Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company' Q3 2021 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, the directions for submitting your questions will be given in the question- and- answer session. For information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website, www.cht.com.tw/ir under the IR Calendar section. Now I'd like to turn it over to Ms. Angela Tsai, the Director of Investor Relations. Ms. Tsai, please go ahead.
Thank you. This is Angela Tsai, Director of Investor Relations for Chunghwa Telecom. Welcome to our Q3 2021 result conference call. Joining me on the call today are Harrison Kuo, our President, and Vincent Chen, our Chief Financial Officer. During today's call, management will begin by providing an overview of our business from this quarter, followed by a discussion of operational and financial highlights. After, we will move on to the question and answer session. I'd like to please note our safe harbor statements. Now, I will turn the call over to President Kuo. President Kuo, please go ahead.
Thank you, Angela, and hello, everyone. Welcome to our Q3 2021 earnings call. In Q3 of 2021, we are pleased to report robust performance. In the mobile business, 5G subscriber numbers continued to grow during the quarter. With the launch of iPhone 13 series later in Q3 , further drove up both 5G sign-ups and higher price plan adoption. About 90% of iPhone 13 series users choose plans of TWD 999 or above, and approximately 3/4 of the overall 5G users adopted the plans of TWD 999 or above. In addition, customers who renewed contracts to adopt 5G services contributed an average of TWD 29 uptick in monthly fees to sustain the upwardly trending ARPU.
Going forward, we will continue to orderly steer 5G migration by offering diversified price plans to accommodate the different demands and accelerate 5G deployment to provide a 5G network. At this time, we have more than 10,000 5G base stations, and we are remaining confident in our ability to achieve our guidance of building 12,000 5G base stations by the end of this year. In the third quarter, both broadband and MOD businesses demonstrated a promising performance. HiNet subscriber net adds continued to increase on a year-over-year basis due to work-from-home benefits. Broadband revenue increased, and ARPU upticks continued as subscriber migration to our broadband services of 300 Mbps or higher increased by 48% year-over-year.
Olympic Games are broadcasted on a MOD platform and the Hami Video during Q3 , successfully reaching record high viewing rates and bringing in a surge of advertisement revenue despite the relatively small revenue base. Going forward, we will continue our strategy to acquire popular content to retain customers and respond to market competition as we strive to maintain our leading status on the largest video platform in Taiwan. For ICT business, we are delighted to see the average ICT project margin grow year-over-year. As we continue our efforts to enhance ICT margin, we expect the overall business performance will continue to develop on track. Now, allow me to walk you through each of our business lines. Turn to slide five, you may find updates on our mobile business.
In Q3 , we continued to maintain our leading position in the mobile market as revenue market share remained at 38.8% and the subscriber market share increased to 36.1%, excluding IoT SIMs. During the quarter, our mobile customer net adds and the postpaid net adds both ranked highest among the big three majors. As postpaid subscriber number increased year-over-year and the 5G migration enhanced high-price plan adoption, our mobile service revenue continued to increase year-over-year, which also led to the year-over-year increase of our postpaid ARPU. Please turn to slide 6 for an update on our broadband business in the third quarter. Our HiNet subscriber net adds continued to increase year-over-year in Q3 , reflecting the growing fixed broadband demand in the market.
We were also pleased to see that our broadband ARPU increased by 3% year-over-year, which reflects our success in migrating subscribers to adopt higher speed services. The number of subscribers that sign up for connection speeds of 300 megabits per second or higher increased by 48% year-over-year. Our VPN circuits revenue contributions from enterprise customers increased as well. In addition, benefits stemming from stay-at-home opportunities in the new normal continued to grow in Q3 . Our responsive packages that bundle the broadband with Netflix, gaming, and online learning continued to be well-received and brought in revenues. Going forward, we will continue our efforts to maintain the upward trend of broadband revenue and ARPU. Slide 7 illustrates our MOD business performance.
In Q3 of 2021, MOD revenue increased by 5% year-over-year, due to our proper pricing strategy and the success of broadcasting the Tokyo Olympic Games. The SVOD all-pass package that rolled out in the first quarter rapidly accumulated its subscription number and successfully strengthened MOD revenue growth for 2 quarters in a row. Channel revenues continued to increase year-over-year as 90% of subscribers choose the highest priced package among the tier pricing schemes. In addition, advertisement revenue increased as MOD and Hami Video successfully leveraging the highest ever viewing traffic for the Olympic Games into advertisement orders. As a result, the MOD ARPU achieved a 5% increase year-over-year in Q3 .
Moving forward, we will continue to enhance the content offerings by acquiring popular sports events and carrying well-known OTTs, and we aim to maintain our leading position as the largest video platform in Taiwan. Please turn to slide eight for an update on our ICT business. As mentioned earlier, on a year-over-year basis, ICT project margin in the third quarter continued to increase as the ICT gross profit increased as well, which is positive to our overall bottom line. In addition, ICT revenue increased 11% year-over-year, mainly due to the revenue recognition from the projects in financial industry. Cloud revenues remained flat year-over-year, while cybersecurity revenue decreased by 16% year-over-year due to project revenue delays. However, we are delighted to see recurring revenue of cybersecurity increased year-over-year, reflecting the subscription-based cybersecurity service continued to be well-received.
Going forward, we will continue to enhance our overall ICT technology capabilities to cater to more emerging digital opportunities and be more selective as we aim to further increase project profit margin. Now, I would like to turn the call over to our CFO, Vincent Chen, who will review our financial results. Vincent Chen, please go ahead.
Thank you, Harrison Kuo. Good afternoon, everyone. I will now discuss our third quarter financial results. Please turn to slide 10, which provides highlights from our income statement. For Q3 of 2021, on a year-over-year basis, total revenues decreased by 2.5% and operating costs and expenses decreased by 5.5%. Income for operations increased by 6.7%, and our net income increased by 12.8%. In addition, our EBITDA margin increased to 41.4% from 38.5% in the same period of 2020. Slide 11 provides a breakdown of revenue by business segment.
In Q3 of 2021, total revenue decreased by 2.5% year-over-year, mainly due to the decrease in ICT project revenue and the voice revenue as a result of VOIP substitution, which offsets the increase of handset sales revenue, mobile service revenue, and broadband revenue. Moving on to slide 12. Our operating costs and expenses in Q3 decreased by TWD 2.28 billion, 5.5% year-over-year, mainly due to lower ICT project cost and lower concession fees. Slide 13 shows that cash flows from operating activities for Q3 of 2021 increased by TWD 0.85 billion or 4.2% compared to the prior year period. This was mainly due to an increase in pre-tax income.
Free cash flows decreased by 15.6% on a year-over-year basis due to higher capital outlay that will enhance our future revenue streams. As of September 30, 2021, the balance of cash and cash equivalents was TWD 23.59 billion, an increase of TWD 5.89 billion or 33.2% compared to September 30, 2020. The increase was primarily attributable to the issuance of corporate bonds. On page 14, you may find a table that compares our financial results with forecasts. As you can see, in the third quarter of 2021, all performance measures beat our guidance. Revenue met guidance attributed to higher mobile services, broadband access, and data communications revenue. Please turn to slide 15.
For 2021, we budget TWD 43.1 billion in CapEx, including spending on business focuses in 2021, such as accelerating the construction of 5G network, IDC, and submarine cables. As of September 30, 2021, cash outlays of IDC and submarine cable went below our expectations due to the delay of construction, while our 5G CapEx spending was on track and in line with our schedule of 5G base station deployment. We maintain our forecast that 2021 is our 5G investment peak. Now, I would like to turn the call over to Harrison Kuo for our awards and recognitions.
Thank you, Vincent. Finally, slide 15 illustrates our awards and recognitions from the third quarter, highlighting our distinction in telecom operation, mobile data service, and data center service, as well as the recognition of corporate branding and ESG practices. As a trustworthy leading brand in Taiwan, we especially attach important to sustainability, and we will make full efforts to carry out sustainable development of the overall business. Thank you for your attention. Now, I would like to open the floor for questions.
Thank you. We'll now begin our question- and- answer session. If you have a question for any of today's speakers, please press zero one on your telephone keypad, and you will enter a queue. After you are announced, please ask your question. When you are speaking, please be louder or closer to the microphone. If you find that your question has been answered before it is your turn to speak, please press zero two to cancel the question. Ladies and gentlemen, we are now in question and answer session. Please press zero one on your keypad to ask the question. Our first question is coming from Neale Anderson from HSBC. Go ahead, please.
Hi there. Good afternoon. I was wondering if you could give us a little bit more color on competition in the 5G market and how you expect that to play out in the fourth quarter. What are the recent trends in terms of spending, migration, and how you think that market is developing? I'd be interested in your views on both the consumer and the enterprise side. Thanks very much.
Well, I think currently, you know, the overall, you know, 5G competition in Taiwan market is pretty rational.
You see, currently our ARPU, post-paid ARPU, you know, in this market, you know, we present what we present for our third quarter number, no matter, you know, the blended ARPU or the post-paid ARPU. Chunghwa Telecom, I think we are kind of, you know, among our peers, among the major peers, I think we are the best. No matter, you know, like this, you know, I think the overall market, in terms of the pricing, the package, you don't see any extreme package. All the packages, you know, is kind of orderly launched. I would say that, you know, the 5G market is pretty rational.
In the foreseeable future, in the fourth quarter, we would like to see this as well.
Thank you, Fu-Fu. Any evidence of sort of new service demand or 5G specific service demand among business customers?
For the enterprise side, you know, I think we know with the vertical industry. I think we will continue to partner with our enterprise customers, you know, to see what they need and we will explore, you know, any possibility in this regard.
Got it. Thanks very much.
Thank you. As a reminder, press zero one on your keypad if you would like to ask a question. Ladies and gentlemen, we are now in question and answer session. If you would like to ask the question, please press zero one. Thank you. The next question is coming from Ken, Fidelity. Go ahead, please.
I changed my name, okay?
Sure. Yes.
Hello? Okay. Yes, thanks for the opportunity, management. It's just a quick question. Or if you can comment on that. I just, if I'm not mistaken, I have seen a news flow that some of the factions in the Legislative Yuan is now demanding a cheaper 5G type plan just to help the people, right? From economic perspective, because some of the people may be suffering from COVID-19. Is there anything you can comment on this? I mean, in terms of a potential regulatory tariff pressure on 5G services. Thank you.
I think we do have some kind of a cheaper plan all the time, you know. Like, you know, in the digital channel and for some special, you know, group of people all the time, you know. Not really from the regulatory, you know, pressure. Not really. Just answer your question.
Okay. Thank you.
Thank you. Ladies and gentlemen, we are now in question and answer session. If you have a question for any of today's speakers, please press zero one. Thank you. As a reminder, please press zero one on your keypad if you would like to ask a question. If there are no further questions, I will turn it back over to President Kuo. Please proceed. Thank you.
Thank you for your participation. Bye-bye.
Thank you, President Kuo. Thank you for your participation in Chunghwa Telecom's conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw/ir under the IR Calendar section. You may now disconnect. Goodbye.