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## Domestic fixed communications 

Our domestic fixed communications costs and expenses decreased by 0.9% from NT$67.6 billion in 2009 to NT$67.0 billion (US$2.3 billion) in 2010, primarily due to a NT$2.1 billion (US$69.9 million) decrease in depreciation and amortization expenses reflecting a slowdown in capital expenditures, partially offset by a NT$0.9 billion (US$30.5 million) increase in corporate solution services and ICT costs and a NT$0.8 billion (US$29.5 million) increase in bonus. 

## Mobile communications 

Our mobile communications operating costs and expenses increased by 6.6% from NT$58.3 billion in 2009 to NT$62.1 billion (US$2.1 billion) in 2010. This increase was primarily due to an increase of NT$2.4 billion (US$ 81.9 million) in cost of handsets sold, and an NT$1.0 billion (US$33.6 million) increase in leased line and internet access expenses. 

## Internet 

Our internet operating costs and expenses increased by 4.5% from NT$15.1 billion in 2009 to NT$15.8 billion (US$0.5 billion) in 2010. This increase was primarily due to a NT$0.4 billion (US$14.4 million) increase in leased line expenses. 

## International fixed communications 

Our international fixed communications costs and expenses increased by 1.9% from NT$14.2 billion in 2009 to NT$14.5 billion (US$0.5 billion) in 2010. The increase was primarily due to an increase of NT$0.1 billion (US$4.1 million) in equipment rental expense and an increase of NT$0.1 billion (US$3.4 million) in corporate solution services and ICT costs. 

## Others 

The costs and expenses from our other business increased by 31.7% from NT$4.6 billion in 2009 to NT$6.1 billion (US$0.2 billion) in 2010. 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 increased by 1.7% from NT$56.4 billion in 2009 to NT$57.4 billion (US$2.0 billion) in 2010. Our operating margin decreased from 28.5% in 2009 to 28.3% in 2010. 

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

<img src='content_image/225770.jpg'>

