PART I 32 (1)  Data from the Department of Population, Ministry of the Interior, Republic of China  (2)  The number of mobile customers is based on the number of subscriber identification module, or SIM, cards.  Since 2006, the total number of mobile customers in Taiwan included personal handy-phone system, PHS and 3G  customers.  (3)  Data from the statistical monthly release by the National Communications Commission in the Republic of China,  which include mobile revenues 2G, 3G and PHS.  (4)  Includes GSM, GPRS and 3G services.  (5)  Measures the rate of customer disconnections from mobile service, determined by dividing (a) our aggregate  voluntary and involuntary deactivations (excluding deactivations due to customers switching from one of our  mobile services to another) during the relevant period by (b) the average number of customers during the period  (calculated by averaging the number of customers at the beginning of the period and the end of the period), and  multiplying the result by the fraction where (c) the numerator is 12 and (d) the denominator is the number of  months in that period.  (6)  Average minutes of usage per user per month is calculated by dividing the total minutes of usage during the period  by the average of the number of our mobile customers on the first and last days of the period and dividing the result  by the number of months in the relevant period.  (7)  Average revenue per user per month is calculated by dividing our aggregate mobile services revenues during the  relevant period by the average of the number of our mobile customers on the first and last days of the period and  dividing the result by the number of months in the relevant period.  (8)  Due to reclassification of our business segments in 2009, non-core value-added service revenues are now included  under mobile services. Revenues for 2008 have been recalculated to reflect the new classifications.  Total mobile customers in Taiwan have reached approximately 28 million as of December 31, 2010. Mobile  penetration was approximately 120.2% on the same date. The overall mobile services market experienced  a slight decrease of 1% in revenues in 2010 due to the mandatory tariff reduction imposed by the National  Communications Commission.  We began offering prepaid card services in October 2000 and prepaid 3G card services in February 2008.  As of December 31, 2010, we had approximately 0.9 million prepaid customers representing approximately 9.8%  of our total mobile customers. Prepaid customers do not pay monthly fees but pay a higher usage charge on a per  second basis. Once the prepayment has been fully utilized, a prepaid customer can make additional prepayments  to continue the service. Alternatively, the customer may convert to become a post-paid customer while retaining  the same telephone number.  We offer incentives, such as mobile handset subsidies, when new customers agree to sign a service contract  with us or when existing customers renew their contracts with us ranging from 18 months to 30 months. We  generally offer subsidies on mobile handsets equipped with more advanced data functions to promote the  expansion of our GPRS and 3G mobile services. Smartphones accounted for 25% of the total handsets we offered  in 2010, and we expect that the percentage to reach more than 35% in 2011. Since smartphones typically have  higher handset subsidies, we expect our average subsidy per handset to increase slightly in 2011.  While pricing has declined, the number of post-paid customers has increased which had a positive impact  on traffic volume. We have also experienced a significant increase in the mobile internet service. The average  minutes of usage per customer slightly declined in both 2008 and 2009 due to the deteriorating macroeconomic  conditions in Taiwan. Since the economy in Taiwan started to improve in 2010, both the customer demand and  the minutes of usage have increased.  Our tariffs for post-paid mobile customers primarily consist of usage fees and monthly fees. When our  customers are outside Taiwan, they pay roaming charges plus international long distance charges and, where  applicable, local charges in roaming destinations. We negotiated with Vodafone, the largest telecommunications  service provider in Europe, in November 2009 to join their global telecommunications alliance. As a result, we  began offering our customers discounts on their roaming charges starting December 1, 2009. We charge a flat fee  per transaction for our short messaging service and a fee per packet for our GPRS based on the volume of data  transmitted. We also offer discounts on usage fees for calls made between our mobile customers to encourage  subscription to our mobile service. Our 3G service also provides a monthly flat rate service to our customers  using our 3G service for internet purposes. 