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## Mobile communications 

Our mobile communications operating costs and expenses increased by 16.4% from NT$62.1 billion in 2010 to NT$72.3 billion (US$2.4 billion) in 2011. This increase was primarily due to an increase of NT$7.9 billion (US$262.6 million) in cost of handsets sold and an increase of NT$1.6 billion (US$53.5 million) in leased line and internet access expenses. 

## Internet 

Our internet operating costs and expenses increased by 9.1% from NT$15.8 billion in 2010 to NT$17.2 billion (US$0.6 billion) in 2011. This increase was primarily due to an increase of NT$0.8 billion (US$27.4 million) in leased line expenses for broadband services and an increase of NT$0.4 billion (US$12.9 million) in corporate solution services and ICT costs. 

## International fixed communications 

Our international fixed communications costs and expenses increased by 9.2% from NT$14.5 billion in 2010 to NT$15.8 billion (US$0.5 billion) in 2011. The increase was primarily due to an increase of NT$0.9 billion (US$28.4 million) in international interconnection expenses. 

## Others 

The costs and expenses from our other business increased by 32.0 % from NT$6.1 billion in 2010 to NT$8.0 billion (US$0.3 billion) in 2011. The increase was primarily due to an increase of NT$1.4 billion (US$46.5 million) in construction costs and an increase of NT$0.5 billion (US$16.5 million) in research and development expense. 

## Income from operations and Operating Margin 

As a result of the foregoing, our income from operations decreased by 4.0% from NT$57.4 billion in 2010 to NT$55.1 billion (US$1.8 billion) in 2011. Our operating margin decreased from 28.3% in 2010 to 25.3% in 2011. 

The following table sets forth certain information regarding our operating income by business segment for the periods indicated. 

<img src='content_image/204812.jpg'>

