PART I Year ended December 31, 2008 2009 2010 NT$ NT$ NT$ (in billions) Broadband access revenues: Broadband access (ADSL and FTTx) 20.0  19.9  20.3  We provide FTTx internet services, with downlink speeds of 10, 20, 50 and 100 Mbps, in 2010. The  number of our FTTx customers increased significantly in 2008, 2009 and 2010 as prices became more affordable,  coverage areas expanded and customer demand for higher bandwidth heightened. Many of new FTTx customers  have migrated from using our HiNet dial-up and ADSL internet services. Of the approximately 2.04 million  FTTx customers as of December 31, 2010, approximately 84.8% were those that migrated from our ADSL  services. We also provide FTTx access services to other internet service providers that do not have their own  network infrastructure, and as a result, our FTTx customers also include some customers that only use us for the  FTTx data access line and choose another ISP to provide internet services. Of the approximately 2.04 million  FTTx customers as of December 31, 2010, approximately 1.8 million were also our HiNet subscribers. We  currently offer various promotional packages to encourage more migration of our HiNet dial-up and ADSL  subscribers to our FTTx service. As of December 31, 2010, 44.4% of HiNet subscribers accessed the internet  through our FTTx service, and we expect this ratio to increase in the future as a result of these promotional  measures.  Our market share of Taiwan’s broadband market was approximately 83.8%, 83.0% and 80.5% in 2008,  2009 and 2010, respectively.  The following table sets forth our broadband service customers as of each of the dates indicated.  Our ADSL service offers downlink speeds that range from 256 kilobits per second to 8 Mbps and uplink  speeds that range from 64 kilobits per second to 640 Kbps. In December 2001, we began providing symmetrical  digital service with uplink and downlink speeds of 512 kilobits per second. After our promotions in 2004 to  increase customer access speeds, including our promotions for customers to upgrade to higher-speed access, the  average uplink and downlink speeds of our customers have increased substantially. In 2010, we offered ADSL  low speed customers a free upgrade to high speed ADSL service. As of December 31, 2010, approximately 84%  of our customers had subscribed for downlink speeds of over 2 Mbps, and our average downlink speed was 6.1  Mbps. Our FTTx service offers downlink speeds of 10, 20, 50 and 100 Mbps matched with uplink speeds of 2, 2,  3 and 5 Mbps, respectively.  We have experienced competition in the ADSL and FTTx service market from other fixed line operators  and cable operators. Our strategy is to continue the migration of ADSL subscribers to FTTx so as to increase  the average revenue per user. In addition, in order to strengthen customer loyalty, we have provided free  speed upgrades for ADSL customers who were using lower speed services since August 2010. Due to the  aforementioned initiatives, we were able to maintain the number of our broadband subscribers.  Our revenues from providing internet access are generated from installation fees, monthly subscription fees  and usage fees from fixed line telephone calls made by dial-up customers to access HiNet, which are recorded as  domestic data services revenues rather than as local revenues. Usage fees from fixed line telephone calls made to  access internet service providers other than HiNet are recorded as local revenues.  28 As of December 31, 2008 2009 2010 ADSL service customers (in thousands) 3,241  2,666  2,329  FTTx service customers (in thousands) 1,070  1,638  2,045  Average downlink speed (Mbps) 4.33  5.1  6.1 