approximately 1,740 Gbps as of December 31, 2011. We plan to increase HiNet’s points of presence and backbone bandwidth to approximately 2,290 Gbps by the end of 2012. 

HiNet’s total international connection bandwidth is 315 Gbps as of December 31, 2011. As we expect that internet traffic flows to and from the United States will continue to increase, we plan to expand our bandwidth to the United States. We also plan to increase our links to other countries, including Japan, Korea, Hong Kong, Singapore, Mainland China, Malaysia and Thailand. 

## Leased Line and Data Switching Networks 

We operate leased line networks on both a managed and unmanaged basis. In addition, we operate a number of switched digital networks used principally for the provision of packet-switched, frame relay, asynchronous transfer mode technology and a multi protocol label switching internet protocol VPN. We have completed the construction of a digital cross connect system for provisioning and managing voice-grade data services throughout Taiwan with a total of 50 nodes. As of December 31, 2011, we had 3,168 frame relay ports, 150 X.25 ports, 2,686 asynchronous transfer mode ports and approximately 66,655 multi protocol label switching internet protocol VPN virtual ports. 

Our data networks support a variety of transmission technologies, including X.25 protocol, frame relay and asynchronous transfer mode technology. We have also built up our HiLink VPN that combines internet protocol and asynchronous transfer mode technologies. The advantage of a HiLink VPN based on multi protocol label switching technology is that it can carry different classes of services, such as video, voice and data together to provide services with various qualities of service, high performance transmission and fast forward solution in an enhanced security network. A HiLink VPN can be accessed by an ADSL and can include built-in mechanisms that can deal with overlapping internet protocol addresses. Therefore, the network potentially is less costly and requires less management for business applications. 

## Competition 

We face competition in virtually all aspects of our business. 

## Domestic Fixed Communications 

We are the largest domestic fixed communications service provider in Taiwan, with a market share of approximately 95.3% in terms of customers for local telephone services, approximately 74.1% in terms of traffic for domestic long distance telephone services in 2011, and approximately 79.2% share of the broadband internet access market in terms of customers. Three new providers, namely, Taiwan Fixed Network, New Century Infocomm Tech. Co., Ltd. and Asia Pacific Telecom Co. Ltd., have provided fixed communication services since June 2001. Our domestic long distance services compete with mobile services as people increasingly use mobile handsets. We believe that the fixed line competition in Taiwan will be primarily based on price, quality of service, network coverage and customer services, such as call centers and unified billing. 

We are required by Republic of China regulations to provide number portability and unbundled local loop access. 

Our primary competitors in leased line services and broadband services include: 

● Leased line service providers: Taiwan Fixed Network, New Century Infocomm Tech. Co., Ltd., Asia Pacific Telecom Co. Ltd., East Asia Netcom Taiwan, Reach Global Services Ltd., FLAG Telecom and Taiwan International Gateway Corporation. 

● Broadband internet access providers: kbro Co., Ltd., Taiwan Fixed Network and New Century Infocomm Tech. Co., Ltd., China Network System Co., Ltd.; and 

