We have a broad customer base in Taiwan.  We are an integrated full-service telecommunications provider in Taiwan.  We are the largest telecommunications service provider in Taiwan with a broad customer base across all of  our service offerings. Despite deregulation and an increase in competition in the Taiwanese telecommunications  industry, we have maintained a market leading position in our primary service offerings of fixed communications,  mobile communications and internet services. We believe our broad customer base in each of our service  offerings grants us a distinct competitive advantage to maintain our existing customers and attract new  customers and increases the chance of success for the launch and popularization of new products. As the  telecommunications industry continues its trend of converging fixed communications, mobile communications  and internet services, we believe that our comprehensive service offerings places us in a strong position to offer  converged products and services to our customers.  We are the largest telecommunications service provider in Taiwan with a leading position in fixed  communications services, mobile communications services and internet services.  Broad range of communications products and services . We believe that our ability to provide an attractive  and comprehensive range of telecommunications services positions us to provide bundled and value-added  services to our business and residential customers. In addition, we are able to offer innovative integrated services  and tariff packages to meet the specific needs of our customers.  Broad network coverage . The breadth of our network and our ownership of the so called “last mile”  infrastructure in Taiwan, which comprises the connection between the local telephone service provider’s  switching centers to the end-users’ buildings or homes, provide us with access to existing and potential customers  and creates a platform for expanding our services. As of December 31, 2010, substantially all of our installed  telephone lines were capable of delivering ADSL services and network coverage of ADSL was approximately  97%. In order to provide higher bandwidth services for our customers, we are constructing our FTTx network. As  of December 31, 2010, network coverage of FTTx with speed of 30Mbps was approximately 79.3%. In addition,  our mobile communications network provides nationwide coverage. Our large cellular spectrum allocation  together with our network of 16,215 base stations position us well for the continued expansion of our mobile  services in Taiwan.  Brand awareness, distribution channels and customer service . Our principal brands “Chunghwa Telecom”  and “HiNet” have a reputation for quality, reliability and sophisticated technology. In particular, we are the  leading internet service provider in Taiwan through HiNet. We serve our large and well-established customer base  through our extensive customer service network in Taiwan, including 23 operations offices, 313 service centers,  221 exclusive service stores and six customer service centers. We also offer comprehensive and high-quality  point of sale and after sale services, and we provide web-based customer services. Moreover, our extensive  sales and distribution channels help us attract additional customers and develop new business opportunities. In  2010, we obtained several domestic and international awards which recognized our service quality, corporate  governance and corporate social responsibility. In the Reader’s Digest Trusted Brands Award, we have stood out  and won the Platinum Award of Telecom Company in Taiwan for seven consecutive years since 2004. We were  awarded “Best Managed Company,” “Best Corporate Governance, “Best Corporate Social Responsibility” and  “Best Commitment to Strong Dividends” in Taiwan by FinanceAsia. We were also awarded the “Excellence in  Corporate Social Responsibility Award” by the Common Wealth Magazine, “Excellent Service Award 2010” by  Global Views, “Best Corporate Governance and Disclosure” in the Greater China Awards 2010 by IR Magazine,  and “Excellence for Financial Disclosure Procedures” in Asia Pacific by IR Global Rankings.  Operational expertise . Our management and employees have extensive operating experience and technical  knowledge, which we believe cannot be easily replicated by competitors. We also believe we will continue to  attract and retain high quality employees.  Comprehensive customer billing infrastructure . As Taiwan’s leading telecommunications services provider,  we have extensive resources and infrastructure relating to billing services. In particular, we issue, in the  aggregate, approximately 17 million invoices, including integrated bills, every month. We intend to continue  taking advantage of this unique attribute by offering bill collection services to internet content providers and  other entities that lack the necessary resources and infrastructure for effective customer billing.  18 PART I