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International leased line and international data services.  Our international leased line and international data revenues increased by 19.1% from NT$1.68 billion in 2009 to NT$2.00 billion in 2010 (US$ 68.70 million). The increase was mainly because of the overseas market expansion and the increased demand of multinational corporations. 

## Operating Costs and Expenses 

Our operating costs and expenses increased by 2.2% from NT$142.0 billion in 2009 to NT$145.0 billion (US$4.9 billion) in 2010. This increase was primarily due to the increases in costs of handsets sold. As a percentage of revenues, operating costs and expenses increased from 71.5% in 2009 to 71.7% in 2010. 

## Operating Costs 

Operating costs include depreciation and amortization expense, personnel expenses, cost of goods sold, interconnection and service expense, costs of materials and maintenance and spectrum usage and license fees. 

Our operating costs increased by 2.3% from NT$112.7 billion in 2009 to NT$115.3 billion (US$3.9 billion) in 2010. This increase was principally a result of an increase of NT$3.0 billion (US$104.3 million) in cost of goods sold, an increase of NT$1.2 billion (US$39.8 million) in personnel expenses mainly due to increase in bonus expense because of net income growth, and a NT$0.6 billion (US$21.4 million) increase in ICT costs due to the increase in revenue, partially offset by a decrease of NT$2.2 billion (US$75.4 million) in depreciation. 

## Marketing 

Our marketing expenses, which include personnel expenses, expenses relating to advertising and marketing- related activities and provision for bad debt increased by 0.8% from NT$22.3 billion in 2009 to NT$22.5 billion (US$0.8 billion) in 2010. This increase was principally a result of a NT$0.5 billion (US$18.4 million) increase in bonus, partially offset by a decrease of NT$0.3 billion (US$10.8 million) in expenses relating to advertising and other marketing-related activities. 

## General and administrative 

Our general and administrative expenses increased by 6.6% from NT$3.8 billion in 2009 to NT$4.0 billion (US$0.1 billion) in 2010. This increase was principally a result of a NT$0.1 billion (US$4.6 million) increase due to the consolidation of our subsidiaries previously accounted for under the equity method, and a NT$0.1 billion (US$2.4 million) increase in bonus. 

## Research and development 

Our research and development expenses remained flat at NT$3.2 billion (US$0.1 billion) in 2009 and 2010. 

## Operating Costs and Expenses by Business Segment 

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