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## Operating Costs and Expenses by Business Segment 

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## Domestic fixed communications 

Our domestic fixed communications costs and expenses decreased by 2.6% from NT$69.5 billion in 2008 to NT$67.6 billion in 2009, primarily due to a NT$0.6 billion decrease in material costs and expenses. Our depreciation and amortization expenses relating to our domestic fixed communications business decreased by 5.9% from NT$25.5 billion in 2008 to NT$24.0 billion in 2009. The decrease was primarily due to a decrease in depreciation expenses reflecting a slowdown in capital expenditures. 

## Mobile communications 

Our mobile communications operating costs and expenses increased by 1.0% from NT$57.7 billion in 2008 to NT$58.3 billion in 2009. This increase was primarily due to an increase of NT$1.1 billion in leased line expenses and an NT$0.3 billion increase in connection fees. Our depreciation and amortization expenses relating to mobile communications business decreased by 5.5% from NT$8.9 billion in 2008 to NT$8.4 billion in 2009. This decrease was mainly due to a decrease in depreciation expenses reflecting a slowdown in capital expenditures. 

## Internet 

Our internet operating costs and expenses increased by 11.5% from NT$13.5 billion in 2008 to NT$15.1 billion in 2009. This increase was primarily due to a NT$0.6 billion increase in leased line expenses and a NT$0.5 billion increase in expenses related to our corporate solution services and ICT. Our depreciation and amortization expenses relating to our internet business decreased by 1.1% from NT$2.4 billion in 2008 to NT$2.3 billion in 2009. The decrease is mainly due to a slowdown in capital expenditures. 

## International fixed communications 

Our international fixed communications costs and expenses decreased by 2.6% from NT$14.6 billion in 2008 to NT$14.2 billion in 2009. The decrease was primarily due to a decrease of NT$0.6 billion in interconnection fees and a NT$0.3 billion decrease in connection fees. Our depreciation and amortization expenses relating to international fixed communications business increased by 5.9% from NT$1.3 billion in 2008 to NT$1.4 billion in 2009. The slight increase is mainly due to an increase in capital expenditures. 

## Others 

Our costs and expenses from our other business increased by 21.1% from NT$3.8 billion in 2008 to NT$4.6 billion in 2009. The increase was primarily due to the consolidation of our subsidiaries. 

## Income from operations and Operating Margin 

As a result of the foregoing, our income from operations decreased by 3.7% from NT$58.6 billion in 2008 to NT$56.4 billion in 2009. Our operating margin decreased from 29.0% in 2008 to 28.5% in 2009. 

