to be reduced by “5.09% minus annual growth rate of CPI,” excluding the circuits with download speed at and under 2 Mbps. The NCC announced on July 17, 2024 that from 2025 to 2028, the “Upper Limits on the Termination Rate for Voice Service over Mobile Network Provided by Significant Market Powers” will be lowered, year by year, from the current NT$0.407 to NT$0.330 per minute, with an aggregate decrease of about 19%. The Termination Rate for Voice Service over Mobile Network was NT$0.386 in 2025. See “Item 4. Information on the Company—B. Business Overview—Regulation” and “Item 5. Operating and Financial Review and Prospects—Overview—Tariff adjustments.” We cannot assure you that we will not be required to further reduce our tariffs again in the future. Any mandatory tariff reductions could have a material adverse effect on our revenues. If we fail to comply with the regulations of the ROC Fair Trade Act, we may be investigated and fined. As a provider of telecommunication products and services, our business operations are subject to the regulations of the ROC Fair Trade Act, or the FTA, which is administered and enforced by the ROC Fair Trade Commission, or the FTC. The FTA requires, among other things, that the marketing and promotional materials of a business to be true and not misleading. The FTA also prohibits a business from participating or engaging in a cartel or other anti-competitive conduct. The FTC has the authority under the FTA to investigate and, where appropriate, impose fines and penalties on a business that violates any regulations promulgated by the FTA. The consequences of any such violations could have a material adverse effect on our business and results of operations. See “Item 4. Information on the Company—B. Business Overview—Regulation” for a discussion of the FTA applicable to us. We have been investigated and penalized by the FTC in the past and may continue to be investigated or penalized by the FTC if we fail to comply with the relevant regulations. As the FTA provides the FTC broad discretion to interpret cartel or other anti-competition actions and enforce the relevant clauses under the FTA and FTC might take a different view of our existing business operation in the wake of advancement of global regulatory trend, we are unable to predict whether or when the FTC would initiate investigations on any of our daily business activities or find us liable for violating the FTA in the future. The investigations of any penalties imposed by the FTC could interrupt our provision of products or services and have a negative impact on our reputation, business operations and results of operations. If we do not or are unable to obtain and maintain necessary approvals to operate our business, our business prospects and future results of operations would be adversely affected. We operate our businesses with approvals (including licenses) granted by the government and we have obtained necessary approvals to provide our services. If these approvals are revoked or suspended or are not renewed, or if we are unable to obtain any necessary approvals that we may need to operate or expand our business in the manner we desire, our financial condition and results of operations, as well as our prospects, will suffer and we may lose our customers and market share and become less profitable. If we are unable to successfully acquire and maintain the rights to use the frequency spectrums or other approvals that we may need for our future business operations, our business prospects and future results of operations may be materially and adversely affected. Market landscape may adversely affect our growth and profitability by causing us to lose customers, charge lower tariffs, spend more on marketing or lose market share. The market landscape of the telecommunications industry in Taiwan is constantly changing. After two operators were merged in December 2023, the number of mobile network operators in Taiwan decreased from five to three, including us, and the degree of concentration of the telecommunication industry in Taiwan has been increasing. In 2025, our competitors have placed greater emphasis on integrating their network and customer service capabilities, among other areas. We anticipate that this integration may boost their competitiveness. We will be dedicated to meeting customer demands, driving revenue growth, and increasing 5G penetration, among other priorities. However, we cannot assure you that we can successfully manage these risks or develop effectively to maintain our market share and customer base, achieve economies of scale or sustain our profit margin under the increased market concentration. If we fail to do so, our business, results of operation and financial conditions may be adversely affected. 4 Our primary advantages lie in our leading 5G service and the design of effective tariffs. In 2025, the strategy of our mobile business was to focus on promoting the highest quality of 5G service to our subscribers. More subscribers upgrading to 5G plans will increase the possibility of raising our mobile services revenues. However, mobile network operators might offer aggressive programs to attract consumers, such as unlimited low-priced data plans. We cannot assure you that we will be able to constantly raise our revenues from mobile broadband services in light of the current market landscape, which could have a material adverse effect on our business prospects and our future results of operations. Cable operators mainly promote high-speed internet access and TV converging solutions, and the bundled price is about 10% to 20% off ours. Furthermore, they offer low-price promotions of about 40% to 60% off ours for competitors’ subscribers and expand sales channels through cross-industry alliances. Competitors may also roll out aggressive marketing plans such as bundling broadband internet and 4G/5G mobile services to stir the market. Although we have rolled out Multiple-Play Package of mobile service, broadband service and Wi-Fi bundled plans, we still face intensified low-price strategies from other cable operators for our broadband access and IPTV services. If we are unable to achieve a favorable position compared with the cable operators for broadband access and multimedia-on-demand, or MOD, services, our results of operations could be impacted. As mobile data access speeds have increased with the advancement of technologies, many of our customers have replaced fixed broadband services with high-speed mobile broadband services, especially those who used lower-speed fixed broadband services. Any of these developments could adversely affect our business, financial condition and results of operations. As an internet service provider, we may not be able to protect our customers and their information from cyberattacks, nor protect our services or those of our partners with whom we share our confidential information from disruptions due to cybersecurity breaches. Driven by emerging technologies such as artificial intelligence, or AI, Internet of things, or IoT, and cloud services, cybersecurity threats have evolved into multi-faceted mixed attacks. To improve and expand our services, we utilize third-party AI algorithms and models to power our intelligent customer and counter services. However, we do not have control over the stability of these external AI solutions. Any technical issues, service interruptions, or performance declines could adversely impact our business continuity and customer satisfaction. In addition, AI solutions are subject to hacking, spamming, viruses, software malfunction, and other computer vulnerabilities and technical glitches or maintenance failures, and we depend on the security protocols of these third-party partners to safeguard our systems as well as our customers’ and our data. We have established an AI management framework and operational organization that complies with the ISO 42001 standard. Additionally, we conduct risk identification and assessment in accordance with the "National Critical Infrastructure Application of Artificial Intelligence Reference Guidelines, "implementing control measures to mitigate the potential risks associated with AI technology. However, we cannot assure the sufficiency of these measures against cyber threats or operational failure. Should third-party AI solutions fall victim to cyber-attacks, our operations might be hindered, and our customers’ and our data could be exposed, tampered with, or lost, severely damaging customers’ rights, undermining our business and causing us penalties and financial losses. In addition, malware attacks, which are often imbedded into supply chain software, have become more frequent and diverse, and would adversely impact business services or privacy leakage. The Cyber Security Management Act came into force on January 1, 2019. According to the Act, a critical infrastructure provider shall satisfy the requirements of the cybersecurity responsibility level, to amend and implement the cybersecurity maintenance plan. The “Administration Regulations of Cyber Security on Telecommunications Business,” promulgated pursuant to the “Telecommunications Management Act,” was enforced on July 1, 2020. According to the Regulations, telecommunications enterprises shall establish a cybersecurity maintenance plan and implement it accordingly. If we fail to comply with such requirements, we may be subject to administrative penalties. We may suffer negative consequences, such as remedial costs, increased cybersecurity protection costs, lost revenues, litigation and reputational damage due to cyberattacks. See “Item 16K. Cybersecurity.” 5 If new technologies adopted by us do not perform as expected, or if we are unable to effectively deliver new services based on these technologies in a commercially viable manner, our revenue growth and profitability will decline. We are constantly evaluating new growth opportunities. Some of these opportunities involve new services for which there are no proven markets, and may not develop as expected. Our ability to deploy and deliver these services will depend, in many instances, on new but unproven technologies. These new technologies may not perform as expected or generate an acceptable return. In addition, we may not be able to develop new technologies to effectively, competitively and economically deliver these services. In the era of 5G, generative AI and the information and communication technology, or ICT, realm, there could be more services beyond that of standard operators by delivering services via a B2B2X model, which is substantially dependent on the availability of applications and devices developed by third parties. If we fail to deliver commercially viable services based on the new technologies that we adopt, our financial condition and results of operations may be materially and adversely affected. In addition, we may need to cooperate with certain third parties to deliver these new services. To the extent that these third parties fail to perform their obligations, our services, financial condition and results of operations may be materially and adversely affected. Our ability to deliver services may be disrupted due to systems failures, network shutdowns, earthquakes or other natural disasters. Our ability to deliver services could be disrupted by systems failures, network shutdowns or other unanticipated problems at our facilities. For example, our submarine cables might be broken due to removals of sand and gravel by certain sand pumper dredgers, which would cause suspensions of our fixed line services, MOD, broadband access and mobile services. Taiwan is also susceptible to earthquakes and typhoons. However, we do not carry insurance to cover damage caused by earthquakes, typhoons or other natural disasters, including the effects of climate changes (such as drought, floods and increased storm severity), or any resulting business interruption. Our services are currently carried through our fixed and mobile communications networks, as well as through our transmission networks consisting of optical fiber cable, microwave, submarine cable and satellite transmission links, which could be vulnerable to damage or interruptions in operations due to natural disasters. The occurrence of natural disasters could impact our ability to deliver services and have a negative effect on our results of operations. In 2025, we recorded losses on property, plant and equipment arising from natural disasters such as earthquakes and typhoons in the amount of approximately NT$46.60 million (US$1.49 million). Furthermore, we might also be liable for losses claimed from our customers that were incurred from our failure to deliver our services. These potential liabilities could also have a material adverse effect on our results of operations. Effects of climate change may result in potential adverse impacts on our business, financial conditions and results of operations. Climate change presents a multifaceted risk landscape for our company. The escalating frequency and severity of extreme weather events, such as typhoons, floods, high temperatures and wildfires, pose a direct threat to our physical infrastructures, such as Internet Data Centers, or IDCs, and base stations, potentially leading to service disruptions and heightened operational costs associated with maintenance, repairs and replacements. Moreover, the global shift towards stringent climate change-related policies amplifies regulatory risks. Compliance with evolving international and industry standards as well as additional disclosure requirements incur costs and potentially strain financial resources. For example, the imposition of carbon fees or other regulatory fees in a jurisdiction where we operate could result in substantially higher compliance costs. In particular, in response to global climate change, Taiwan adopted the Climate Change Response Act (formerly known as the Greenhouse Gas Reduction and Management Act) in February 2023, which establishes the goal of achieving net-zero emissions by 2050 and introduced the carbon pricing system. Starting in 2026, the Ministry of Environment requires telecommunications service providers with more than 100 retail stores to conduct greenhouse gas (GHG) inventories and reporting. Although we meet the applicable threshold, under the current regulatory framework, entities in the telecommunications industry are required only to submit greenhouse gas emissions inventory data. We are not, at this time, subject to mandatory third‑party verification requirements, nor are we included within the scope of entities subject to the carbon levy. However, the imposition of any additional regulatory fees, together with future legislative 6 and regulatory developments, may increase our compliance costs or subject us to further operational restrictions, which may adversely affect our financial condition. In addition, the requirements for climate-related disclosures continue to expand. Taiwan’s Financial Supervisory Commission (FSC) has announced that listed companies will be required to include climate-related information in their annual reports, aligning with the IFRS Sustainability Disclosure Standards in the coming future. We have taken proactive steps to comply with applicable regulations, which has resulted in and may continue to result in additional costs and efforts. Furthermore, beyond immediate operational and financial impacts, there also exists higher market expectation for large enterprises like us to take more initiatives and responsibility. Failure to meet these expectations may result in reputational damage and a potential loss of customer trust. We always commit to the adaptation and mitigation of climate change and reducing operational risks of our business. For example, we adopted the Task Force on Climate-related Financial Disclosure, or TCFD, in 2020. Since then, we have continuously disclosed information on governance, strategy, risk management as well as metrics and goals regarding climate-related risks and opportunities in our sustainability report and on our official website. We also set detailed carbon emission management targets to achieve the goal of 2045 net-zero emissions. Our carbon emission management targets include achieving a 50% reduction of scope 1 and 2 carbon emissions by 2030 compared with the level in 2020, and using 100% renewable energy for IDCs by 2030 and for the Company by 2040. For further initiatives and measures we adopt in response to climate-related challenges, please refer to “Item 4. Information on the Company — B. Business Overview — Corporate Responsibilities: Environmental, Social and Governance (ESG) Initiatives.” However, we cannot assure you that we will be successful in achieving these goals or transitioning to low-carbon operations as we have committed. If we fail to do so, our business, financial conditions, results of operations and reputation may be adversely affected. Our long-term international bandwidth supply may be disrupted by unexpected delays for new international submarine cables. The complicated permitting processes for our submarine cables have caused unexpected delays on operation and construction. For example, the completion of our APRICOT submarine cable was postponed to 2028. In the foreseeable future, submarine cables remain an indispensable international bandwidth solution, especially for Taiwan, and cannot be replaced by alternatives such as satellite and microwave transmission. Any disruption on these new submarine cable projects would not only impact our services for individual customers but also jeopardize our IDC operations, terrestrial links, and international bandwidth sales, and eventually may have a material adverse effect on our business. Changes in technology may render our current technologies obsolete or require us to obtain approvals for introducing new services or make substantial capital investments, financing or successfully manage our liquidity and cash flows. The telecommunications industry in Taiwan has been characterized by rapid increases in the diversity and sophistication of the technologies and services offered. As a result, we need to constantly upgrade our telecommunications technologies and services to respond to evolving industry conditions and customer requirements, rendering some less advanced technologies obsolete. The cost of implementing new technologies, such as the use of generative AI, AI Agents, and large-scale computing infrastructure, upgrading our networks or expanding capacity could be significant. In particular, we have made and will continue to make substantial capital expenditures in the near future to effectively respond to technological changes and meet the increasing high-bandwidth requirements driven by advanced computing and AI workloads. After obtaining 5G mobile broadband services spectrum, we started our expansion and optimization of our 5G network coverage and capacity, which would require additional financing. However, our ability to obtain additional financing will depend on a number of factors, including, but are not limited to, our financial condition, results of operations, financing cost, telecommunications industry conditions, financial market conditions, and relevant government and other regulatory approvals. Furthermore, failure to comply with covenants in our debt documents or repay debts when due may negatively affect our credit ratings, which will cause our financing costs to increase and weaken our fundraising capabilities, further affecting our liquidity position and financial condition. 7 Any inability to obtain the funding for our capital expenditures on commercially acceptable terms could jeopardize our expansion plans and materially and adversely affect our business prospects and future results of operations. We may not realize the benefits we expect from our investments, which may materially and adversely affect our business, financial condition, results of operations and prospects. We have made significant capital investments in our network infrastructure and information technology systems. To continue developing our business and offer more attractive and innovative services/solutions, we intend to continue making substantial capital expenditures in different areas and new technologies. However, customer acceptance of those new services/solutions may not be at the expected rate or level, or it may be unable to satisfy our customers’ demands in time, thus impairing the expected return from our investments. We cannot assure you that services enabled by the advanced and evolving technologies we are adopting, such as generative AI and AI-driven automation, edge-to-cloud integration, Open RAN (O‑RAN), and All‑Photonic Network (APN), will be accepted by customers as expected. In addition, there might be risks of unforeseen complications in deploying these new services and technologies, and we cannot assure whether anticipated capital expenditures for providing such services will exceed our estimate. These new services and technologies may not be developed or deployed on schedules or may not reach expected commercial benefits. The failure of any of our services to achieve commercial acceptance could result in additional capital expenditures or a reduction in profitability to the extent that we are required under applicable accounting standards to recognize a charge for impairment of assets. Any such charge could materially and adversely affect our financial condition and results of operations. We recognized an impairment loss for investment properties, property, plant and equipment, as well as intangible assets in the past. In 2025, we concluded that the recoverable amount representing the fair value less costs of disposal of investment properties was higher than the carrying amount. Therefore, we recognized a reversal of impairment loss of NT$28.4 million (US$0.9 million) for investment properties. On the other hand, in 2025, we also evaluated and determined that the recoverable amount of certain telecommunications equipment was nil and recognized an impairment loss of NT$112.2 million (US$3.6 million) for property, plant and equipment as a result. Furthermore, we cannot assure you that we will be able to maintain control of and consolidate the results of operations of our minority-owned subsidiaries. For example, we consolidated the results of operations of SENAO because we have remained in control over SENAO’s relevant activities and the governance of the entity. Please refer to Note 3 and Note 15 to our consolidated financial statements included in this annual report for details. We might be unable to maintain control over SENAO’s relevant activities, which could adversely affect our consolidated results of operations and ability to meet the operating results guidance that we have projected. We may also make equity investments in companies from time to time, but we cannot assure you of their profitability and whether any losses related to our equity investments will not have a material adverse effect on our financial condition or results of operations. For example, we invested in Next Commercial Bank Co., Ltd., or NCB, in 2020. Although NCB launched its services on March 29, 2022 and serves as a pivotal strategic investment for our company’s fintech strategy, it has yet to generate profits. Our largest stockholder may take actions that conflict with our public stockholders’ best interests. As of December 31, 2025, our largest shareholder, the government of the ROC, through the MOTC, owned approximately 35.29% of our outstanding common shares. Accordingly, the government, through its control over our board, as all non-independent board members were appointed by the MOTC, may continue to have the ability to control our business, including matters relating to: •any sale of all or substantially all of our assets; •the approval of our annual operation and projects budget; •the composition of our senior management; 8 •the timing and distribution of dividends; •the election of a majority of our directors; and •our business activities and direction. We cannot assure you that our largest shareholder will not take actions that impair our ability to conduct our business competitively or conflict with the best interests of our public stockholders. Any outbreak of contagious diseases may materially and adversely affect our business and operations, as well as our financial condition and results of operations. Any outbreak of contagious diseases, such as COVID-19, influenza, Zika virus, dengue fever or Ebola virus, may disrupt our ability to adequately staff our business and disrupt our operations. If any of our employees is suspected of having contracted any contagious disease, we may, under certain circumstances, be required to implement a work-from-home or quarantine policies. Any such outbreak may also restrict the extent of economic activity in affected regions as governments may adopt measures such as travel restrictions and quarantine policies to combat the diseases, and the relevant effects may last for a long time. The resurgence or occurrence of any contagious diseases and the adoption of similar measures may have a material adverse effect on our business, financial condition and results of operations. Actual or perceived health risks related to mobile handsets and base stations could lead to decreased mobile service usage and difficulties in increasing network coverage and could expose us to potential liability. According to some published reports, the electromagnetic signals from telecom equipment such as mobile handsets, cellular base stations, and satellite user terminals may pose health risks or interfere with the operation of electronic equipment. Although the findings of those reports are disputed, actual or perceived risks of using mobile communications devices or of cellular base stations could have a material adverse effect on mobile service providers, including us. For example, our customer base could be reduced, our customers may reduce their usage of our mobile services, we could encounter difficulties in obtaining sites for additional cellular base stations required to expand our network coverage or we may be requested to reduce the number of existing cellular base stations. As a result, our mobile services business may generate less revenues and our financial condition and results of operations may be materially and adversely affected. In addition, we could be exposed to potential liability for any health problems caused by mobile handsets and base stations. If we fail to maintain a good relationship with our labor unions, work stoppages or labor unrest could occur and the quality of our services as well as our reputation could suffer. In accordance with the articles of association of Chunghwa Telecom Workers’ Union, except for the chief manager of each department, most of our employees are members of our principal labor union, the Chunghwa Telecom Workers’ Union. Since our incorporation in 1996, we have experienced disputes with our labor unions on issues such as employee benefits and retirement benefits in connection with our privatization as well as the right to protest. In spite of having taken measures to improve relations, increase cooperation and ensure mutual benefit with our labor unions, such as increasing channels of communications by holding periodic labor resource review meetings and guaranteeing our labor unions a seat on our board of directors, we cannot assure you that we will be able to maintain a good relationship with our labor unions. Any deterioration in our relationship with our labor unions could result in work stoppages, strikes or threats to take such an action, which could disrupt our business and operations, materially and adversely affect the quality of our services and harm our reputation. Our business and operation may be adversely impacted if we fail to achieve and maintain effective internal control or if our independent registered public accountants are unable to attest to or express an unqualified opinion on the effectiveness of our internal controls over financial reporting. We are subject to the reporting requirements of the SEC. The SEC, as directed by Section 404 of the U.S. Sarbanes-Oxley Act of 2002, adopted rules requiring U.S. public companies to include a report of management on our internal control over financial reporting in their annual reports that contain an assessment by management of the 9 effectiveness of our internal control over financial reporting. The effectiveness of our internal control over financial reporting has been audited by PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm, which has also audited our consolidated financial statements for the year ended December 31, 2025. PricewaterhouseCoopers, Taiwan has issued an attestation report on the effectiveness of our internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). We are also required to and have policies in place to comply with various ROC and U.S. laws and regulations on internal controls. However, our internal controls, including policies and procedures, may not prevent or detect misstatements or misconduct because of their inherent limitations, including the possibility of human error, the circumvention or overriding of controls, fraud or corruption. While the management report included in this annual report concluded that our internal control over financial reporting was effective, we cannot assure you that our management will be able to conclude that our internal control over financial reporting will be effective in future years, and that our internal controls can prevent fraud and corruption. If in future years we fail to maintain effective internal controls in accordance with the Sarbanes-Oxley Act or other applicable laws, or if we are found not to be in compliance with applicable laws, we could face investigations or other enforcement actions, be subject to criminal, administrative, and civil penalties and other remedial measures, suffer a loss of investor confidence in the reliability of our consolidated financial statements, which in turn could negatively impact the trading price of our ADSs, and could result in lawsuits being filed against us by our stockholders, lead to adverse impact on our business, or otherwise harm our reputation. Any decline in the Taiwan economy, downturn in the global ICT and technology industry, geopolitical uncertainty or slowdown in global economic growth may materially and adversely affect our financial condition, results of operations and prospects. Our business depends on economic growth, and we conduct our major operations and businesses in Taiwan. We cannot assure you that the economic conditions in Taiwan will continue to improve in the future, and any uncertainty or further deterioration in Taiwan’s economic conditions could have a material adverse effect on our financial condition and results of operations. In addition, Taiwan’s economy is highly dependent on the global technology industry. Although we have adopted a variety of measures to mitigate risks associated with the global ICT and technology industry, any downturn in the global ICT and technology industry, including but not limited to, global supply chain disruption, tariff increases and trade barriers, interest rate fluctuation, inflation or deflation and changes in economic, fiscal and monetary policies in major economies, exchange rate fluctuation and risk of recession may have a material adverse effect on Taiwan’s economy, which in turn could adversely affect the demand for our products and services. Furthermore, we continue to face a wide range of macroeconomic and geopolitical risks, including rising tensions, armed conflicts, civil unrest and political instability in various regions. These situations have resulted, or may result, in greater economic volatility as well as increased costs related to cybersecurity and network maintenance. Uncertainty regarding future monetary policy across major economies as well as broader volatility and valuation dynamics in global financial markets has been and may continue to be a key consideration for investors. In addition, concerns over a broader global economic downturn, heightened frictions between the U.S. and Mainland China, and ongoing challenges related to climate change may further contribute to turbulence in international financial markets, Taiwan’s capital markets, and the global technology industry. Although we conduct most of our operations and generate most of our revenues in Taiwan, a slowdown in global economic growth could still materially and adversely affect our financial condition, operating results and future prospects. We are subject to litigation or other legal proceedings that could expose us to substantial liabilities. We are from time to time involved in various litigation, arbitration or administrative proceedings in the ordinary course of our business. Any such claims, whether with or without merit, asserted or threatened, could be time-consuming and expensive to defend and could divert our management’s attention and resources. See “Item 4. Information on the Company—B. Business Overview—Legal Proceedings.” We cannot predict the outcome of these proceedings, and we cannot assure you that if a judgment is rendered against us in any or all of these proceedings, our financial condition and results of operations would not be materially and adversely affected. 10 Our operation may be interrupted, and our expansion may be limited, by power or utility shortage. Our operation requires a continuous supply of utilities such as electricity and water. Interruptions of electricity or water supply could result in temporary shutdowns of our operation. We may from time to time suffer power outages or surges in Taiwan caused by difficulties encountered by the public utility or other power consumers on the same power grid. Some of these have resulted in interruptions to our operations. Any major suspension, shortage or termination of electricity supply could significantly harm our business, results of operations and financial condition. If we are unable to secure reliable and uninterrupted supply of electricity in Taiwan, our services may be interrupted. Furthermore, we may suffer from a shortage of water in Taiwan, and we may need to incur additional costs and expenses to respond to such shortages in order to maintain our operations and services. Such incremental costs may affect our profitability and results of operations. Our success depends on our ability to attract and retain quality personnel. In response to the rapidly evolving industry in which we operate, we need to continuously attract and retain skilled technical personnel, while also relying on the continued service of our executive officers. Our business could suffer if we fail to attract qualified personnel or adequately replace them. In particular, we cannot afford to lose any of our talents as attracting qualified professionals is increasingly difficult. Furthermore, any expansion by industry players may intensify the demands for qualified and experienced personnel in the Taiwan telecommunications industry. All three telecommunications operators in Taiwan, including us, are expanding the ICT‑related businesses in areas such as cybersecurity, cloud, AIoT, IDC, AI and big data analytics, and may increase their workforce as part of this expansion. In addition to competition from telecom operators, broader technology companies, including computer design firms and hardware manufacturers, are also actively recruiting information technology and engineering personnel, further intensifying the competition for qualified talent. We may also need to increase employee compensation to attract and retain personnel, which could lead to higher operating costs. We cannot assure you that the loss of the services of any of these personnel would not disrupt our business and operations and materially and adversely affect the quality of our services or harm our reputation. We face substantial political risks associated with doing business in Taiwan, particularly due to domestic political events and the tense relationship between the ROC and the People’s Republic of China, which could adversely affect our financial condition and results of operations. Our principal executive offices and substantially all of our assets are located in Taiwan, and substantially all of our revenues are derived from our operations in Taiwan. Accordingly, our business, financial condition and results of operations and the market price of our common shares and the ADSs may be affected by changes in ROC governmental policies, taxation, inflation or interest rates and by social instability and diplomatic and social developments in or affecting Taiwan, which are outside the control of us. Taiwan has a unique international political status. Since 1949, Taiwan and Mainland China have been separately governed. The People’s Republic of China, or PRC, claims that PRC is the sole legitimate government in China, and Taiwan is a part of China. In addition, the PRC government has refused to renounce the use of military force to gain control over Taiwan. Past developments in relations between the ROC and the PRC have on occasion depressed the market prices of the securities of companies in the ROC. Relations between the ROC and the PRC and other factors affecting military, political or economic conditions in Taiwan could materially and adversely affect our financial condition and results of operations, as well as the market price and the liquidity of our securities. In addition, the complexities of the relationship between the ROC and PRC require companies involved in cross-strait business operations to carefully monitor their actions and manage their relationships with both ROC and PRC governments. We cannot assure you that we will be able to successfully manage our relationships with the ROC and PRC governments for our cross-strait business operations, which could have an adverse effect on our ability to expand our business and conduct cross-strait business operations. Stockholders may have more difficulty protecting their interests under the laws of the ROC than they would under the laws of the U.S. Our corporate affairs are governed by our Articles of Incorporation, the TMA, and by the laws governing corporations incorporated in the ROC. See “—Extensive regulation of our industry may limit our flexibility to 11 respond to market conditions and landscape, and our business and revenues may suffer.” The rights of stockholders and the responsibilities of management and the members of the board of directors of Taiwan companies are different from those applicable to a corporation incorporated in the U.S. For example, controlling or major stockholders of Taiwan companies do not owe fiduciary duties to minority stockholders. As a result, holders of our common shares and ADSs may have more difficulties protecting their interests in connection with actions taken by our management or members of our board of directors than they would as public stockholders of a United States corporation. Our actual financial results may differ materially from our published guidance. Starting in 2013, we continued to voluntarily publish our operating results guidance on an annual basis in accordance with the Taiwan IFRSs. We may from time to time update our operating results guidance after evaluating the effects of any changes to the estimates and assumptions that we used to calculate the projections of our operating results. Our projections are based on a number of estimates and assumptions that are inherently subject to significant uncertainties and contingencies, including the risk factors described in this annual report. In particular, our projections are forward-looking statements that are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections were based will not materialize or will vary significantly from actual results, and such variances will likely increase overtime. Although our operating income, net income and EPS exceeded our expectations in 2025, our financial results will depend on future developments, which are highly uncertain and cannot be predicted. Our results of operations and financial condition under Taiwan IFRSs may differ materially from our reported results of operations and financial condition under IFRSs. While we have adopted Taiwan IFRSs for ROC reporting purposes, we adopt IFRSs for certain filings with the SEC, including our annual reports on Form 20-F. Taiwan IFRSs differs from IFRSs in certain significant respects, including to the extent that any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC. Furthermore, the dividends for 2025 that are expected to be declared at our 2026 annual general stockholders’ meeting are calculated based on Taiwan IFRSs. Risks Relating to Ownership of Our ADSs and Common Shares The value of your investment may be reduced by future sales of our ADSs or common shares by us, by the government of the ROC or by other stockholders. The government may continue to sell our common shares. Sales of substantial amounts of ADSs or common shares by the government or any other stockholder in the public market, or the perception that future sales may occur, could depress the prevailing market price of our ADSs and common shares. The market value of your investment may fluctuate due to the volatility of, and government intervention in, the Taiwan securities market. Our common shares are traded on the Taiwan Stock Exchange, or the TWSE, which has a smaller market capitalization and is more volatile than the securities markets in the U.S. and many European countries. The market value of our ADSs may fluctuate in response to the fluctuation of the trading price of our common shares on the TWSE. The TWSE has experienced substantial fluctuations in the prices and trading volumes of listed securities, and there are currently limits on the range of daily price movements. In 2025, the TWSE Index reached a low of 17,391.76 on April 9, 2025, and peaked at 28,963.60 on December 31, 2025. On April 1, 2026, the TWSE Index closed at 33,174.82. The TWSE has experienced certain problems, including market manipulation, insider trading and payment defaults. The recurrence of these or similar problems could have a material adverse effect on the market price and liquidity of the securities of Taiwan companies, including our ADSs and common shares, in both the domestic and the international markets. In response to declines and volatility in the securities markets in Taiwan, the government of the ROC formed the National Financial Stabilization Fund to support these markets through open market purchases of shares in Taiwan companies from time to time. The details of the transactions of the National Financial Stabilization Fund 12 have not been made public. In addition, the government’s Labor Insurance Fund and other funds associated with the government have in the past purchased, and may from time to time purchase, shares of Taiwan companies listed on the TWSE or other markets. As a result of these activities, the market price of common shares of Taiwan companies may have been and may currently be higher than the prices that would otherwise prevail in the open market. Market intervention by government entities, or the perception that such activity is taking place, may take place or has ceased, may cause sudden movements in the market prices of the securities of Taiwan companies, which may affect the market price and liquidity of our common shares and ADSs. We may be sanctioned or the network establishment approval granted to us may be abolished for violations of limits on foreign ownership of our common shares, and these limits may materially and adversely affect our ability to obtain financing. According to the TMA, which was effective from July 1, 2020 (excluding certain articles regarding frequency allocation that was set effective from November 1, 2020), the total amount of our shares directly held by foreigners shall not exceed 49%, and the total amount of our shares directly and indirectly held by foreigners shall not exceed 60%. As of April 1, 2026, foreign direct holdings of our outstanding share capital was at approximately 17.69%. If we fail to comply with the applicable foreign ownership limitations, the network establishment approval granted to us may be abolished. We cannot predict the manner in which the NCC will exercise its authority over us in the case of a violation, or whether the NCC will lower the foreign ownership cap at any time. If we are deemed to be in violation of our foreign ownership limitations, any consequences arising from such violation may materially and adversely affect us. Moreover, since we are unable to control ownership of our common shares or ADSs representing our common shares, and we have no ability to stop transfers among stockholders, or force particular stockholders to sell their shares, we may be subject to monetary fines, or the network establishment approval granted to us may be abolished, even if there is no fault of our own. In that event, our business could be disrupted, our reputation could be damaged and the market price of our ADSs and common shares could decline. These limitations may also materially and adversely affect our ability to obtain adequate financing to fund our future capital requirements or to obtain strategic partners, and alternate forms of financing may not be available on terms favorable to us, or at all. Restrictions on the ability to deposit our common shares into our ADS program may adversely affect the liquidity and price of the ADSs. The ability to deposit our common shares into our ADS program is restricted by ROC law, under which no person or entity, including you and us, may deposit our common shares into our ADS program unless the Securities and Futures Bureau has not objected within a prescribed period following the filing with it of an application to do so, except for the deposit of the common shares into our ADS program and for the issuance of additional ADSs in connection with: •distribution of share dividends or free distribution of our common shares; •exercise of preemptive rights of ADS holders applicable to the common shares evidenced by our ADSs in the event of capital increases for cash; or •purchases of our common shares in the TWSE by the investor directly or through the depositary and delivery of such common shares or delivery of our common shares held by such investors to the custodian for deposit into our ADS program, subject to the following conditions: (a) the depositary may accept deposit of those shares and issue the corresponding number of ADSs with regard to such deposits only if the total number of ADSs outstanding after the deposit does not exceed the number of ADSs previously approved by the Securities and Futures Bureau, plus any ADSs issued pursuant to the events described above; and (b) this deposit may only be made to the extent previously issued ADSs have been cancelled. As a result of the limited ability to deposit common shares into our ADS program, the prevailing market price of our ADSs on the New York Stock Exchange, or NYSE, may differ from the prevailing market price of the equivalent number of our common shares on the TWSE. 13 You will be more restricted in your ability to exercise voting rights than the holders of our common shares, which may diminish your influence over our corporate affairs and may reduce the value of your ADSs. Holders of American depositary receipts evidencing our ADSs may exercise voting rights with respect to the common shares represented by these ADSs only in accordance with the provisions of our deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our common shares, the depositary bank will, as soon as practicable thereafter if requested by us in writing, mail to ADS holders the notice of the meeting sent by us, voting instruction forms and a statement as to the manner in which instructions may be given by the holders. Generally, ADS holders will not be able to exercise voting rights attached to the underlying securities on an individual basis. Under the deposit agreement, the voting rights attached to the underlying securities must be exercised as to all matters subject to a vote of stockholders collectively in the same manner, except in the case of an election of directors. The election of our directors is by means of cumulative voting. In the event the depositary does not receive voting instructions from ADS holders in accordance with the deposit agreement, our chairman or his or her designee will be entitled to vote the common shares represented by the ADSs in the manner he or she deems appropriate at his or her discretion, which may not be in your interest. Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings. We may from time to time distribute rights to our stockholders, including rights to acquire our securities. Under the deposit agreement, the depositary will not offer you those rights unless the distribution to ADS holders of both the rights and any related securities are either registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings. If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights. Changes in exchange controls that restrict your ability to convert proceeds received from your ownership of ADSs may have an adverse effect on the value of your investment. Your ability to convert proceeds received from your ownership of ADSs depends on existing and future exchange control regulations of the ROC. Under the current laws and regulations of the ROC, an ADS holder or the depositary, without obtaining further approvals from the Central Bank of the ROC (Taiwan) or any other governmental authority or agency of the ROC, may convert NT dollars into other currencies, including U.S. dollars, in respect of: •the proceeds of the sale of common shares represented by ADSs or received as share dividends with respect to the common shares and deposited into the depositary receipt facility; and •any cash dividends or distributions received from the common shares represented by ADSs. In addition, the depositary may also convert into NT dollars incoming payments for purchases of common shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the common shares underlying your ADSs and become a holder of our common shares, you may convert them into NT dollars subscription payments for rights offerings. The depositary may be required to obtain foreign exchange approval from the Central Bank of the ROC (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of new common shares. Although it is expected that the Central Bank of the ROC (Taiwan) will grant approval as a routine matter, required approvals may not be obtained in a timely manner, or at all. Under the ROC Foreign Exchange Control Law, the Executive Yuan of the ROC may, without prior notice but subject to subsequent legislative approval rendered within ten days from such imposition, impose foreign 14 exchange controls or other restrictions in the event of, among other things, a material change in domestic or international economic conditions which might threaten the stability of the domestic economy in Taiwan. You are required to register with the TWSE and appoint several local agents in Taiwan if you withdraw common shares from our ADS facility and become our stockholder, which may make your ownership burdensome. If you are a non-ROC person and wish to withdraw common shares represented by your ADSs from our ADS facility and hold those common shares, you are required under the current laws and regulations of the ROC to appoint an agent, also referred to as a tax guarantor, in the ROC for filing tax returns and making tax payments. A tax guarantor must meet certain qualifications set by the Ministry of Finance of the ROC and, upon appointment, becomes a guarantor of your ROC tax obligations. If you wish to repatriate profits derived from the sale of withdrawn common shares or cash dividends or interest on funds derived from the withdrawn common shares, you will be required to submit evidence of your appointment of a tax guarantor and the approval of the appointment by the ROC tax authorities. You may not be able to appoint and obtain approval for a tax guarantor in a timely manner. In addition, under the current laws of the ROC, you will be required to be registered as a foreign investor with the TWSE for making investments in the ROC securities market prior to your withdrawal and holding of common shares represented by the ADSs. You will be required to appoint a local agent in Taiwan to, among other things, open a securities trading account with a local securities brokerage firm and a bank account to remit funds, exercise stockholders’ rights and perform other functions as holders of ADSs may designate. You must also appoint a local bank to act as custodian for handling confirmation and settlement of trades, safekeeping of securities and cash proceeds and reporting and declaration of information. Without the relevant registration and appointment of the local agent and custodian and the opening of a securities trading account and bank account, you will not be able to hold, subsequently sell or otherwise transfer our common shares withdrawn from the ADS facilities on the TWSE.

A. History and Development of the Company Our legal and commercial name is Chunghwa Telecom Co., Ltd. We were officially established on July 1, 1996 as part of the privatization efforts by the government of the ROC and operate under the Statute of Chunghwa Telecom Co., Ltd. Prior to our formation, we operated as a business unit of the Directorate General of Telecommunications, which was the predecessor of the NCC. The common shares of the Company have been listed on the TWSE under the trading code “2412” since October 2000 and its ADSs have been listed on the NYSE under the symbol “CHT” since July 2003. We were privatized as a result of a secondary ADS offering and concurrent domestic auction of our common shares on August 12, 2005, as the ownership by the government of the ROC was reduced to less than 50%. The privatization has enabled us to develop our business and respond to changing market conditions more rapidly and efficiently. Today, we are the largest full telecommunication service provider in Taiwan. Our principal executive offices are located at 21-3 Xinyi Road, Section 1, Taipei 10048, Taiwan, ROC, and our telephone number is (886) 2-2344-5488. Our website address is at: https://www.cht.com.tw. The information contained on our website is not incorporated herein by reference and does not constitute part of this annual report. Our agent for service of process in any suit or proceeding arising out of or relating to our shares, ADSs, American depositary receipt, or ADR, and deposit agreement in the U.S. is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168. We are the largest telecommunications service provider in Taiwan and one of the largest in Asia in terms of revenues. As an integrated telecommunications service provider, our principal services include: mobile services, fixed-line services, ICT business, sales and other services. We accomplished our strategic transformation in 2022 and started to operate under the new customer-centric structure to enhance our performance. In particular, our Consumer Business Group strategically focuses on individual, home-centric and family services to provide better customer experiences. Our Enterprise Business Group consolidates and integrates our enterprise business-related services to create synergy and enhance our comprehensive ICT services. Our International Business Group focuses on serving our international customers and expanding our overseas business. 15 We enjoy leading positions across a number of areas in terms of both revenues and subscribers. We are Taiwan’s largest service provider in fixed communications and mobile communications. As for the IPTV service, our MOD service is the largest video platform in Taiwan in terms of the number of customers. In 2025, our revenues were NT$236.1 billion (US$7.5 billion), our consolidated net income was NT$40.5 billion (US$1.3 billion) and our basic earnings per share was NT$4.99 (US$0.16). In 2025, we made capital expenditures totaling NT$27.7 billion (US$0.9 billion). See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a detailed discussion of our capital expenditures. Competitive Strengths We believe that our primary competitive strengths are: •our position as an integrated, full-service telecommunications provider as well as ICT service provider and our premium brand and broad customer base in Taiwan; and •our capital resources and leading technology capabilities. We are an integrated full-service telecommunications provider as well as ICT service provider and have premium brand and broad customer base in Taiwan. We are the largest telecommunications service provider in Taiwan with a leading position in fixed communications services, mobile communications services, internet services, and video services. We are also a major ICT service provider in areas such as cybersecurity, cloud, AIoT, IDC and big data analysis. Broad range of communications products and services. We are confident with our ability to provide an attractive and comprehensive range of both telecommunications services and ICT total solutions to our business customers. In addition, we are able to offer innovative and customized ICT services and attractive tariff packages to deliver customer-centric services. Broad network coverage. In order to provide higher bandwidth services for our customers, we have been constructing our fiber to the x, or FTTx, network since 2003. We have successfully migrated many of our customers to higher-speed FTTx service. As of December 31, 2025, network coverage of FTTx with speeds of 1 Gbps and higher was approximately 94.3%. In addition, our 4G/5G mobile communications networks provide nationwide coverage. Our large mobile spectrum allocation, together with our extensive network coverage, positions us well for the continued expansion of our mobile services in Taiwan. We are also continuing to build our Wi-Fi network to offload mobile network capacity in residential and public areas with high subscriber density and usage, such as business districts, transportation hubs, airports and convenience stores. We aim to provide seamless broadband connections to better serve our customers. Brand awareness, distribution channels and customer service. Our brand, “Chunghwa Telecom,” has a reputation for quality, reliability and sustainability. We serve our large customer base through our extensive customer service network in Taiwan. See “—B. Business Overview—Marketing, Sales and Distribution—Sales and Distribution.” Our extensive sales and distribution channels help us attract new customers and develop new business opportunities. We continuously enhance user experience across different channels. We integrate our online store and offline channels, with our big data capability, to accelerate the development of our Online-to-Offline business. To enhance customers’ online experience, we provide customized online purchase processes by leveraging our capability to analyze big data, and accurately analyze customer preferences and behaviors, and target different customer groups for implementing accurate marketing initiatives to improve sales success rates and reduce marketing costs. Customers can apply for various services online through websites or apps, and make queries with us in real time. We also provide an online shopping platform, where consumers can purchase telecom tariff plans, smartphones and smart home appliances at the same time. In addition, customers can also order online and enjoy quality services at designated offline stores to save waiting time. 16 In 2025, we obtained several international awards which recognized our strong operational capabilities, service quality and ESG practices. We remained the only Taiwanese telecom operator in Newsweek’s “World’s Most Trustworthy Companies 2025” list. We were once again included in the Dow Jones Sustainability World Index and ranked as one of the top-rated companies in the global telecom industry, and listed in the S&P Sustainability Yearbook 2025 for the for the 3rd consecutive year. We were also the only telecom company reaffirmed by S&P Global Ratings with the highest long-term issuer credit rating (AA). Furthermore, we were not only the first telecom operator in Taiwan to be upgraded to the highest MSCI ESG ‘AAA’ Rating, but also secured The Asset’s Jade Award for Corporate Sustainability Leadership for the fifth consecutive years. In addition to winning the Glotel Award for Digital Infrastructure Innovation alongside with NTT, Chunghwa Telecom stood out as the only winner from Taiwan to secure the Silver AI Innovation Award at the World Communication Awards (WCA). Professional management and outstanding talents. Our management and employees have extensive operating experience and technical knowledge for the future growth of emerging businesses. We also believe we will continue to attract and retain high-quality information technology and marketing talents. We have the capital resources and technology to retain our leading position. Strong capital structure. We have great financial resources in Taiwan. Our low debt-to-equity capital structure, together with our strong operating cash flows, provides us with the flexibility and resources to invest in capital-intensive and growing businesses. We started to construct our 5G base stations in the first half of 2020 and continue to enhance our existing 4G/5G mobile broadband networks, our expansion of FTTx broadband access services, IP-based MOD/Hami Video services, fixed-line/mobile value-added services, or VAS, ICT-related services and service platforms. We also deploy Narrowband-IoT and LTE Cat-M1 networks for IoT applications. Furthermore, we signed an exclusive distribution agreement for OneWeb Low Earth Orbit, or LEO, and SES Medium Earth Orbit, or MEO, satellite services in 2023 and 2024, respectively. In 2025, we partnered with Astranis, a U.S. company, to launch Taiwan’s first dedicated communication satellite, which will enhance the resilience of our communication network. Our strategy is to invest in or acquire emerging growth companies to further expand our business to retain our leading position in the future, such as cybersecurity, IDC/cloud and AIoT strategic businesses. We will continue to construct facilities of data center and cloud services and will cooperate with international public cloud service providers, including Google Cloud Platform, or GCP, Amazon Web Service, or AWS, and Microsoft Azure, to deliver hybrid cloud solutions to enterprise customers in order to be a leading IDC and multi-cloud service provider in Taiwan. In addition, we will continue to construct new submarine cables linking the U.S. and Asia-Pacific region, as well as expand the bandwidth of outbound connections and enhance network strength to attract more OTT services providers to increase their investments in Taiwan. Advanced network technology. By the end of 2025, more than 94.5% of households in Taiwan can enjoy ultra-fast connectivity with our FTTH network. We will still expand FTTH network coverage of households in 2026, based on the requirement of ultra-fast connectivity service in Taiwan. In 2025, we also continued to enhance our 4G/5G mobile broadband networks. Our investment in network infrastructure places us in a position to capture a significant share of the internet and high-speed data transmission market. We have developed Multi-access Edge Computing, or MEC, technology and successfully launched it to the market, enabling us to maintain a market-leading position in the 5G private network. Research and development expertise. In 2025, our research and development expenses accounted for 1.8% of our revenues. See “Item 5. Operating and Financial Review and Prospects—C. Research and Development, Patents and Licenses” for descriptions about areas of our research and development. We believe our focus on research and development will allow us to efficiently develop and deploy new technologies and services ahead of our competitors. Business Strategies We operate under three strategic pillars—Digital Resilience, Smart Empowerment, and a Sustainable Future—which guide the development of our products, services and operational priorities. These pillars are implemented in accordance with our internal guiding principle of “AI Everywhere,” which reflects our focus on integrating artificial intelligence across our technology offerings and internal processes. Our business strategy 17 emphasizes the provision of secure, reliable and trustworthy ICT services, supported by three principal growth areas: technology capability development, business expansion and diversification of markets and partnerships. Our operations are grounded in core values that include Integrity, Customer Trust, Accountability and Innovation, and are supported by a management philosophy that prioritizes streamlined, pragmatic and intelligent operations. We seek to maintain operational resilience and foster long-term stakeholder confidence, while pursuing sustainable value creation for our customers, business partners, shareholders and employees. In response to ongoing developments in artificial intelligence and digital transformation, we position ourselves as both a service enabler and collaborative solution provider for customers across various industries. Our solutions are designed to support customers’ digitalization initiatives and their transition toward net-zero sustainability objectives. Through these activities, we aim to support ESG initiatives and contribute to broader efforts to enhance long-term economic resilience and sustainability. Consistent with our strategic objectives, we have developed the following business strategies: Drive expansion and growth based on our core strengths We endeavor to maintain our strong market position in telecommunication business and seek to expand the scope of our business beyond network services by offering service platforms and VAS to capture new opportunities and generate revenue growth, such as IoT platforms and cloud platforms. We also continue to enhance our MOD/OTT service video platform, which offers digital contents, live broadcasting and subscription video on demand, or SVoD, services. Broadband services: We strive to maintain our broadband market share and enjoy the increase of ARPU for our FTTx internet services. We believe customer demands owing to digital transformation will continue and we will grasp those opportunities from the trend. Over the years, we are continuously encouraging more migration of our FTTx subscribers to higher-speed FTTx service to further enhance our ARPU. We continue to build our FTTH infrastructure, and we believe these efforts will help us maintain our advantages in broadband services. A high-quality fixed broadband network is also essential for our high-definition MOD services. Video services: We provide attractive and user-centric entertainment experience for our customers by offering 4K high-quality videos, self-selected channel mechanisms and multi-screen options on MOD and 5G service on Hami Video. We also expect to further expand our contents and applications to serve more customers by enhancing the partnerships with our key content providers. In 2025, we accelerated the growth of our video business by enhancing Hami Video’s content portfolio and making strategic investments in collaboration with leading global and domestic production teams. Leveraging innovative technologies such as low‑latency and multi‑angle broadcasting, along with AI‑driven intelligent search and personalized recommendations, we further elevated the overall viewing experience for users. Moving forward, we will continue the successful strategies to further expand our video business. Mobile Communications: We successfully launched 5G services in Taiwan in 2020. Our strategy for mobile services includes the following initiatives: •with a high quality 5G network, integrating digital life value-added services and innovative offerings to boost 5G penetration rate and ARPU; •reallocating resources to drive mobile subscriptions toward premium plans; •maximizing 5G subscriber numbers by encouraging 5G migration plans with incentives such as Hami Points, phone discounts and bonus data; •leveraging big data analytics to identify and target high-potential subscribers; •offering a variety of plans to cater to different needs; and •strengthening our technology capabilities to develop advanced 5G solutions and AIoT service. 18 ICT business: Leveraging our core telecommunication infrastructure and technology capabilities to expand ICT services at home and abroad, we aim to become a leading provider of smart life and an enabler of digital economy as well as to become the most valuable and trustworthy ICT company. In order to drive the development of multiple emerging ICT services such as smart city, smart manufacturing, smart healthcare, smart transportation, and smart surveillance, we focus on high-quality platforms, building customer-centric ecosystems with key partners, and making strategic investments, mergers and acquisitions. With the strength and reliability of our technologies and services, we will gain a competitive edge to continue expanding our ICT business in the future. Emphasize quality of service and customer satisfaction Quality of service is critical in attracting and retaining customers and enhancing our long-term profitability. In order to continuously enhance and improve the quality of our services, we have, in addition to the quality assurance function of our regular operating units, established a number of dedicated task forces to monitor our network performance. Our senior management sets our quality evaluation criteria and regularly reviews the quality of our performance. To ensure customer loyalty and achieve customer-centric spirit with high-quality services, we consistently focus on and invest in the optimization of the entire customer journey. In terms of network quality, we constantly strive for precise expansion and create seamless via fixed networks, mobile networks and Wi-Fi, to cater to high-speed Internet access demand. We develop new data-driven approaches to strengthen customer engagement and retention to enhance customer stickiness. Through accurate labeling and big data analytics of customer intentions, we push forward data-driven service process optimization and target customer segment marketing and caring. We also establish online and offline multiple service networks for customer service touchpoints and provide 7x24 all-around professional services and feedback channels to enhance customer experience and satisfaction. Improve operational and cost efficiency We continue to focus on cost control and improve our operational and cost efficiency by leveraging our IT capabilities and cloud resources. The key initiatives implemented in recent years include: •strengthening digital capabilities: leveraging AI and big data technologies to build smart and automated services, optimize customer experience and speed up processes; •optimizing business operations support system service efficiency: migrating information systems into the cloud, sharing information technology resources; and •expanding usage of information resources: building up a centralized, digitalized and specialized procurement process to enhance cost efficiency. In particular, we primarily use and integrate Gen AI technology in our operation to optimize our cost efficiency in the following ways: •smart customer support: we have adopted GenAI-powered Copilots. These systems not only handle inquiries but also assist human agents with real-time knowledge retrieval and automated form completion, significantly reducing handling time, enhancing accuracy, lowering agent workload, and improving overall service efficiency and customer satisfaction. •network operations and maintenance: we utilize advanced AI models to predict potential optical interface degradation trends, proactively diagnoses the root causes of end-to-end network data service problems, detects potential issues and intervenes at an early stage, which together enhance our overall operational performance. •software engineering: we have broadly adopted AI coding assistants (Copilots) across our development teams in generating code, writing test cases, and creating documentation, thereby notably accelerating our software development lifecycles and enhancing productivity. •smart energy management system: we have independently developed an AI-powered smart energy management system to predict air conditioning energy consumption and adjust temperature control strategies to optimize energy savings in multiple data centers. 19 •incorporate AI and machine learning into our operations through partnerships with mobile network equipment providers: we use AI to predict network load and automatically switch the network to deep sleep mode without affecting user experience. By leveraging AI technologies, we have achieved significant cost savings while enhancing operational efficiency across various domains. Our long-term goal is to optimize our capital expenditure by focusing on investing in innovative products and services with attractive return profiles. We continue the construction of our fiber-based fixed-line and mobile network to increase the network bandwidth and enhance operational efficiencies by deploying advanced technologies as well as optimizing network architecture and infrastructure upgrades. Expand our business through alliances, acquisitions and investments We continuously expand our business in growth areas and proactively deploy new technologies and services through alliances, acquisitions and investments. We believe that our experience, operational scale and large customer base make us an attractive ally for other service providers. Alliances. In 2024, we maintained strategic collaborations with global leading enterprises to diversify our business and enhance service capabilities. In January 2024, we entered into a two-year strategic memorandum of understanding, or MOU, with Fujitsu to jointly develop an IOWN-based All-Photonics Network (APN) in Taiwan. In August 2024, pursuant to our October 2023 MOU with NTT Corporation, we launched the world’s first international IOWN APN between Taiwan and Japan, advancing the IOWN initiative. Based on the cross-border IOWN APN, we demonstrated the real-time joint performance of "Cho-Kabuki" in the two sides of Expo 2025 Osaka and Taipei in May 2025, as well as the three major exhibits at the NTT R&D Forum, namely VLM AI training verification, Smart Factory AI inference, and Virtual Production in November 2025. We are the first telecom operator in Taiwan to participate in the Groupe Speciale Mobile Association (GSMA) Open Gateway initiative. As of December 31, 2025, we had developed nine 5G Network Open Application Programming Interfaces (APIs), covering innovative applications such as financial fraud prevention, location‑based services, quality‑of‑service management, and 5G edge computing. In 2025, we also partnered with Microelectronics Technology Inc. (MTI) to secure its place as one of the seven global recipients of the U.S. National Telecommunications and Information Administration (NTIA) Notice of Funding Opportunity (NOFO2) program, aiming to advance Taiwan’s 5G Open RAN technologies onto the international stage. Acquisition and Investments. We have focused our acquisition strategy on making strategic acquisitions of companies that we believe to be fulfilled our long-term strategic goals. We have focused our investment strategy on the development of new businesses and the enhancement of our operational efficiency, especially the aspects of AI, 5G and ICT services. Recently we have entered into the following notable transactions: We strengthen our advantages in the public cloud business and generative AI technology through investing in iKala Global Online Corp., or iKala, in February 2024, from which we can further leverage its leading GCP cloud business, cloud SaaS services, such as MarTech, and generative AI technology. Under the vision of “AI-Ready, Future-Ready”, we established a wholly-owned subsidiary, CHT InventAI Co., Ltd. (“InventAI”) in October 2025, focusing on providing AI-driven DeepFlow (intelligent analytics) and DeepVoice (customer insights) solutions to clients across a wide range of sectors, including telecommunications, financial services, manufacturing, transportation, healthcare and government. To enhance the provision of ICT services to Taiwanese enterprises and local businesses in Malaysia, we established Chunghwa Telecom Malaysia Sdn. Bhd. (“CHTM”) in June 2025 through our Singapore subsidiary, which has long-standing operational expertise and established regulatory advantages across the ASEAN region, to further advance our presence, collaboration and development in the Southeast Asian market. 20 We approved the establishment of Intelligent Video Surveillance (“IVS”) subsidiary led by our internal incubation team in 2025. Leveraging its proprietary AI video technologies and established operational expertise, this subsidiary aims to capture AI video opportunities, maximize cross-group synergies, and drive sustainable revenue growth. Going forward, we will focus on driving the growth of the digital economy and foster innovation across key businesses sectors. We will continue to explore opportunities in equity investments and strategic acquisitions that enhance our core competitiveness and align with our long-term strategic goals. By cooperating with other companies and leveraging our advantages, we strive to gain market share in the AI, 5G, AIoT, cybersecurity, IDC/Cloud Computing and cultural media industry. Furthermore, we will continue to explore opportunities to strengthen our cooperation with companies in the ASEAN countries, including in telecommunication business and smart city ICT businesses. Maintain focus on maximizing stockholder value We commit to maximizing stockholder value and intend to maintain a sustainable dividend policy. Under the ROC Company Act, companies are allowed to distribute special cash dividends from capital surplus. In addition, the accumulated legal reserve that we had set aside in previous years has amounted to the aggregate par value of our outstanding share capital. Therefore, according to relevant regulations, we are not required to appropriate profits to our legal reserve starting from 2015. With the approval of our board of directors in February 2026, our payout ratio was 104.20% in 2025 earnings. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information.” B. Business Overview Our Principal Lines of Business We have three segments that we operate and manage as strategic business units: consumer business, enterprise business and international business. Consumer Business Our consumer business strategically focuses on individual- and home-centric businesses, such as mobile, fixed broadband, Wi-Fi, IPTV (MOD) and OTT services. To create value for our customers and provide better customer experiences, we offer FTTx and ADSL services and enhance customer internet surfing experiences through our value-added services that leverage our Wi-Fi advantage as well as IPTV (MOD) and OTT (Hami Video) offerings. We have the largest mobile subscriber base in Taiwan with solid network performance. We are the largest internet service provider, or ISP, and also the largest domestic video service provider in Taiwan. Enterprise Business Our enterprise business focuses on creating synergy and enhancing our integrated ICT services. It also promotes the development of emerging businesses, which focus on IDC, cloud, cybersecurity, 5G+AIoT, big data, AI, enterprises’ digital transformation and system integration. We have a large customer base of high-quality enterprises, including those who do both business-to-business and business-to-consumer business. Our enterprise business team identifies market insights to provide a variety of enterprise business-related services to satisfy our customers. We are the largest IDC services provider in Taiwan, with an IDC market share of more than 70%, as well as the leading cybersecurity service provider in the market. International Business Our international business focuses on serving our international customers. Our international customers include Taiwanese companies seeking global expansion, large Taiwanese enterprises located in foreign countries, foreign companies and multinational enterprises. As the largest submarine cable service provider in Taiwan, together with our international submarine cable stations, overseas subsidiaries, strategic partners and alliances, we are well 21 positioned to help our customers to capture global market opportunities by providing our diversified product portfolio and service offerings, including fixed-line services (international voice, data, and value-added services, etc.), mobile services (roaming and global IoT services, etc.) and ICT services (IDC, cloud, cybersecurity, ICT integrated solutions services, etc.). Service and Product Offerings As an integrated telecommunications service provider, our principal services include: mobile services, fixed-line services, ICT business, sales and other services. Mobile Services We are Taiwan’s largest mobile services provider in terms of both revenues and subscribers. In 2023, we generated revenues of NT$65.0 billion, or 29.1% of our total revenues, from mobile services. In 2024, we generated revenues of NT$67.0 billion, or 29.1% of our total revenues, from mobile services. In 2025, we generated revenues of NT$69.0 billion (US$2.2 billion), or 29.2% of our total revenues, from mobile services. The growth in mobile service revenues was primarily driven by an increase in postpaid subscriber numbers and upsell resulting from a steady 5G migration in 2025, as well as growth in value-added service revenues. We drove 5G migration and 5G penetration rate in a steady manner. In addition, as we focus on creating value for subscribers, our postpaid ARPU (excluding IoT) per month increased from NT$553 in 2024 to NT$561 in 2025, and our 5G penetration among smartphone users was 46.4% by the end of 2025. Year Ended December 31 2023 2024 2025 NT$ NT$ NT$ Postpaid ARPU(1) for mobile service 547 553 561 (1)Postpaid ARPU is calculated by dividing the consolidated mobile service revenues (excluding IoT and prepaid revenues) by the average number of postpaid subscribers during the month (excluding IoT). We remain the largest mobile operator in Taiwan in terms of revenues and number of subscribers. We had approximately 11.2 million mobile subscribers, excluding IoT SIMs, and a market share of approximately 39.7% in terms of total mobile customers (excluding IoT) and approximately 40.8% in terms of total mobile services revenues in Taiwan as of December 31, 2025. In October 2013, we obtained a 4G mobile broadband services spectrum of 10MHz paired spectrum in the 900MHz frequency band and 25MHz paired spectrum in the 1800MHz frequency band. We paid NT$39.1 billion to the government for the spectrum. The license is valid until December 31, 2030. We launched 4G mobile broadband services in May 2014. In December 2015, we obtained an additional spectrum for 4G mobile broadband services of 30MHz paired spectrum in the 2500MHz and 2600MHz frequency bands, and we paid NT$10.0 billion to the government. The license is valid until December 31, 2033. We put these 2500MHz and 2600MHz frequency bands into use on March 24, 2016. In November 2017, we further obtained a spectrum for 4G mobile broadband services of 5MHz paired spectrum in the 1800MHz frequency band and 20MHz paired spectrum in the 2100MHz frequency band, and we paid NT$10.9 billion to the government. The licenses are valid until December 31, 2030 and 2033, respectively. In February 2020, we obtained a spectrum for 5G mobile broadband services of 90MHz spectrum over 3.5GHz frequency bands and 600MHz spectrum over 28GHz frequency bands, and we paid NT$48.4 billion to the government. The license is valid until December 31, 2040. We launched 5G services on June 30, 2020. 22 In May 2022, we obtained 900MHz band 2x10MHz bandwidth spectrum and equipment from Asia Pacific Telecom Co. Ltd. (merged with Far EasTone Telecommunications Co., Ltd., or Far EasTone) in consideration of approximately NT$1.9 billion to enhance network performance. The license is valid until December 31, 2030. We offer incentives, such as mobile handset subsidies and rewards points for immediate purchase, when new subscribers agree to sign a service contract with us or when existing subscribers renew their contracts with us, ranging from 12 months to 60 months. Our tariffs for postpaid mobile subscribers primarily consist of monthly fees and usage fees. We also offer loyalty programs, which are our membership projects to offer a number of benefits and rewards, including Hami Points, special offers, and priority ticket access, to encourage subscription to our 5G mobile service. As of December 31, 2025, we had approximately 1.3 million prepaid subscribers, representing approximately 11.0% of our total mobile subscribers, excluding IoT. Prepaid subscribers do not pay monthly fees while may opt for voice or data packages. Once the prepaid balance is fully utilized, subscribers can top up their accounts to continue using the service or elect to switch to a postpaid plan while retaining their existing telephone number. Fixed-line Services In 2023, we generated revenues of NT$81.9 billion, or 36.7% of our total revenues, from fixed-line services. In 2024, we generated revenues of NT$81.7 billion, or 35.5% of our total revenues, from fixed-line services. In 2025, we generated revenues of NT$81.5 billion (US$2.6 billion), or 34.5% of our total revenues, from fixed-line services. The decline in fixed-line services revenues was mainly due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues. Fixed-line services are one of our principal businesses. Our fixed-line services include fixed broadband services, fixed voice services, leased line services, video services and satellite services. Fixed broadband services: our fixed broadband services mainly consist of broadband access, data communication services and Wi-Fi services. We provide broadband access through connections based on our FTTx and ADSL technologies. Our revenues from our broadband access services in 2023, 2024 and 2025 were NT$19.6 billion, NT$21.2 billion and NT$22.0 billion (US$0.7 billion), respectively. Over the years, we are continuously expanding our high-speed FTTx household coverage and encouraging more migration of our FTTx subscribers to higher-speed FTTx service. The following table sets forth our ARPU for each of the periods indicated. Year Ended December 31 2023 2024 2025 NT$ NT$ NT$ ARPU for broadband services per month(1) 774 788 808 ARPU for FTTx services per month(2) 836 846 864 (1)ARPU for our broadband services per month is calculated as the sum of (a) broadband access revenues for the relevant period divided by the average of the number of our broadband access customers on the first and last days of the period divided by the number of months in the relevant period and (b) HiNet ISP service revenues divided by the average of the number of HiNet ISP service subscribers on the first and last days of the period divided by the number of months in the relevant period. (2)ARPU for FTTx services per month is calculated as the sum of (a) FTTx access revenues for the relevant period divided by the average of the number of our FTTx access customers on the first and last days of the period divided by the number of months in the relevant period and (b) HiNet FTTx ISP service revenues divided by the average of the number of HiNet FTTx ISP service subscribers on the first and last days of the period divided by the number of months in the relevant period. Our overall broadband ARPU increased in 2023, 2024 and 2025, mainly due to the demand for broadband speed upgrades, which further propelled the growth of higher-speed service adopters. 23 Our data communication service includes HiNet, our brand name as an ISP, and HiLink, a VPN service for enterprises. We are the largest ISP in Taiwan, with a subscriber market share of 52.2% in Taiwan as of December 31, 2025. As of the same date, approximately 85.2% of our broadband customers were also HiNet subscribers, using HiNet as their ISP, and 92.9% of our FTTx service customers subscribed HiNet ISP service. The following table sets forth HiNet’s subscribers as of each of the dates indicated. As of December 31 2023 2024 2025 (in thousands) Total internet subscribers in Taiwan 7,097 7398 7,582 HiNet subscribers: HiNet FTTx subscribers 3,526 3,591 3,656 HiNet non-FTTX subscribers 506 483 463 Total HiNet subscribers 4,032 4,074 4,119 We also provide Wi-Fi services. As of December 31, 2023, 2024 and 2025, we had a total of approximately 3.0 million, 2.8 million and 2.6 million residential and enterprise customers that leased our access points, respectively. We also provide home Wi-Fi devices rental services, and the number of home Wi-Fi devices increased by 16.2% year-over-year. Fixed voice services: our fixed voice services mainly consist of local telephone, domestic long distance telephone and ILD telephone services. We are the leader of the local telephone service market, with an average subscriber market share of approximately 91.4%, 91.4% and 91.4% in 2023, 2024 and 2025, respectively. Total revenues from local telephone services comprised 9.5%, 8.7% and 8.1% of our total revenues in 2023, 2024 and 2025, respectively. As for the domestic long distance telephone services in Taiwan, total revenues from domestic long distance telephone services comprised 0.7%, 0.6% and 0.5% of our total revenues in 2023, 2024 and 2025, respectively. The decreasing trend of local telephone service and long distance telephone service was mainly due to the migration to mobile services and increased use of VoIP applications. We also provide ILD telephone services in Taiwan, and its revenues accounted for 0.8%, 0.7% and 0.5% of our revenues in 2023, 2024 and 2025, respectively, reflecting phased reduction of low-margin-contracts. Leased Line Services: We are the leading domestic leased line services provider and the leading international leased line services provider in Taiwan, primarily offering exclusive lines that allow point-to-point connection for voice and data traffic. Our local and domestic long distance leased line services revenues were NT$4.3 billion, NT$4.2 billion and NT$4.0 billion (US$0.1 billion) in 2023, 2024 and 2025, respectively. The slight decline in revenues was due to the termination of certian base station circuits lease. Our international leased line services revenues were NT$2.7 billion, NT$2.6 billion and NT$2.7 billion (US$85.6 million) in 2023, 2024 and 2025, respectively. The slight increase in revenues in 2025 was mainly due to the completion and the launch of the new international submarine cables, SJC2, and the first phase of Apricot. Video Services By leveraging video streaming technology via set-top boxes connected to our FTTx data networks, our MOD customers can enjoy TV channels, video-on-demand (VOD), OTT services, and other offerings. As of December 31, 2025, we provided 197 channels, including three 4K channels, along with more than 56,000 hours of on-demand video streaming. In addition to our standard packages, we also offer SVOD services for films, dramas, anime series, kids’ content and variety shows. Since 2017, our MOD platform has effectively delivered OTT services such as Netflix. Our own OTT platform, Hami Video, offers Pay-Per-View, SVOD, channels, and other services to end users. As of December 31, 2025, subscriptions to our video services, including MOD (IPTV service) and Hami 24 Video (OTT service), have reached approximately 3 million. We continue to see growth in our tiered pricing channel packages and digital convergence offerings. Our MOD revenues were NT$3.7 billion, NT$3.7 billion and NT$3.6 billion (US$0.1 billion) in 2023, 2024 and 2025, respectively. The slightly decline from 2023 to 2025 was primarily due to a decrease in subscriber base. We have introduced optional service packages with customized subscriptions to better meet our customers’ preferences. In light of a highly competitive market, we will continue to strengthen our customer stickiness by investing in high-quality content across our various platforms. This strategy will help us maintain our position as the largest video platform in Taiwan. Satellite Services We entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite for 15 years. As our ST-2 satellite is in good operating condition, the expected lifespan is extended for another three years and three months after evaluation in 2021. Please refer to Note 40 to our consolidated financial statements included elsewhere in this annual report for further details. In addition, we have two satellite communication centers with geographical redundancy to ensure uninterrupted TV broadcasts, satellite VAS and backup systems in responding to major emergencies. We also provide satellite services in Southeast Asia. In March 2023, we entered into an agreement with Singapore Telecommunications Limited to jointly invest in a new satellite project to upgrade and replace our aging ST-2 satellite. This collaboration enables us to provide all the services and capabilities of the current generation and significantly improve service quality and capabilities. Furthermore, in April 2025, we entered into an agreement with Astranis Space Technologies Corp. for a dedicated micro-geostationary orbit, or micro-GEO, capacity for Taiwan to enhance network resilience. In December 2025, we further secured the frequency allocation of fixed-satellite services for the micro-GEO services. In November 2023, we entered into an exclusive distribution agreement with Eutelsat Group for the distribution of OneWeb LEO satellite services. In March 2025, the OneWeb satellite constellation had completed full-coverage deployment across Taiwan and the offshore islands. Subsequent to obtaining regulatory clearance, we launched commercial services in June 2025, and have secured projects from both government and enterprise clients. In August 2024, we entered into an exclusive partnership agreement with SES, pursuant to which we provide exclusive MEO satellite services in Taiwan. Subsequent to obtaining regulatory approval, we commenced commercial operations in October 2025, which underpins our strategic development of multi-orbit satellite constellation communication services. Additionally, in December 2025, we secured regulatory approval for frequency allocation for our local gateway station, thereby enhancing the operational capacity available to our satellite communication services. ICT Business In 2023, we generated revenues of NT$28.6 billion, or 12.8% of our total revenues, from ICT services. In 2024, we generated revenues of NT$32.9 billion, or 14.3% of our total revenues, from ICT services. In 2025, we generated revenues of NT$35.5 billion (US$1.1 billion), or 15.0% of our total revenues, from ICT services. The growth in ICT services revenues was mainly due to the rising demand for IDC, cloud, cybersecurity, big data and integrated ICT solutions from our clients. By integrating various technologies, such as cloud computing, cybersecurity, big data analysis, IoT, generative AI, and accelerating emerging services, we provide customized ICT total solutions to enable our enterprise customers to improve efficiency and enjoy smart life. 25 We saw increasing occupancy in our highest-rated IDCs, driven by strong potential demand. In response to the growing demands for AI applications, we continue to expand our IDC business by building AIDCs to deliver AI computing power and provide GPU-as-a-Service (GPUaaS service). We are also a cloud service provider. Our CHT cloud service is a multi-cloud network convergence service. With a high-quality global network as the basis for all cloud services, it integrates our self-developed cloud service, hicloud, and other public cloud services, including Amazon Web Services, Microsoft Azure, and Google Cloud Platform. In addition, we cooperate with our subsidiary, CHT Security Co., Ltd., to provide HiNet Advanced Networks Defense System, or ANDs, and Web Application Firewall, or WAF. ANDs can combine with HiNet Security Fleet solution to upgrade users’ information systems security. We also provide Content Delivery Network, or CDN, service. This service effectively speeds up content delivery on websites with high traffic. The closer the CDN server is to the user geographically, the faster the content will be delivered. We provide CDN service to internet content providers to ensure stable quality when programs are broadcasted. We will expedite CDN construction to enhance digital convergence product strength. Taking advantage of the high speed, low latency and massive connectivity of 5G technology, we also offer our enterprise customers 5G private network services. This dedicated network provides a secure and reliable connectivity solution for 5G smart applications across sectors such as government, manufacturing, and healthcare, ensuring data security while enhancing scalability and operational efficiency. Driving a strategic expansion of AI technologies, we are broadening innovative AIoT application scenarios across transportation, security, energy, building, and healthcare sectors. Leveraging the high performance, stability, and low latency of 5G technology, we integrate these capabilities into comprehensive solutions that advance intelligence and low-carbon development, such as video surveillance, Cellular-based Vehicle Probe (CVP), traffic sign optimization, solar system management, and remote healthcare services. Building on our expertise in big data analytics and AI technology, we build big data analysis platforms to assist our customers in AI model development and management. These AI models are used in cloud services and intelligent customer support, as well as across industries such as government, manufacturing, healthcare and finance. Sales We engage in the distribution and sales of mobile handsets and wearable devices on our mobile network to customers through our directly-owned stores, online store, and authorized exclusive service stores operated by SENAO, and also through third-party retailers. See “Marketing Strategy” and “Sales and Distribution” in “—Marketing, Sales and Distribution.” Interconnection We provide interconnection of our fixed line network and mobile network with other operators. The following table sets forth our interconnection fee revenues and costs for the periods indicated. These revenues and costs are included, depending on the nature of the call made, in domestic fixed communications or mobile communications revenues and expenses, respectively. 26 Year Ended December 31 2023 2024 2025 NT$ NT$ NT$ US$ (in billions) (in millions) Interconnection fee revenues: Fixed line 0.5 0.4 0.3 9.4 Mobile 0.4 0.3 0.3 9.4 Interconnection costs: Fixed line 0.3 0.3 0.2 7.0 Mobile 0.7 0.7 0.7 22.5 The interconnection rate between fixed-line customers and other fixed-line customers is NT$0.26 per minute during peak times and NT$0.08 per minute during off-peak times. The interconnection rate for calls initiated by mobile customers to fixed-line customers has been NT$0.3241 per minute during peak times and NT$0.1575 per minute during off-peak times since January 2025. However, pursuant to the notice issued by NCC, the interconnection fees of local telephones, domestic long-distance or international calls, and mobile-to-fixed-line calls should be decreased gradually from June 5, 2023 to December 31, 2026. See “Item 5. Operating and Financial Review and Prospects—Overview—Tariff adjustments.” Our mobile interconnection revenues and costs decreased from 2023 to 2025, mainly due to (i) a year-over-year decrease of our mobile interconnection rate, as required by the tariff adjustment rules promulgated by NCC and (ii) the decreasing traffic volume attributable to VoIP substitution. Under the tariff adjustment rules, our mobile interconnection rate will decrease from NT$0.386 per minute in 2025 to NT$0.330 per minute in 2028. Fixed interconnection revenues and costs decreased from 2023 to 2025, mainly due to the decreasing traffic volume attributable to VoIP substitution. In addition, cost increases are subject to approval by the regulatory authorities. We expect that our interconnection contracts will generally be reviewed annually, although we may also enter into long-term contracts. Marketing, Sales and Distribution Marketing Strategy In order to retain and expand our large customer base and to encourage our customers to increase their use of our services and products, we continue to focus our marketing strategy on the following areas. •services and products: we continuously develop new VAS and products based on different market segments and Hami Point loyalty program, with the aim of increasing our high-usage customers and enhancing customer loyalty. •pricing and promotions: we design flexible pricing packages that allow customers to select and design special promotional packages to encourage usage. •distribution channels: we seek to broaden our distribution reach by strengthening our cross-industry alliances and marketing relationships. Furthermore, to expand our sales channels, we also implement an external sales agent system by collaborating with SENAO, Synnex Technology and International Corporation, enabling us to extend customer services nationwide. In addition, we have established an online store for years to enhance service efficiency and to broader our reach to young people. 27 •branding: Chunghwa Telecom has been a well-known household brand with nationwide infrastructure and service centers. In order to fulfill our brand commitment, “Always Ahead,” we have always acted in accordance with the highest corporate governance standards, and focus on meeting customer demand and satisfaction to generate additional value for shareholders. Sales and Distribution As of December 31, 2025, we had 17 operations offices for operations, 434 self-operated stores, 14 customer service call centers, and an online store for sales and customer service. In addition, we have simplified transaction process on our online store to improve user experience, and we enhanced our service efficiency by increasing digital channel access of contactless transactions. We also had 240 SENAO exclusive service stores as of December 31, 2025. Our investment in SENAO continues to enhance our mobile handset distribution and sales capabilities in which customers can subscribe to our broadband service, MOD service and other services at SENAO retail stores. See “Item 7. Major Stockholders and Related Party Transactions—B. Related Party Transactions” for a discussion of the agreement between the parent company and SENAO about our business cooperation. Competition We face competition in virtually all aspects of our business. Mobile Services In December 2023, two mergers were completed. As a result, the number of mobile network operators in Taiwan decreased from five to three, including us. All of these three operators have 4G and 5G mobile broadband licenses. Additionally, nowadays mobile operators are expanding their business beyond basic mobile services to encompass other value-added services such as OTT, media, cloud, cybersecurity, and IoT solutions, with a goal to provide subscriber with a holistic digital experience to increase subscribers' stickiness. In 2025, under this new market landscape, we continue to maintain our growth momentum and leadership in the market. In spite of the decrease in mobile subscribers (excluding IoT) in 2025, our postpaid mobile subscribers continued to increase, benefiting from our successful strategy in terms of subscriber retention and new subscribers acquisition. Our mobile service revenues also increased due to the growth in postpaid subscribers and the upsell resulting from 5G migration. In addition to the mobile network operators, there are also mobile virtual network operators, or MVNOs, which could provide mobile services by leasing the capacity and facilities of a mobile service network from a licensed mobile service provider without a spectrum allocation. However, with the implementation of the Telecommunications Management Act in 2020, the NCC’s MVNO registration is no longer mandatory. Our strengths in the mobile services market are primarily based on our premium brand, quality of service, network reliability and attractiveness of service packages. See “Network Infrastructure—Mobile Services Network” for a discussion on our advantage of mobile broadband services spectrum. Fixed-line Services •fixed broadband services: in the fixed broadband market, we have encountered challenges from other cable operators seeking to increase their market share with lower pricing strategies. They have also offered fixed and mobile broadband bundled services through strategic alliances with other mobile operators, extending their footprint in fixed broadband. •fixed voice services: revenues from local and domestic long distance telephone service of telecommunication services providers has continuously decreased in the past years primarily due to mobile and VoIP substitution. Challenges faced by mobile data service providers have increased 28 significantly due to the popularity of smart mobile devices and mobile applications such as LINE and WeChat. •leased line services: major competitors in this field are three fixed line operators, namely Taiwan Fixed Network Co., Ltd, New Century Infocomm Tech. Co., Ltd. and Far EasTone Telecommunications Co., Ltd. The leased line services providers primarily focus on the basis of price and the bandwidth speed of services. •video services: major competitors in this field include six cable TV MSOs, 20 independent cable TV operators as well as OTT service providers. These service providers focus on price and multimedia content. ICT Business We leverage our technology capability to provide comprehensive ICT services. In terms of IDC business, we are the leading IDC service provider in Taiwan with more than 70% market share. We offer the best IDC service quality, and our major competitors include Far EasTone, Taiwan Fixed Network and Acer Cyber Security. Our major competitors in cybersecurity include Acer Cyber Security Inc. and ISSDU Inc. in terms of cybersecurity professional services and TAIWAN-CA Inc. in terms of identification business. Our major competitors in cloud services are cloud services resellers and system integration service providers, including eCloudvalley Digital Technology Co. Ltd, CKmates International Co. Ltd, CloudMile Inc., Nextlink Technology Inc., Acer E-Enabling Service Business Inc. and SYSTEX Corporation. Our major competitors in AIoT application services are telcos and system integration service providers, including telecom operators such as Far EasTone and Taiwan Mobile, as well as system integration service providers and emerging startups in sectors such as energy management and image recognition. Network Infrastructure Our network infrastructure consists of transmission networks that convey voice and data traffic, switching networks that route traffic between networks, and mobile, internet, leased line and data switching networks. We purchase most of our network equipment from well-known international suppliers. As part of the purchase contract, these suppliers deliver and install the equipment for us. We also purchase from local suppliers a variety of components such as transmission lines, switches, telephone sets, MOD set-top boxes and radio transmitters. Approximately 12,027 of our employees were engaged in network infrastructure development, maintenance, operations and planning as of December 31, 2025. Transmission Networks As of December 31, 2025, our transmission networks consisted of approximately 2.97 million fiber kilometers of fiber optic cable for trunking and approximately 13.68 million fiber kilometers of fiber optic cable for local loop. Due to the emergence of Packet Transport Network, or PTN, technology, a cost-effective method for transmitting data services, we began the deployment of PTN in 2013. Due to the high utilization of our existing Re-configurable Optical Add-Drop Multiplexer, or ROADM, network, we began to introduce Optical Transport Network, or OTN, to meet the demand of 100 Gbps per wavelength services in 2014. After completing a trial of per-wavelength transmission rates of 200 Gbps, we began to introduce the technology of 200 Gbps per wavelength in our OTN network in 2018 and 400 Gbps per wavelength in 2024. We had deployed 1,284 wavelength for 100 Gbps, 389 wavelength for 200 Gbps and 15 wavelength for 400 Gbps in the OTN network and 21,898 GbE in the PTN network by the end of 2025. 29 As part of our strategic focus on the internet and data markets, our local loop connections mainly adopt FTTx technology. This enables us to provide broadband services, such as MOD, high-speed internet access and VPN. As of December 31, 2025, we have constructed approximately 12.7 million FTTx ports. Our FTTx service can offer high-speed broadband access rates up to 2 Gbps. For low bandwidth demand, we use ADSL technology to provide the internet connection services to our customers. Switching Networks Domestic telecommunications network. Our domestic public switched telephone network currently consists of 19 message areas connected by a long distance network. As of December 31, 2025, we had 38 long distance exchanges, which were interconnection points between our telecommunications network and approximately 9.1 million telephone lines, which reached virtually all homes and businesses in Taiwan. We currently have intelligent networks installed over our public switched telephone networks for our domestic long distance and international networks, as well as a local intelligent network mainly in the Taipei, Taichung and Kaohsiung metropolitan areas. Our intelligent network is designed to facilitate the use of VAS by providing more information about calls and allowing greater management of those calls. As of December 31, 2025, our Next Generation Network, or NGN, core network capacity consisted of approximately 8,600,000 local telephone subscribers, comprising approximately 8,230,000 Session Initiation Protocol-based, or SIP-based, and approximately 370,000 Access Gateway-based, or AG-based, subscribers. Our NGN Managed IP backbone network consists of an inner core network and an outer core network. By the end of 2025, we owned 12 sets of switch routers for the inner core network and 32 sets of switch routers for the outer core network, and the bandwidth of the network was approximately 3,720 Gbps. We believe this network will enable us to meet the increasing demand for NGN services, such as VoIP, and all managed services, including MOD and VPN. International network. Our international infrastructure consists of multiple submarine cables, transmission networks, voice GWs and IP networks, which provide IPLC, IPVPN, Voice and Internet transit service to connect Taiwan and worldwide. In 2018, we started to build SJC2 with several Asian telecom companies. The cable features up to seven pairs of high-capacity optical fiber with a total capacity of 126 Terabits per second. Its high capacity allows it to support high bandwidth intensive requirements, such as IoT, robotics, analytics and AR or VR applications. SJC2 was completed in July 2025, initially built with a 17.1Tbps bandwidth, with future expansions planned according to business needs. In 2021, we joined another consortium cable project called APRICOT to further lay a solid cornerstone for Chunghwa Telecom’s international business plan in the Asia-Pacific region. The northern segment of APRICOT was completed and activated in September 2025, providing an initial capacity of 7.4 Tbps to connect Taiwan with Japan. As of December 31, 2025, we had invested in 30 submarine cables, 14 of which landed in Taiwan. The total invested capacity has reached 60.34 Tbps. Mobile Services Network Our mobile services network consists of: •cell sites, which are physical locations equipped with a base station consisting of transmitters, receivers and other equipment used to communicate through radio channels with customers’ mobile handsets within the range of a cell; •Centralized Radio Access Network, or C-RAN, which splits base stations into two parts, the Radio Remote Unit, or RRU, and the Base Band Unit, or BBU. The RRUs stay at the cell site, while the BBUs are aggregated into a centralized office; •Radio Network Controller, or RNC, for 3G, which connects to, and control, the base station within each cell site; 30 •Mobile Switching Server, or MSS, for 3G, which control the base station controllers and the processing and routing of telephone calls; •Serving GPRS Support Nodes, or SGSN, which connects the GPRS network to the base station controllers; •Mobility Management Entity, or MME, which connects the base station to our 4G/5G core network that is responsible for control side; •Serving Gateway, or S GW, which connects the base stations to our 4G/5G core network that is responsible for data side; •Packet Data Network Gateway, or PDN GW, which connects our 4G/5G core network to the internet; and •transmission lines, which link to the mobile switching service centers, MME, S GW, base station controllers, base stations and the public switched telephone network in connection with the 3G/4G/5G network, and the base station controllers, the support nodes, PDN GW and the internet in connection with the GPRS/4G/5G core network. In May 2014, we launched our 4G mobile broadband services with 10MHz paired spectrum in the 900MHz frequency band and 25MHz paired spectrum in the 1800MHz frequency band. In December 2015, we obtained an additional spectrum for 4G mobile broadband services of 30MHz paired spectrum in the 2500MHz and 2600MHz frequency bands. In November 2017, we further obtained a spectrum for 4G mobile broadband services of 5MHz paired spectrum in the 1800MHz frequency band and 20MHz paired spectrum in the 2100MHz frequency band. In February 2020, we acquired 5G spectrums allocated 90MHz bandwidth in the 3.5GHz frequency band and 600MHz bandwidth in the 28GHz frequency band. In June 2020, we launched 5G mobile broadband services. We use C-RAN architecture to enhance 5G RAN performance and reduce network maintenance costs. In May 2022, we acquired 10MHz paired spectrum in the 900MHz frequency band from Asia Pacific Telecom Co., Ltd. We currently own 40MHz spectrum in the 900MHz frequency band, 60MHz spectrum in the 1800MHz frequency band, 40MHz spectrum in the 2100MHz frequency band, 60MHz spectrum in the 2600MHz frequency band, 90MHz spectrum in the 3500MHz frequency band, and 600MHz spectrum in the 28GHz frequency band, which may provide higher data transmission rates. We have also installed an intelligent network on our existing mobile services network infrastructure, which enables us to provide additional functions, such as prepaid and VPN services as well as a wide range of VAS. Internet Network HiNet, our internet service provider, has the largest internet access network in Taiwan, with 23 points of presence, approximately 3.68 million broadband subscribers and a backbone bandwidth of approximately 29,570 Gbps as of December 31, 2025. We aim to increase HiNet’s points of presence and backbone bandwidth to approximately 31,570 Gbps by the end of 2026. HiNet’s broadband backbone network consists of an inner core network and an outer core network. We had a high-speed internet protocol backbone network by the end of 2025 with 14 sets of switch routers for the inner core network and 36 sets of switch routers for the outer core network. We also built CDN to meet the needs of Internet/OTT services. Our CDN consists of 20 domestic and 3 overseas point-of-presences and the total capacity is approximately 4,460 Gbps as of December 31, 2025. We believe these networks will enable us to meet the increasing demand for our internet services. HiNet’s total international connection bandwidth is 5,890 Gbps as of December 31, 2025. As we expect that internet traffic flows to and from the U.S. will continue to increase, we have been continuously expanding our bandwidth to the U.S. We also endeavor to increase our links to other countries, including Japan, Korea, Hong Kong, Singapore, Mainland China, Malaysia, the United Kingdom, Germany and the Netherlands. 31 Leased Line and Data Switching Networks We operate leased line networks on both a managed and unmanaged basis. In addition, we operate a number of switched digital networks used principally for the provision of packet-switched, frame relay, asynchronous transfer mode technology and a multi-protocol label switching internet protocol VPN. As of December 31, 2025, we had 68 frame relay ports and approximately 159,614 multi-protocol label switching internet protocol VPN virtual ports. Our data networks support a variety of transmission technologies, including frame relay, asynchronous transfer mode and Ethernet technology. We have also built up our HiLink VPN that combines internet protocol and asynchronous transfer mode technologies. The advantage of HiLink VPN based on multi-protocol label switching technology is that it can carry different classes of services, such as video, voice and data, together to provide services with various qualities of service, high-performance transmission and fast-forward solution in an enhanced security network. HiLink VPN can be accessed by xDSL/FTTx/NG-SDH/PTN and can include built-in mechanisms that can deal with overlapping internet protocol addresses. Therefore, the network is potentially less costly and requires less management for business applications. Property, Plant and Equipment Our property, plant and equipment consist mainly of telecommunications equipment, land and buildings located throughout Taiwan. Although we have a significant amount of land and buildings throughout Taiwan, most of our properties are for operational use and only a small part of them are for investment purposes, which were classified as “investment properties” in our consolidated financial statements included in this annual report. Notes 17 and 19 to our consolidated financial statements, included elsewhere in this annual report, provide additional details as to our “Property, plant and equipment” and “Investment properties,” respectively. See “Item 3. Key Information—D. Risk Factors— Risks Relating to Our Company and the Taiwan Telecommunications Industry—Our ability to deliver services may be disrupted due to systems failures, network shutdowns, earthquakes or other natural disasters” for a discussion of environmental issues that may affect utilization of our assets. We continue to revitalize our own assets through rental income focused strategies and explore development opportunities to increase the value of our land and buildings. We received approximately NT$0.9 billion (US$28.21 million) in rental income from properties in 2025. Insurance We do not carry comprehensive insurance for our properties or any insurance for business disruptions. We do, however, maintain in-transit insurance for key materials, such as cables, equipment and equipment components. Employees Please refer to “Item 6. Directors, Senior Management and Employees—D. Employees” for a discussion of our employees. Our Pension Plans Currently, we offer two types of employee retirement plans—our defined contributions plan and defined benefits plan—which are administered in accordance with the Republic of China Labor Standards Act and the Republic of China Labor Pension Act. Legal Proceedings From time to time, we are involved in various legal and arbitration proceedings of a nature considered to be in the ordinary course of our business. It is our policy to provide for reserves related to these legal matters when it is probable that a liability has been incurred and the amount is reasonably estimable. From time to time, we have also been assessed fines by various government agencies, such as the NCC and FTC, but none of these fines has had a significant effect on our financial condition or results of operations. 32 We believe that we had not been involved in any legal or arbitration proceedings during 2023, 2024 and 2025 that would have a significant effect on our financial condition or results of operations; however, we cannot give you any assurance with respect to the ultimate outcome of any asserted claims against us or legal or arbitration proceedings involving us. Capital Expenditures See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a discussion of our capital expenditures. Enforceability of Judgments in Taiwan We are a company limited by shares and incorporated under the ROC Company Act. All of our directors, executive officers and some of the experts named in this annual report are residents of Taiwan and a substantial portion of our assets and the assets of those persons are located in Taiwan. As a result, it may not be possible for investors to effect service of process upon us or those persons outside of Taiwan, or to enforce against them judgments obtained in courts outside of Taiwan. We have been advised by our ROC counsel that in their opinion any final judgment obtained against us in any court other than the courts of the ROC in connection with any legal suit or proceeding arising out of or relating to the ADSs will be enforced by the courts of the ROC without further review of the merits only if the court of the ROC in which enforcement is sought is satisfied that: •the court rendering the judgment has jurisdiction over the subject matter according to the laws of the ROC; •the judgment and the court procedure resulting in the judgment are not contrary to the public order or good morals of the ROC; •the judgment is a final judgment for which the period of appeal has expired or from which no appeal can be taken; •if the judgment was rendered by default by the court rendering the judgment, we, or the above-mentioned persons, were duly served within a reasonable period of time in accordance with the laws and regulations of the jurisdiction of the court or process was served on us with judicial assistance of the ROC; and •judgments at the courts of the ROC are recognized and enforceable in the court rendering the judgment on a reciprocal basis. A party seeking to enforce a foreign judgment in the ROC would, except under limited circumstances, be required to obtain foreign exchange approval from the Central Bank of the Republic of China (Taiwan) for the remittance out of the ROC of any amounts exceeding US$100,000 or its equivalent recovered in respect of such judgment denominated in a currency other than NT dollars. Regulation Regulatory Authorities Prior to March 1, 2006, we were under the supervision of the MOTC and the Directorate General of Telecommunications. On March 1, 2006, the NCC was formed in accordance with the National Communications Commission Organization Act, which was intended to transfer regulatory authority over the Taiwan telecommunications industry from the MOTC and the Directorate General of Telecommunications to the NCC. Under the National Communications Commission Organization Act, the NCC was comprised of seven commissioners, which are full-time positions. The premier of the Executive Yuan shall nominate the commissioners and appoint one of them to serve as chairperson, and one as vice chairperson. The nomination shall be approved and appointed by the Legislative Yuan. The tenure of the commissioners is four years, and the commissioners may be re-appointed to serve a consecutive term once. 33 On August 27, 2022, the Ministry of Digital Affairs was launched to partly take over the administrative authorities formerly held by the NCC, the MOTC and the Executive Yuan, and the Organizational Act of the Ministry of Digital Affairs was enforced on the same day. Telecommunications Management Act The TMA was passed by the Legislative Yuan on May 31, 2019 and promulgated by the President on June 26, 2019. The Executive Yuan issued an ordinance on June 29, 2020 to set the effective date of the TMA (excluding certain articles regarding frequency allocation) on July 1, 2020, and issued an ordinance on October 22, 2020 to set the effective date of the remaining articles of the TMA regarding frequency allocation on November 1, 2020. According to the TMA, within three years upon the enforcement thereof, the existing telecommunications enterprises shall register themselves with the NCC for the transition into being governed by the TMA. We filed an application for the aforementioned transition registration on July 31, 2020, and the application was approved by the NCC on September 30, 2020. The impacts caused by the enforcement of the TMA on us and the telecommunications industry include: (i) reducing the entry barrier to the telecommunications markets by replacing the original concession/approval system with a registration system; (ii) loosening unnecessary restrictions while imposing stricter obligations on enterprises with significance in the specific telecommunications service markets; (iii) regulating the use of private lands and buildings for network infrastructure; and (iv) introducing flexible spectrum mechanisms such as domestic roaming, frequency transferring, leasing, lending, and sharing. Reducing the entry barrier to the telecommunications market: Telecommunications service providers shall register as a telecommunications enterprise with the competent authority for activities including negotiating interconnection, applying for frequency assignments (excluding Article 56 exceptions), assigning Public Switched Telecommunications Network (PSTN) codes, subscriber numbers, leasing/purchasing services with assigned numbers, or providing end-user Internet access. Failure to register results in being ineligible for rights under the TMA. Specifying the obligations of telecommunications enterprises: The TMA categorizes the obligations of telecommunications enterprises into three levels: general obligations, special obligations and designated obligations: (1)General Obligations: The obligations borne by all the telecommunications enterprises that have filed the registration with the NCC including disclosure of service conditions, accounting separation, communication confidentiality, consumer complaint handling, record-keeping, service suspension notification, universal service cost sharing for enterprises meeting the revenue threshold, and interconnection support. (2)Special Obligations: The obligations borne by the telecommunications enterprises that are granted specific resources or determined by the NCC including emergency communications, security maintenance plans, standard service contracts, quality self-evaluations, and co-establishment of consumer dispute mechanisms. (3)Designated Obligations: In order to fulfill the need of policy or competent laws and regulations, relevant competent authorities may designate the telecommunications enterprises which meet certain conditions to take relevant necessary measures, including disaster prevention and assistance, communication security and surveillance, protection of the rights and interests of the people with disabilities and the telecommunications universal services. 34 To meet the need of the rapid-changing market and ensure effective competition in the telecommunications service market, the enterprises under control are changed from dominant market players to the enterprises with significance in the specific telecommunications service market, which are subject to different levels of corrective actions according to the Telecommunications Management Act. The NCC is entitled to adopt control measures for those with market significance in the specific telecommunications service market if necessary, and such measures may be applied to us if we are regarded as having market significance. The opportunity of accessing to and using information may be different due to gender, race, class, geographic area of residence or other factors, which is called the digital divide. The Telecommunications Management Act tries to resolve the problem caused by the digital divide from the following aspects by opening the market, introducing competition and new technology and continuing the promotion of telecommunications universal service. The Telecommunications Management Act removes the restriction on telecommunications network construction imposed by the Telecommunications Act and allows enterprises to establish the telecommunications networks that meet their business needs and develop new technology and equipment. To ensure network and information security, PSTN and telecommunications networks and services provided over the internet are subject to a unified cybersecurity standard and related protection obligations. The Telecommunications Management Act changes the method of frequency allocation specified in the Telecommunications Act, allowing the competent authority to allocate frequency by auction, open tender or other appropriate methods according to the characteristic and purpose of use of the frequency. As a result, the efficiency of the use of frequency can be improved, the development of radio technology can be ensured, and the development of new technology and services of communications can be encouraged. Fair Trade Act According to the TMA, to ensure effective competition in the telecommunications service market, the competent authority is entitled to adopt control measures for those with market significance in the specific telecommunications service market if necessary, including ordering those enterprises to disclose necessary information, conditions, procedures and expenses in terms of interconnection, network access components or use of telecommunications infrastructure; prohibiting those enterprises from making discrimination, setting the service fee that may cause a cross-subsidy, price squeeze or any other abuse of power and hence impede fair competition (including doing so for the subsidiaries, affiliates or partners thereof ); requesting those enterprises to provide interconnection, network access components or relevant telecommunications infrastructure; ordering those enterprises to draw up and publish a template agreement related to the provision of interconnection or network access. By comparison to the TMA, the Fair Trade Act, or the FTA, plays a more comprehensive role in regulating all matters relating to competition between enterprises. The FTA seeks to deter and prevent anti-competitive conduct by granting the powers of the FTC to investigate and to impose penalties. The FTA is administered and enforced by the FTC, which has independent administration rights granted to it under the FTA and is empowered to impose disciplinary actions for fair trade matters. The FTC may initiate an investigation either on its own account in accordance with its discretion granted by the FTA or upon receipt of a complaint. Regulation on Telecommunications Enterprise with Monopoly Status The term “monopoly” used in the FTA refers to the circumstance where an enterprise conducts its business operation in a relevant market without facing any competition or where an enterprise is able to dominate the relevant market and block competition in the market. If there are two or more enterprises within the same market that do not 35 engage in any price competition with each other, the whole group of non-competing enterprises should be deemed as a single monopoly enterprise in the market. The FTC has the ultimate discretion to consider an enterprise as a monopolistic enterprise upon any other events evidencing such enterprise’s capability to affect the supply and demand in relevant markets or eliminate competition. Under the FTA, any enterprise with monopoly status is prohibited from engaging in any of the following activities: •directly or indirectly, by using any unfair method to prevent any other enterprises from competing; •improperly set, maintain or change the price for goods or the remuneration for services; •forcing the enterprise’s trading counterpart to give preferential treatment without justification; or •abusing its market power. If the FTC finds an enterprise liable for violation of regulations governing monopoly, the FTC could impose a monetary fine of not more than NT$100,000,000 each time and order such enterprise to cease such wrongdoing, rectify the conduct or take any necessary corrective action. If the FTC finds such violation serious, it may further impose a monetary fine exceeding NT$100,000,000 but up to 10% of the total sales of the enterprise in the preceding fiscal year. Furthermore, the responsible person of such enterprise who engaged in such wrongdoing may be sentenced to imprisonment of not more than three years if the enterprise fails to follow FTC’s order to cease the wrongdoing, rectify the conduct or take any necessary corrective action. Regulations on Concerted Action (Cartel) in Telecommunication Industry The term “concerted action (cartel),” as used in the FTA, means the competing enterprises at the same production and/or marketing stage, by means of contract, agreement or any other form of mutual understanding, jointly determine the price of goods or services, quantity, technology, products, facilities, trading counterparts, or trading territory with respect to such goods and services, or any other behavior that restrict each other’s business activities, resulting in an impact on the market function with respect to production, trade in goods, or supply and demand of services. The FTC may assume a concerted action exists based on the market condition, the feature of goods or services, cost and profit, and the economic feasibility for enterprises to conduct concerted action. Under the FTA, enterprises are prohibited from engaging in any concerted actions unless the FTC holds the concerted action may be beneficial to the overall economy and public interest. If the FTC finds an enterprise liable for violation of regulations governing concerted action (cartel), the FTC could impose a monetary fine of not more than NT$100,000,000 each time and order such enterprise to cease such wrongdoing, rectify the conduct or take any necessary corrective action. If the FTC finds such violation is serious, it may further impose a monetary fine exceeding NT$100,000,000 but up to 10% of the total sales of the enterprise in the preceding fiscal year. Furthermore, the responsible person of such enterprise who engaged in such wrongdoing may be sentenced to imprisonment of not more than three years if the enterprise fails to follow FTC's order to cease the wrongdoing, rectify the conduct or take any necessary corrective action. Regulations on Restrict Competition in Telecommunication Industry The FTA prohibits any enterprise from conducting any of the following activities that may restrict competition: •forcing another enterprise to discontinue supply, purchase or other business transactions with a particular enterprise for the purpose of injuring such particular enterprise; •treating another enterprise discriminatively without justification; •preventing competitors from participating or engaging in competition by inducing customers with low price or other illegal inducements; 36 •forcing another enterprise to refrain from competing in price, or to take part in a merger, or a concerted action, or to perform vertical restrictions by coercion, inducement with interest, or other improper methods; or •setting improper restrictions on its trading counterparts’ business activity as the condition to reach business engagement. If any enterprise violates the regulations governing unfair competition, the FTC may order it to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, the FTC may assess upon such enterprise an administrative fine of not less than NT$100,000 nor more than NT$50,000,000. Should such enterprise fail to cease therefrom, rectify the conduct or take any necessary corrective action after the lapse of the prescribed period, the FTC may continue to order such enterprise to cease therefrom, rectify the conduct or take any necessary corrective action within the time prescribed in the order, and each time may successively assess thereupon an administrative fine of not less than NT$200,000 nor more than NT$100,000,000 until its ceasing therefrom, rectifying its conduct or taking the necessary corrective action. Regulations on the Representations or Symbols Used by Telecommunications Enterprises on Goods or in Advertisement The FTA prohibits any enterprise from making or using false or misleading representations or symbols as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, place of processing on goods, or any items which attract customers or in advertisements, or in any other way making known to the public. If an enterprise violates the applicable provisions under the FTA that prohibit false or misleading representations, the FTC may order it to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, the FTC may assess upon such enterprise an administrative fine of not less than NT$50,000 nor more than NT$25,000,000. Should such enterprise fail to cease therefrom, rectify the conduct or take any necessary corrective action after the lapse of the prescribed period, the FTC may continue to order such enterprise to cease therefrom, rectify the conduct or take any necessary corrective action within the time prescribed in the order, and each time may successively assess thereupon an administrative fine of not less than NT$100,000 nor more than NT$50,000,000 until its ceasing therefrom, rectifying its conduct or taking the necessary corrective action. Personal Data Protection Act Under the Personal Data Protection Act, or PDPA, every individual or governmental or non-governmental agencies, including us, should be subject to certain requirements and restrictions for collecting, processing or using personal data. The definition of “personal data” is extended to cover a broad scope, including the name, date of birth, ID number, special features, fingerprints, marital status, family, education, occupation, medical records, medical history, genetic information, sex life, health examination report, criminal records, contact information, financial status, social activities, and any other data which is sufficient to directly or indirectly identify a specific person. If we fail to comply with the PDPA, we may be subject to serious punishment for civil claims, criminal offenses and administrative liabilities: the ceiling of the aggregate compensation amount for damages payable in a single case will be up to NT$200 million or the actual value of loss arising from our violation provided the amount of actual value of such loss is higher than NT$200 million; the defendant may be subject to imprisonment of up to five years; and the penalty for administrative liabilities will be up to NT$500,000 for each violation, and may be imposed consecutively if such violation continues. In May 2023, the PDPA was amended for the establishment of the “Personal Data Protection Commission” as the independent competent authority of the PDPA. For the preparation of the Personal Data Protection Commission, the Executive Yuan established the “Preparatory Office of Personal Data Protection Commission” on December 5, 2023. The power for supervision and enforcement of PDPA will be transferred to the Preparatory Office of Personal Data Protection Commission since January 1, 2024. The Preparatory Office of Personal Data Protection Commission will be dissolved when the Personal Data Protection Commission is formally established. As of December 31, 2025, the Personal Data Protection Commission was not formally established. 37 Corporate Responsibilities: Environmental, Social and Governance (ESG) Initiatives We are dedicated to sustainable environmental, social, and governance practices. To oversee our sustainability efforts and meet stakeholders’ expectations, we established the Sustainable Development and Strategy Committee, a board-level functional committee, in 2023. This committee guides the company in setting sustainable development vision, long-term strategies, and medium- to long-term goals in line with global trends. We also formed the Sustainable Development Promotion Committee, led by the management, which includes four working groups: Environmental Group, Social Group 1, Social Group 2, and Governance Group. Both of the committee and its groups have regular meetings to develop and implement ESG plans and initiatives in alignment with the vision and mission set by the Sustainable Development and Strategy Committee. To advance our corporate sustainability blueprint and underscore our firm commitment to ESG, our President assumes the role of Chief Sustainability Officer, spearheading the implementation of all sustainability initiatives in 2025. Environmental Sustainability While the telecommunications service is a low-pollution industry, as a member of the global community and a telecommunications industry leader in Taiwan, we have come to recognize that energy and resources, wastes, maintenance, and procurement in the operation will lead to certain level of impacts on the environment. To deal with environmental issues and mitigate the influence of climate change, we monitor and seek to incorporate environmental sustainability practices and principles in our operations, products and supply chain. We are committed to achieving net-zero greenhouse gas (GHG) emissions by 2045. Moreover, we joined the EV100 initiative and have to committed to achieving 100% electrification of our directly controlled car fleet by 2030. Furthermore, after officially joining RE100 in May 2023, we committed to using 100% renewable energy for our IDCs by 2030 and for the entire company by 2040. Our environmental sustainability initiatives mainly include: •climate change adaptation strategies: we established the Environmental (E) group, supervised by the Executive Vice President of Technology, to oversee the company’s climate change mitigation and adaptation issues. We focus on environmental sustainability issues and regulatory progress domestically and globally, and actively align ourselves with international management systems and environmental sustainability initiatives. We continuously enhance our climate resilience of telecommunications infrastructure and communication equipment to ensure business continuity, such as planning the emergency backup capacity and adopting dual power supply to achieve uninterrupted operation for critical IDCs. Moreover, we encourage and motivate partners in the upstream and downstream to jointly attain the 1.5°C goal laid out in the Paris Agreement. We are the first telecommunications service provider in Taiwan to join the CDP Supply Chain Program and encourage supplier partners to disclose complete GHG information and plan for carbon reduction actions. •carbon emission investigation: we had completed a group-wide Scope 1 to Scope 3 greenhouse gas (GHG) investigations for the year of 2025, which is currently under review. Over the past few years, we have successfully obtained ISO 14064-1:2018 verification for the respective GHG investigations, ISO-14067 and carbon footprint labels issued by the Ministry of Environment for our specified categories of services and products. Based on 2025 data, our total greenhouse gas emissions for Scope 1, Scope 2 and Scope 3 (Categories 1–6) amounted to 2,468,907.9383 t-CO2e. In addition, we purchased carbon credits in December 2023 and September 2025, and these carbon credits have been utilized to achieve carbon neutrality at our Telecommunication Training Institute in 2025. •carbon emission reduction: Both of our near-term and long-term targets to reduce GHG emissions had been validated by the Science Based Targets initiative, or SBTi. In addition, we have taken a series of actions, such as replacing old equipment and infrastructure, using C-RAN architecture and introducing energy management on a larger scale in operation and maintenance management, to achieve carbon reduction. •internal carbon pricing: we have adopted internal carbon pricing, or ICP, in our company since 2023 with a price of NT$1,600 per tonne of CO2e by considering factors, such as investments in carbon reduction projects, future renewable energy demand, potential implementation of carbon fees in Taiwan and international peers comparison. Our Internal Carbon Pricing (“ICP”) mechanism incorporates the cost of carbon emissions into the performance evaluation framework of our business units. The internal 38 carbon fees collected will be used as a fund to implement our innovative projects and support our carbon reduction initiatives. •renewable energy: in May 2023, we officially joined RE100, committing to achieve 100% renewable energy usage across all operations by 2040. From 2023 to 2025, we had accumulatively procured approximately 235 million kWh. In 2025, our renewable energy procurement and self‑generated power totaled 88.679 million kWh, with an investment of several hundred million NTD in renewable energy procurement during the year. In December 2025, we entered into a 20-year power purchase agreement with GREENET CO., LTD. to secure over 4.6 billion kWh of renewable energy. •sustainable procurement: we adhered to the ISO 20400 Sustainable Procurement Guidelines to incorporate our sustainability principles into procurement practices and have obtained the top-tier Level 5 “Role Model” recognition in 2025. By introducing the “Sustainable Supply Chain Initiative” and establishing the “Supplier Sustainability Grading System,” we leveraged our influence in procurement to encourage suppliers to prioritize sustainability issues, including environmental protection, labor rights, and occupational health and safety. •IOWN initiatives: as a member and board director of IOWN, we are working with global companies to explore multi-domain cutting-edge technologies to achieve better energy efficiency and reduce carbon emissions such as end-to-end all photonic networks and innovative applications. Partnering with Japanese telecom operator, NTT, we have successfully carried out joint telematics performance demonstrations in Japan and Taiwan in 2025, and won the Digital Infrastructure Innovation award at the 2025 Glotel Awards. •biodiversity: we commit to maintaining and fostering biodiversity, avoiding all kinds of deforestation activities and promoting reforestation throughout our operations. In 2025, as we continued advancing our sustainability efforts and published our 2024 TNFD report, we focused on strengthened stakeholder engagement and leveraged AIoT technologies to promote biodiversity conservation through the Hundred Species Restoration Project and the Black-faced Spoonbill Conservation Project, moving toward a Net Positive Impact on biodiversity and No Net Deforestation by 2030. Social Responsibility We have committed to leveraging our technologies and capabilities to practice digital empowerments and providing a safe and healthy work environment to our employees and further contributing to our society. It mainly includes: •employee compensation: we regularly review the salary structure and comprehensively consider factors such as (i) inflation, price indices, and industry salary benchmarks and (ii) our operational condition, financial performance, and employment costs to establish a reasonable and competitive remuneration mechanism. Additionally, we offer incentives and bonus for all employees, which demonstrates our commitment to recognizing employees’ hard work and contributions. •employee happiness: we care for our employees and constantly provide a better working environment to our employees. Our employees who have children aged six or under can enjoy a childcare allowance and can apply for one hour of paid leave per working day. We also offer our employees who take nursing care leave 50% of their labor insurance salary as a subsidy for 18 months after six months government subsidy. Besides, we continue to establish childcare centers for our employees’ children to balance work and family. In addition, we implement an employee stock ownership plan through a trust. When our employees deposit a certain amount of their salary to us, we will offer 30% of the deposit amount as their subsidies. •workplace flexibility: to enhance work flexibility and support talent retention, we introduced “shared offices” across Taiwan and established the R&D related centers in Kaohsiung, and offered employees who wish to return to, or be closer to, their hometowns the option of working in these locations. •equality in our workplace: we commit to creating a workplace with equality and non-discrimination. We launched a series of activities to advocate gender equality and dedicated to promoting the growth of female employees in the workforce. In addition, we have well-established and unimpeded grievance 39 mechanisms for internal employees or external personnel to submit complaint for any discrimination or harassment issues encountered. •occupational safety and health: we commit to complying with laws and other regulations of the health and safety, and encourage our employees to take necessary precautions and immediately report accidents, injuries and unsafe practices or conditions. In addition, we are the first telecommunications service provider in Taiwan to achieve compliance with ISO 45001:2018. •society giveback: we leverage our ICT capabilities to help address the digital divide and support underserved communities. Our key initiatives include the development of a customized system that enables visually impaired individuals to work in call centers, the “Tech4Good Digital Empowerment Ecosystem” designed to enhance digital access and learning opportunities for students in remote areas, and the deployment of our 5G private network to support emergency telemedicine services. In addition to our technology-based initiatives, we actively promote employee volunteerism to encourage direct engagement and contribution to local communities. •anti-fraud achievements: our anti-fraud measures have been at the forefront of the telecommunications industry. For example, we have AI+ICT information and communication technology capabilities to support fraud identification and prevention. In addition, we launched the international fraud calls alerting service to fight against international scam phone calls. We are also in the process of launching anti-fraud voice messages as well as domestic and overseas anti-fraud SMS. From interception to alters and from fixed network to mobile network, we continue to expand protection coverage for telecommunications with an aim to benefit the society. Corporate Governance Our governance practices serve as an essential role in our ability to conduct our operations responsibly and ethically. Our governance practices mainly include: •strategy alignment: we have committed to strong corporate governance that directly aligns with our long-term strategies and financial and operating plans. In the environment of evolving market, we also timely adjust our strategies to optimize our business and enhance our management control. •board diversity: our board of directors is diversified to cover our business operations, operating dynamics and business development, with considerations of diversity in gender, age, nationality, culture and ethnic diversity. Our board possesses relevant competencies, including operational judgment, accounting and finance experience, operating and crisis management skills, industry insight, global market knowledge, leadership skills, decision-making ability and sustainability development capability. We have set concrete objectives to improve board diversity, including maintaining at least one female director on the board and ensuring that members are from various backgrounds. •governance with diversity and inclusion: we have worked to create diversity so that we are more reflective of our society with a range of perspectives to support our business decision-making. Our directors also prioritize inclusion and ensure equal access of all genders and groups of employees to training, career development, nominations for promotions and professional opportunities. •incorporate ESG targets into senior executives’ compensation: since 2022, we have linked part of our senior executives’ performance-based compensation to the Company's ESG goals to ensure their decisions align with investors’ long-term interests. Each year, the proportion of compensation tied to our ESG targets has increased, along with the number of employees covered. By 2025, 30% of performance-based compensation was directly linked to ESG targets for all senior executives. •incentive compensation clawback policy: this policy states that the Company should recover erroneously awarded compensation which any portion of such incentive compensation is received by the covered executives during the last three full fiscal years or any applicable transition period preceding the date that the Company is required to restate its financial statements which resulting from the issuer’s material noncompliance with any financial reporting requirement under securities laws. •anti-corruption practices: In 2024, we have introduced ISO 37001 Anti-Bribery Management System to ensure compliance with relevant legal requirements in our daily operations. By establishing preventive 40 and monitoring mechanisms, we aim to mitigate legal risks and penalties associated with corruptive conducts. In November 2024, we entrusted a third-party agency to perform the audit and successfully passed it. •sustainable finance: we consider ESG factors in our investment decisions to ensure our targets align with specific ESG objectives. In August 2025, we issued a sustainability bond (unsecured corporate bond) of NT$3.5 billion (approximately US$0.1 billion). The proceeds were used to finance business developments, including investments for environmental protection and social development. Through this sustainable finance instrument, we are playing an important role in sustainability efforts and fulfilling our green commitments. For further information on our ESG initiatives, please visit our annual Sustainability ESG Report, publicly available on our ESG website at: https://www.cht.com.tw/en/home/cht/esg/esg-report/sustainability-esg-report. The information contained on our website is not incorporated herein by reference and does not constitute part of this annual report. C. Organizational Structure Set forth below is a diagram indicating our organizational structure as of March 31, 2026. Please refer to Exhibit 8.1 for the subsidiaries’ jurisdiction of incorporation. D. Property, Plant and Equipment Please refer to “—B. Business Overview” for a discussion of our property, plant and equipment.

You should read the following discussion of our financial condition and results of operations together with the consolidated financial statements and the notes to such statements included in this annual report. For the convenience of readers, NT dollar amounts used in this section for, and as of, the year ended December 31, 2025 have been translated into U.S. dollar amounts using US$1.00=NT$31.37, set forth in the statistical release of the Federal Reserve Board of the United States on December 31, 2025. The U.S. dollar translation appears in parentheses next to the relevant NT dollar amount. Overview A number of recent and expected future developments have had, and in the future may have, a material impact on our financial condition and results of operations. These developments include: •changes in our revenue composition and sources of revenue growth; •tariff adjustments; •capital expenditures as a result of technological advancements and changes in our business; •personnel expenses; and •taxation. Each of these developments is discussed below. Changes in our revenue composition and sources of revenue growth Our operating segments are (i) consumer business, (ii) enterprise business, (iii) international business and (iv) others. Operating segments are defined as components of an entity regarding which discrete financial information is available for regular evaluation of the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our measure of operating segment performance is mainly based on revenues and income before income tax. The table below sets forth the revenues from our principal lines of business as a percentage of total revenues for the periods indicated. Year Ended December 31 2023 2024 2025 Revenues: Consumer Business 61.4 60.9 60.7 Enterprise Business 32.7 32.8 32.7 International Business 4.1 4.3 4.0 Others 1.8 2.0 2.6 Total 100.0 100.0 100.0 Our consumer business has been an important source of revenues over the last three years. We derive our consumer business revenues from mobile service, fixed-line service, sales and other services. Revenues from our consumer business slightly decreased as a percentage of our total revenues in 2024 and 2025, mainly due to the revenue decreases in local and long distance voice services, partially offset by the increases in mobile and fixed broadband services. Our enterprise business has also been a significant contributor to our revenues over the last three years. We derive our enterprise business revenues from mobile service, fixed-line service, ICT business and other services. Revenues from our enterprise business increased as a percentage of our total revenues in 2024, mainly due to the growth in ICT business revenues, including IDC, cloud, cybersecurity, and big data services, driven by both project-based and recurring revenues. Revenues from our enterprise business decreased as a percentage of our total revenues in 2025, mainly due to the decrease in fixed-line services and other services revenue. 42 Our international business has been another important source of revenues over the last three years. We derive our international business revenues from fixed-line service, ICT business and other services. Revenues from our international business gradually increased as a percentage of our total revenues from 2023 to 2024, mainly due to the rising demand for ICT services from global clients, particularly leased circuit, IDC, cloud, integrated ICT solutions, and roaming services. The percentage of total revenues represented by our international business revenues decreased in 2025, mainly due to the decrease in international voice service revenue. Our other revenues as a percentage of our total revenues increased from 2023 to 2024, and continued to increase in 2025. This trend was mainly due to changes in the contribution from one of our subsidiaries, CHPT, which is a semiconductor testing company. Tariff adjustments We adjust our tariffs and offer promotional packages from time to time primarily in response to market conditions. We also from time to time are required to adjust our pricing in line with domestic regulations. According to the announcement by the NCC on March 15, 2024, this round, for 2024 to 2028, of adjustments applied to the wholesale tariffs for IP peering and domestic leased line services, which was subject to an adjustment by ∆CPI 5.09%. This round of adjustments also applied to the retail fees for xDSL and FTTx services (excluding ADSL, the services with downlink speed of 12 Mbps and below, and the services with downlink speeds of 300 Mbps and over), which was subject to an adjustment by ∆CPI-3.32%. The ∆CPI for 2024 was 2.18%, that was used for the tariff reduction starting from April 1, 2025 to March 31, 2026. The ∆CPI for 2025 that was used for the tariff reduction starting from April 1, 2026 was 1.66%. We do not expect such tariff reduction to have a material adverse impact on our results of operations. The NCC issued a notice for the promulgation of the “Upper Limits on the Termination Rates for Voice Service over Fixed Network Provided by Significant Market Powers” on June 5, 2023. The interconnection fees of local telephones, domestic long-distance or international calls, and mobile-to-fixed-line calls should be decreased gradually from June 5, 2023 to December 31, 2026 in four years. The interconnection rate between fixed-line customers and other fixed-line customers is reduced from NT$0.30 to NT$0.24 per minute during peak times and from NT$0.09 to NT$0.08 per minute during off-peak times. The interconnection rate for fixed line customers to domestic long distance or international is reduced from NT$0.31 to NT$0.27 per minute. The interconnection rate for calls initiated by mobile customers to fixed-line customers is reduced from NT$0.3943 to NT$0.2939 per minute during peak times and from NT$0.1883 to NT$0.1440 per minute during off-peak times. Besides the mandatory tariff reduction mentioned above, we, from time to time, voluntarily implemented tariff adjustments in our broadband and mobile businesses in the past few years to consolidate our market share. Capital expenditures as a result of technological advancements and changes in our business In recent years, we have focused on modernizing and upgrading our mobile services network and on developing our FTTx network, which enables high-speed information transmission over optical fiber. Constructing the fiber network in new buildings and areas with 300 Mbps (or above, up to 2 Gbps) for households and 10 Gbps for enterprises is our immediate task. Our ultimate goal is to optimize our capital expenditures by investing in infrastructures as well as supporting innovative and well-returned services/products. We evaluate our investment opportunities by benchmarking them against internal return requirements. 43 Personnel expenses Personnel expenses constitute a significant portion of our operating costs and expenses. In 2023, 2024 and 2025, personnel expenses represented 26.2%, 26.7% and 27.4% of our total operating costs and expenses, respectively. The table below sets forth information regarding our personnel expenses and as a percentage of our total operating costs and expenses for the periods indicated. Year Ended December 31 2023 2024 2025 (in billions of NT$, except percentages) Total personnel expenses 46.2 26.2 % 48.9 26.7 % 51.4 27.4 % Total operating costs and expenses 176.2 100.0 % 183.2 100.0 % 187.4 100.0 % At the time of our privatization, we settled all of our then existing defined benefit pension obligations in full. After completing our privatization on August 12, 2005, all of our continuing employees were deemed to have commenced employment as of August 12, 2005 for seniority purposes under our pension plans in effect after privatization. Under applicable ROC regulations, upon our privatization, the MOTC assumed the obligation to make annuity payments to all of our employees that retired before our privatization. Taxation The income tax rate for profit-seeking enterprises is 20% in the ROC. We benefit from tax incentives, including tax credits of up to 15% of some of our research and development expenses in accordance with the Statute for Innovating Industries. In addition, after-tax earnings not distributed to stockholders as dividends in the following year were assessed with a 5% unappropriated earnings tax. Under IFRSs, the 5% tax on unappropriated earnings is accrued during the year the earnings arise and adjusted to the extent that distributions are approved by the stockholders in the following year. A. Operating Results The following table sets forth our revenues, operating costs and expenses, income from operations and other financial data for the periods indicated. Year Ended December 31 2023 2024 2025 NT$ NT$ NT$ US$ (in billions) Revenues: Consumer Business 137.1 140.0 143.4 4.6 Enterprise Business 73.0 75.4 77.2 2.5 International Business 9.2 9.9 9.5 0.3 Others 3.9 4.7 6.0 0.1 Total revenues 223.2 230.0 236.1 7.5 Operating costs 141.8 146.6 149.1 4.7 Operating expenses: Marketing 23.5 25.1 26.0 0.9 General and administrative 6.8 7.2 7.7 0.3 Research and development 3.9 4.1 4.4 0.1 Expected credit loss 0.2 0.2 0.2 — Total operating expenses 34.4 36.6 38.3 1.3 Other income and expenses (0.6 ) 0.1 (0.1 ) — Income from operations 46.4 46.9 48.6 1.5 Non-operating income and expenses 0.6 0.9 1.7 0.1 Income before income tax 47.0 47.8 50.3 1.6 Income tax expense 8.9 9.3 9.8 0.3 Consolidated net income 38.1 38.5 40.5 1.3 Attributable to: Stockholders of the parent 37.0 37.2 38.7 1.2 Noncontrolling interests 1.1 1.3 1.8 0.1 44 The following table sets forth our revenues, operating costs and expenses, income from operations and other financial data as a percentage of our total revenues for the periods indicated. Year Ended December 31 2023 2024 2025 (as percentages of total revenues) Revenues: Consumer Business 61.4 60.9 60.7 Enterprise Business 32.7 32.8 32.7 International Business 4.1 4.3 4.0 Others 1.8 2.0 2.6 Total revenues 100.0 100.0 100.0 Operating costs 63.5 63.7 63.2 Operating expenses: Marketing 10.6 10.9 11.0 General and administrative 3.0 3.1 3.3 Research and development 1.7 1.8 1.8 Expected credit loss 0.1 0.1 0.1 Total operating expenses 15.4 15.9 16.2 Other income and expenses (0.3 ) — — Income from operations 20.8 20.4 20.6 Non-operating income and expenses 0.3 0.4 0.7 Income before income tax 21.1 20.8 21.3 Income tax expense 4.0 4.1 4.2 Consolidated net income 17.1 16.7 17.1 Attributable to: Stockholders of the parent 16.6 16.1 16.3 Noncontrolling interests 0.5 0.6 0.8 Each of our operating segments is managed separately due to the fact that each represents a strategic business unit that serves different types of customers. We measure our segment performances mainly based on revenues and income before income tax. The year ended December 31, 2025 compared with the year ended December 31, 2024 Revenues Our revenues increased to NT$236.1 billion (US$7.5 billion) in 2025 as compared to NT$230.0 billion in 2024, mainly due to an increase in revenues generated from consumer business, enterprise business and others. The details of which are as follows: Consumer Business Our consumer business revenues include mobile service revenues, fixed-line service revenues, sales revenues and other revenues. Consumer business revenues accounted for 60.9% and 60.7% of our revenues in 2024 and 2025, respectively. Our consumer business revenues increased by 2.4% from NT$140.0 billion in 2024 to NT$143.4 billion (US$4.6 billion) in 2025, mainly due to increases of mobile service revenues attributed to 5G mobile migration, sales revenues, and fixed broadband revenues, partially offset by a decrease of fixed voice revenues. Mobile services. Our mobile service revenues increased by 3.2% from NT$57.1 billion in 2024 to NT$58.9 billion (US$1.9 billion) in 2025, due to an increase of postpaid subscriber numbers and steady 5G migration. Fixed-line services. Our fixed-line service revenues slightly increased by 0.5% from NT$42.9 billion in 2024 to NT$43.1 billion (US$1.4 billion) in 2025. This increase was due to the increase of data communication and broadband access revenues driven by the successful upsell propelled by the HiNet Higher-Speed promotion plan, partially offset by the decreased voice revenues. Sales. Revenues generated from sales increased by 3.4% from NT$37.2 billion in 2024 to NT$38.5 billion (US$1.2 billion) in 2025, due to the stabilized smartphones supply. 45 Others. Our other revenues slightly increased by 1.9% from NT$2.8 billion in 2024 to NT$2.9 billion (US$0.1 billion) in 2025. Enterprise Business Our enterprise business revenues include mobile service revenues, fixed-line service revenues, ICT revenues and other revenues. Revenues from our enterprise business accounted for 32.8% and 32.7% of our revenues in 2024 and 2025, respectively. Revenues from our enterprise business increased by 2.5% from NT$75.4 billion in 2024 to NT$77.2 billion (US$2.5 billion) in 2025, due to the strong growth of ICT business revenue. Mobile services. Our mobile service revenues increased by 4.1% from NT$9.2 billion in 2024 to NT$9.5 billion (US$0.3 billion) in 2025, due to 5G mobile migration. Fixed-line services. Our fixed-line service revenues slightly decreased by 0.5% from NT$33.8 billion in 2024 to NT$33.6 billion (US$1.1 billion) in 2025, due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues driven by the speed upgrade. ICT Business. Revenues from our ICT business increased by 9.2% from NT$27.8 billion in 2024 to NT$30.4 billion (US$1.0 billion) in 2025, due to the growth of projects and recurring revenues for IDC, cloud, cybersecurity, and big data related services. Others. Our other revenues decreased by 19.0% from NT$4.6 billion in 2024 to NT$3.8 billion (US$0.1 billion) in 2025. International Business Revenues from international business accounted for 4.3% and 4.0% of our revenues in 2024 and 2025, respectively. Revenues from our international business decreased by 4.1% from NT$9.9 billion in 2024 to NT$9.5 billion (US$0.3 billion) in 2025, due to a decrease of fixed voice revenues, partially offset by the rising demand for leased line, IDC, cloud, and integrated ICT solutions. Fixed-line Services. Revenues from our fixed-line services decreased by 6.0% from NT$5.1 billion in 2024 to NT$4.8 billion (US$0.2 billion) in 2025, due to the strategic withdraw of international voice services. ICT Business. Revenues from our ICT business increased by 2.2% from NT$4.0 billion in 2024 to NT$4.1 billion (US$0.1 billion) in 2025, due to the rising demand for IDC, cloud, and integrated ICT solutions from global clients. Others. Our other revenues decreased by 22.9% from NT$0.8 billion in 2024 to NT$0.6 billion (US$0.02 billion) in 2025, due to a decrease in mobile service revenue. Others Other revenues accounted for 2.0% and 2.6% of our revenues in 2024 and 2025, respectively. Our other revenues increased from NT$4.7 billion in 2024 to NT$6.0 billion (US$0.1 billion) in 2025. The increase was due to higher revenues derived from CHPT. Operating Costs and Expenses Our operating costs and expenses include depreciation and amortization expenses, personnel expenses, cost of goods sold, interconnection and service costs, marketing expenses, costs of materials and maintenance, as well as spectrum usage fees. Operating costs and expenses increased by 2.3% from NT$183.2 billion in 2024 to NT$187.4 billion (US$6.0 billion) in 2025. This increase was due to increases in personnel expenses, ICT project costs, and utilities expenses. 46 Personnel expenses increased due to adjustments of employee benefit policies, leading to higher salaries, bonuses, and welfare costs. ICT project costs were mainly driven by the growth of ICT business. The increase in utilities expenses was primarily due to the adjustment in electricity prices. Operating Costs and Expenses by Business Segment Consumer Business Our consumer business costs and expenses increased by 1.6% from NT$112.7 billion in 2024 to NT$114.5 billion (US$3.7 billion) in 2025, primarily due to (i) increases in personnel expenses due to adjustments to employee benefit policies, and (ii) increases in utilities expenses resulting from electricity rate adjustments. Enterprise Business Our enterprise business operating costs and expenses increased by 3.4% from NT$63.6 billion in 2024 to NT$65.8 billion (US$2.1 billion) in 2025. This increase was due to (i) increases in personnel expenses due to adjustments to employee benefit policies, and (ii) increases in ICT project costs, primarily driven by the robust growth of our ICT business. International Business Our international business operating costs and expenses decreased by 3.9% from NT$9.0 billion in 2024 to NT$8.7 billion (US$0.3 billion) in 2025, due to decreases in service-related costs resulting from our strategic withdrawal of international voice services, partially offset by increases in personnel expenses due to the adjustments to employee benefit policies. Others The costs and expenses from our other business increased by 24.0% from NT$3.0 billion in 2024 to NT$3.7 billion (US$0.1 billion) in 2025, due to operating growth derived from CHPT. Other Income and Expenses We recorded net other income of NT$0.1 billion in 2024 and net other expenses of NT$0.1 billion (US$3.6 million) in 2025, respectively. The differences between 2024 and 2025 were due to the recognition of impairment loss on property, plant and equipment in 2025. Income from Operations and Operating Margin As a result of the foregoing, our income from operations increased by 3.6% from NT$46.9 billion in 2024 to NT$48.6 billion (US$1.5 billion) in 2025. Our operating margin slightly increased from 20.4% in 2024 to 20.6% in 2025. Non-operating Income and Expenses Our non-operating income increased from NT$0.9 billion in 2024 to NT$1.7 billion (US$54.8 million) in 2025. The increase was due to an increase in gain on disposal of investments accounted for using equity method. Income before Income Tax As a result of the foregoing, segment income before tax for our consumer business increased by 5.2% from NT$29.7 billion in 2024 to NT$31.4 billion (US$1.0 billion) in 2025; segment income before tax for our enterprise business decreased by 2.9% from NT$12.9 billion in 2024 to NT$12.5 billion (US$0.4 billion) in 2025; segment income before tax for our international business decreased by 6.9% from NT$2.4 billion in 2024 to NT$2.2 billion (US$0.1 billion) in 2025; and segment income before tax for our other business increased by 50.9% from NT$2.8 billion in 2024 to NT$4.2 billion (US$134.9 million) in 2025. 47 Income Tax Our income tax was NT$9.3 billion and NT$9.8 billion (US$0.3 billion) in 2024 and 2025, respectively. Our effective tax rate decreased slightly from 19.5% in 2024 to 19.4% in 2025. Net Income As a result of the foregoing, our net income attributable to stockholders of the parent was NT$37.2 billion and NT$38.7 billion (US$1.2 billion) in 2024 and 2025, respectively. Our net margin increased from 16.1% in 2024 to 16.3% in 2025. The year ended December 31, 2024 compared with the year ended December 31, 2023 Revenues Our revenues increased to NT$230.0 billion in 2024 as compared to NT$223.2 billion in 2023, mainly due to an increase in revenues generated from consumer business, enterprise business and international business. The details of which are as follows: Consumer Business Our consumer business revenues include mobile service revenues, fixed-line service revenues, sales revenues and other revenues. Consumer business revenues accounted for 61.4% and 60.9% of our revenues in 2023 and 2024, respectively. Our consumer business revenues increased by 2.1% from NT$137.1 billion in 2023 to NT$140.0 billion in 2024, mainly due to increases of mobile service revenues attributed to 5G mobile migration, sales revenues, and fixed broadband revenues, partially offset by a decrease of fixed voice revenues. Mobile services. Our mobile service revenues increased by 3.5% from NT$55.1 billion in 2023 to NT$57.1 billion in 2024 due to an increase of postpaid subscriber numbers, steady 5G migration and roaming service recovery. Fixed-line services. Our fixed-line service revenues slightly increased by 0.7% from NT$42.6 billion in 2023 to NT$42.9 billion in 2024. This increase was due to the increase of data communication and broadband access revenues driven by the successful upsell propelled by the HiNet Higher-Speed promotion plan, partially offset by the decreased voice revenues. Sales. Revenues generated from sales increased by 1.1% from NT$36.8 billion in 2023 to NT$37.2 billion in 2024, due to the stabilized smartphones supply and increased terminal sales. Others. Our other revenues increased by 9.7% from NT$2.6 billion in 2023 to NT$2.8 billion in 2024. This was due to an increase in ICT business revenues. Enterprise Business Our enterprise business revenues include mobile service revenues, fixed-line service revenues, ICT revenues and other revenues. Revenues from our enterprise business accounted for 32.7% and 32.8% of our revenues in 2023 and 2024, respectively. Revenues from our enterprise business increased by 3.3% from NT$73.0 billion in 2023 to NT$75.4 billion in 2024 due to the strong growth of ICT business revenue. Mobile services. Our mobile service revenues increased by 0.4% from NT$9.1 billion in 2023 to NT$9.2 billion in 2024 due to 5G mobile migration. Fixed-line services. Our fixed-line service revenues slightly decreased by 0.6% from NT$34.0 billion in 2023 to NT$33.8 billion in 2024 due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues driven by the speed upgrade. 48 ICT Business. Revenues from our ICT business increased by 12.5% from NT$24.7 billion in 2023 to NT$27.8 billion in 2024, due to the growth of projects and recurring revenues for IDC, cloud, cybersecurity, 5G+AIoT and big data related services. Others. Our other revenues decreased by 11.2% from NT$5.2 billion in 2023 to NT$4.6 billion in 2024. This decrease was due to a decrease in the satellite government subsidies. International Business Revenues from international business accounted for 4.1% and 4.3% of our revenues in 2023 and 2024, respectively. Revenues from our international business increased by 7.9% from NT$9.2 billion in 2023 to NT$9.9 billion in 2024, due to the rising demand for leased circuit, IDC, cloud, and integrated ICT solutions. Fixed-line Services. Revenues from our fixed-line services decreased by 5.6% from NT$5.4 billion in 2023 to NT$5.1 billion in 2024, due to the strategic withdraw of international voice services. ICT Business. Revenues from our ICT business increased by 41.4% from NT$2.8 billion in 2023 to NT$4.0 billion in 2024, due to the rising demand for IDC, cloud, and integrated ICT solutions from global clients. Others. Our other revenues decreased by 14.8% from NT$1.0 billion in 2023 to NT$0.8 billion in 2024, due to a decrease from government subsidies for satellites construction. Others Other revenues accounted for 1.8% and 2.0% of our revenues in 2023 and 2024, respectively. Our other revenues increased from NT$3.9 billion in 2023 to NT$4.7 billion in 2024. The increase was due to higher revenues derived from CHPT. Operating Costs and Expenses Our operating costs and expenses include depreciation and amortization expenses, personnel expenses, cost of goods sold, interconnection and service costs, marketing expenses, costs of materials and maintenance, as well as spectrum usage fees. Operating costs and expenses increased by 4.0% from NT$176.2 billion in 2023 to NT$183.2 billion in 2024. This increase was due to increases in personnel expenses, ICT project costs, and utilities expenses. Personnel expenses increased due to adjustments of employee benefit policies, leading to higher salaries, bonuses, and welfare costs. ICT project costs were mainly driven by the growth of ICT business. The increase in utilities expenses was primarily due to the adjustment in electricity prices. Operating Costs and Expenses by Business Segment Consumer Business Our consumer business costs and expenses increased by 2.1% from NT$110.3 billion in 2023 to NT$112.7 billion in 2024, primarily due to (i) adjustments in employee benefit policies, and (ii) increases in maintenance costs, mainly driven by the growth of our core business. Enterprise Business Our enterprise business operating costs and expenses increased by 6.6% from NT$59.7 billion in 2023 to NT$63.6 billion in 2024. This increase was due to an increase in ICT project costs, primarily driven by the robust growth of our ICT business. 49 International Business Our international business operating costs and expenses increased by 7.3% from NT$8.4 billion in 2023 to NT$9.0 billion in 2024, due to the increase in ICT-related costs, which is in turn driven by the growth of our public cloud and ICT business. Others The costs and expenses from our other business increased by 5.9% from NT$2.8 billion in 2023 to NT$3.0 billion in 2024, due to operating growth derived from CHPT. Other Income and Expenses We recorded net other expenses of NT$0.6 billion in 2023 and net other income of NT$0.1 billion in 2024, respectively. The differences between 2023 and 2024 were due to the impairment loss on investment properties and property, plant and equipment in 2023. Income from Operations and Operating Margin As a result of the foregoing, our income from operations increased by 1.1% from NT$46.4 billion in 2023 to NT$46.9 billion in 2024. Our operating margin slightly decreased from 20.8% in 2023 to 20.4% in 2024. Non-operating Income and Expenses Our non-operating income increased from NT$0.6 billion in 2023 to NT$0.9 billion in 2024. The increase was due to an increase in interest income, driven by the increase in acquisition of time deposits and negotiable certificates of deposit. Income before Income Tax As a result of the foregoing, segment income before tax for our consumer business increased by 3.0% from NT$28.9 billion in 2023 to NT$29.7 billion in 2024; segment income before tax for our enterprise business decreased by 10.3% from NT$14.4 billion in 2023 to NT$12.9 billion in 2024; segment income before tax for our international business increased by 11.3% from NT$2.1 billion in 2023 to NT$2.4 billion in 2024; and segment income before tax for our other business increased by 75.7% from NT$1.6 billion in 2023 to NT$2.8 billion in 2024. Income Tax Our income tax was NT$8.9 billion and NT$9.3 billion in 2023 and 2024, respectively. Our effective tax rate increased slightly from 19.0% in 2023 to 19.5% in 2024. Net Income As a result of the foregoing, our net income attributable to stockholders of the parent was NT$37.0 billion and NT$37.2 billion in 2023 and 2024, respectively. Our net margin decreased from 16.6% in 2023 to 16.1% in 2024. 50 B. Liquidity and Capital Resources Liquidity The following table sets forth the summary of our cash flows for the periods indicated: Year Ended December 31 2023 2024 2025 NT$ NT$ NT$ US$ (in billions) Net cash provided by operating activities 74.6 79.2 77.5 2.5 Net cash used in investing activities (50.2 ) (35.3 ) (28.3 ) (0.9 ) Net cash used in financing activities (40.7 ) (41.5 ) (48.5 ) (1.6 ) Effect of exchange rate changes 0.0 0.0 0.0 0.0 Net increase (decrease) in cash and cash equivalents (16.4 ) 2.4 0.7 0.0 Cash and cash equivalents at end of year 33.8 36.2 36.9 1.2 Our primary source of liquidity is cash flow from operations, which represents operating profit adjusted for non-cash items, primarily depreciation and amortization and changes in current assets and liabilities. Notes 23, 24 and 25 to our consolidated financial statements, included elsewhere in this annual report, provide additional details as to our bank loans and bonds payable. We believe that our working capital is sufficient to meet our present cash flow requirements. In 2025, we generated NT$77.5 billion (US$2.5 billion) in net cash from operating activities as compared to NT$79.2 billion in 2024. The decrease was primarily due to a decrease in trade notes and accounts payable and an increase in inventories. In 2024, we generated NT$79.2 billion in net cash from operating activities as compared to NT$74.6 billion in 2023. The increase was primarily due to an increase in income before income tax arising from our operating performance, an increase in contract liabilities from advance receipts of project business, and an increase in trade notes and accounts payable. In 2023, we generated NT$74.6 billion in net cash from operating activities as compared to NT$76.0 billion in 2022. The decrease was primarily due to a decrease in income before income tax arising from our operating performance, an increase in income tax payment and a decrease in trade notes and accounts payable. Historically, our net cash from operating activities has been sufficient to cover our capital expenditures, including ongoing expansion and modernization of our networks. In 2025, our net cash used in investing activities was NT$28.3 billion (US$0.9 billion), a decrease from NT$35.3 billion in 2024. The decrease was primarily due to an increase in proceeds from time deposits and negotiable certificates of deposit with maturities of more than three months partially offset by an increase in financial assets at FVOCI. In 2024, our net cash used in investing activities was NT$35.3 billion, a decrease from NT$50.2 billion in 2023. The decrease was primarily due to an increase in proceeds from time deposits and negotiable certificates of deposit with maturities of more than three months. In 2023, our net cash used in investing activities was NT$50.2 billion, an increase from NT$30.8 billion in 2022. The increase was primarily due to an increase in acquisition and disposal of time deposits and negotiable certificates of deposit with maturities of more than three months. In 2025, our net cash used in financing activities totaled NT$48.5 billion (US$1.6 billion), which mainly reflected NT$38.8 billion in dividends being paid. In 2024, our net cash used in financing activities totaled NT$41.5 billion, which mainly reflected NT$36.9 billion in dividends being paid. 51 In 2023, our net cash used in financing activities totaled NT$40.7 billion, which mainly reflected NT$36.5 billion in dividends being paid. Capital Resources We have historically financed our capital expenditure requirements through operating cash flows and corporate bonds. In future years, the expansion and upgrade of our infrastructures, such as 5G mobile broadband, FTTx, international submarine cables, multi-orbit network, and IDC, introducing AI/automation technology to BSS/OSS, developing innovative solutions, and implementing ESG will be the focus of our capital expenditures. In the meantime, we also expect to make dividend payments on an ongoing basis. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information.” Furthermore, we may require working capital from time to time to finance purchases of materials for our maintenance and other overhead expenses. Over the next twelve months, we expect to implement our strategies about capital expenditures, dividend payments, debt repayments and other commitments by primarily relying on cash generated from operations, corporate bonds and loans from commercial banks. As of December 31, 2025, our primary source of liquidity was NT$36.9 billion (US$1.2 billion) in cash and cash equivalents. In addition, the unused line of credit for unsecured bank loans and secured bank loans amounted to NT$27.0 billion (US$0.9 billion) and NT$15.0 million (US$0.5 million), respectively, as of December 31, 2025. As of December 31, 2025, we had bonds payable in the amount of NT$25.2 billion (US$0.8 billion) at interest rates ranging from 0.42% to 1.73%. As of December 31, 2025, our subsidiary, Senao International Co., Ltd. had short-term unsecured loans of NT$0.3 billion (US$10.8 million) at interest rates ranging from 2.05% to 2.08%. As of December 31, 2025, our subsidiary, Light Era Development Co., Ltd. had long-term secured loans of NT$1.6 billion (US$51.0 million) at interest rates of 2.10%. As part of the government’s effort to upgrade the existing telecommunications infrastructure, we and other public utility companies were required by the ROC government to contribute a certain amount of money to a Piping Fund, administered by the Taipei City Government. A total of NT$1.0 billion was contributed by us on August 15, 1996. This fund is used to finance various telecommunications infrastructure projects. We accounted for the contribution as other financial assets on our consolidated balance sheets. Note 41 to our consolidated financial statements included elsewhere in this annual report provides a description of the assets that are pledged as collaterals for bank loans, custom duties of the imported materials and warranties of contract performance, the trust account the Company entrusts to Land Bank of Taiwan for fund control and property rights management. Capital Expenditures Our capital expenditures in 2023, 2024 and 2025 were mainly to support operations. We have financed our capital expenditures using cash flows operations and corporate bonds. The following table sets forth a summary of our capital expenditures for the periods indicated. Year Ended December 31 2023 2024 2025 (in billions of NT$, except percentages) Capital Expenditures: Mobile communications business 11.1 36 % 9.7 34 % 8.2 30 % Others 19.6 64 % 19.1 64 % 19.5 70 % Total capital expenditures 30.7 100 % 28.8 100 % 27.7 100 % 52 The following table sets forth a summary of our planned capital expenditures for the year ending December 31, 2026. Year Ending December 31, 2026 (in billions of NT$, except percentages) Capital Expenditures: Mobile communications business 7.7 24 % Others 24.2 76 % Total capital expenditures 31.9 100 % We expect our total capital expenditures to be approximately NT$31.9 billion in 2026. Our capital expenditures for 2026 are planned to be allocated to new construction of domestic and international submarine cable, the deployment of multi-orbit satellite networks, the expansion of cloud AI internet data center, the investments in maintaining a competitive edge of mobile and fix broadband business, the enhancement regarding the resilience of power and air conditioning equipment, as well as information security and cybersecurity infrastructure. We expect to finance these capital expenditures with our cash flows from operations. 53 Contractual Obligations Set forth below are our total contractual obligations as of December 31, 2025. Payments Due by Period Total Less than 1 Year 1-3 years 3-5 years More than 5 years (in billions of NT$) Contractual Obligations(1) Short-term loans 0.3 0.3 — — — Long-term loans 1.6 — 1.6 — — Bonds payable 25.8 2.2 15.3 7.3 1.0 Lease liabilities(2) 11.2 3.9 5.4 1.7 0.2 Total 38.9 6.4 22.3 9.0 1.2 (1)Unfunded defined benefit obligation is not included as the schedule of payments is difficult to determine. We made pension contributions of approximately NT$1.1 billion (US$35.6 million) in 2025 and expected to make pension contributions of approximately NT$1.1 billion (US$34.9 million) in 2026. See Note 29 to our consolidated financial statements for additional details regarding our pension plan. (2)Operating lease obligations are described in Note 38 to our consolidated financial statements included elsewhere in the annual report. As of December 31, 2025, we had remaining commitments under non-cancelable contracts with various parties, including the acquisition of property, plant and equipment of NT$21.7 billion (US$0.7 billion) and acquisition of telecommunications-related inventory of NT$8.0 billion (US$0.3 billion). We committed that when our ownership interest in NCB is greater than 25% and NCB encounters financial difficulty or capital adequacy ratio of NCB cannot meet the related regulation requirements, we will provide financial support to assist NCB to maintain in healthy financial condition. We entered into long term energy purchase contracts with the suppliers, under which the contract terms specify the performance periods, quantities and prices that we are required to fulfill. Inflation We do not believe that inflation in Taiwan has had a material impact on our results of operations in 2023, 2024 and 2025. Recent Accounting Pronouncements Major differences between IFRSs and Taiwan IFRSs While we have adopted Taiwan IFRSs for ROC reporting purposes, we adopt IFRSs for certain filings with the SEC, including our annual reports on Form 20-F for the year ended December 31, 2013 and thereafter. Taiwan IFRSs differs from IFRSs in certain significant respects, including to the extent that any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC. Therefore, these pronouncements will not be applicable to Taiwan IFRSs until endorsed by the FSC. Some of the major differences between IFRSs and Taiwan IFRSs that are relevant to us as of the date of this annual report are set forth below. •the “income taxes on unappropriated earnings” should be recognized at the year of earnings under IFRSs, while it should be recognized at the year of distribution under Taiwan IFRSs. •prior to incorporation, according to the laws and regulations applicable to state-owned enterprises in Taiwan, we recorded revenues from fixed-line service at the time the connection service was performed or the prepaid card was sold. Upon incorporation, net assets greater than capital stock was credited as additional paid-in capital. Part of our additional paid-in capital was from unearned revenues from fixed-line services as of that date. Under IFRSs, following the revenues recognition guidance, the above service revenues should be treated as deferred income and recognized over the time when the service is continuously provided or as consumed. Therefore, upon our first adoption of IFRSs, we should retrospectively decrease additional paid-in capital while increasing unappropriated earnings on the transition date of January 1, 2012. There is no difference in recognition of unearned revenues or 54 deferred income between IFRSs and Taiwan IFRSs. However, according to the guidance released by the TWSE in March 2012, which is a part of Taiwan IFRSs, the additional paid-in capital under ROC GAAP that is not specifically promulgated under Taiwan IFRSs should not be adjusted on the transition date of January 1, 2012. Therefore, we retain such additional paid-in capital under Taiwan IFRSs. It is difficult for us to determine the differences between Taiwan IFRSs and IFRSs on our financial statements as any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC. Other recent accounting pronouncements under IFRSs For a summary of new standards, amendments and interpretations issued under IFRSs but not effective for 2025 and which have not been adopted early by us, see Note 5 to our consolidated financial statements included elsewhere in this annual report. C. Research and Development, Patents and Licenses Our research and development priorities for 2025 included innovative Information and Communication Technology (ICT) services, advanced cloud-network integration technologies, and energy-saving technologies. Key research and development achievements and projects are described as follows: 1.Innovative Information and Communication Technology (ICT) services •AIoT: AI-optimized intersection traffic signal adaptive control using connected-vehicle data and edge computing, AI-powered traffic incident decision support based on video analytics and deep learning, technology-enabled traffic and environmental enforcement using multi-sensor monitoring and image recognition, smart inspection using unmanned vehicles with high-resolution imaging and automated route planning, and smart port and harbor leveraging IoT sensing and digital twin technologies, etc. •Smart life: metaverse platform, metaverse virtual exhibitions, live holographic performance, product recommendation chatbot, AI-powered SMS fraud prevention, monitoring system for home-based hospitalization, etc. •Artificial intelligence: speech recognition and generation, text analysis and generation, customer service chatbots, AI Platform-as-a-Service (AI PaaS), human activity recognition, facial recognition access control, domain-specific large language models, multimodal-content generation, etc. •Cybersecurity: Post-Quantum Cryptography (PQC) certificates, AI fraud prevention, Fast Identity Online (FIDO), mobile authentication, blockchain and smart contracts, zero trust security, cybersecurity for vehicle-to-everything (V2X), etc. 2.Advanced cloud-network integration technologies •Network communication: open all-photonic network (Open APN), Wi-Fi 7 wireless network, 5G/5G-Advanced SA network, 5G edge computing, 5G private network, 5G Network Open API, multi-orbit satellite network, network functions virtualization/cloudification, ultra-high-speed access network, etc. •Network operation, maintenance and management: autonomous network management, network digital twin, mobile customer experience analysis, mobile base station energy saving, telco cloud management, smart home network management, etc. •Cloud computing: multi-cloud management platform, Data-Centric Infrastructure (DCI) architecture, Remote Direct Memory Access (RDMA) accelerator, cloud Data Processing Unit (DPU) computing technology, edge computing platform, Model Context Protocol (MCP), etc. 3.Energy-saving technologies •energy-saving solutions for data centers and networks, immersion rack performance verification technology, low-carbon power supply dispatch technology, etc. 55 In 2025, we applied for a total of 161 patents and obtained 148 patents. We also received 25 major awards in Taiwan and internationally. D. Trend Information See “—Overview” for a discussion of the most significant recent trends that have had, and in the future may have, a material impact on our results of operations, financial condition and capital expenditures. In addition, see discussions included in this Item for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition. E. Critical Accounting Estimates Information about critical accounting judgments and key sources of estimation uncertainty and assumption, please refer to Note 4 to our consolidated financial statements included in this annual report for details.