Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company's second quarter 2021 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, the instructions for submitting your questions will be given in the question and answer session. For your 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 second quarter 2021 results 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 for the 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 second quarter 2021 earnings call. In the second quarter of 2021, 5G and the stay-at-home opportunities under COVID-19 Level 3 Alert continued to enhance our overall business performance. In our mobile business, we are pleased to report that our cumulative number of 5G sign-ups exceeds 1 million by the end of the quarter, which is ahead of schedule, and expect to meet our guidance of 2 million sign-ups by the end of this year. We expect to maintain the growth trend as we roll out a variety of mid to low-end 5G handsets, continue to develop 5G innovative applications, and introduce our 5G enterprise network in the vertical tiers.
As expected, our postpaid ARPU turned positive on a year-over-year basis in the second quarter, mainly due to the continued growth of postpaid mobile subscribers and the 5G contributions, and as customers who renewed contracts to adopt 5G services contributed an average of 21% uplift through their monthly fees. Moreover, to provide quality 5G services, we have accelerated our 5G deployment and have more than 8,000 base stations at this time. We expect to approach 12,000 base stations by the end of this year. According to the first-ever Taiwan 5G Speed Test Award report in July, we received distinctions of fastest 5G and best mobile coverage in the first quarter and the second quarter this year. We are endeavored to maintain our leading status in Taiwan's mobile market. Next, COVID-19 also drove up demand for fixed broadband service in the second quarter.
Our HiNet subscriber net adds turned positive on a year-over-year basis in the second quarter as a result of increased demand for work-from-home and online learning capabilities. Broadband ARPU continued its uplift as subscriber migration to our broadband of 300 Mbps or higher continued to increase by approximately 52% year-over-year. The number of home Wi-Fi devices increased by 660% year-over-year to support the popularity of our home-centric applications. The number of MOD subscribers also increased quarter-over-quarter as we continue to introduce cutting-edge technologies to enhance viewing experience. In July, we broadcasted the Tokyo Olympic Games with 4K quality on our MOD platform, and we exclusively delivered the first-ever VR simulation on home video.
Our VR plus 5G bundled services enable users to further engage in viewing contents using VR headsets, and we have demonstrated the performance of our 5G technology for multi-angle broadcasting during the events. We expect our video services to continue to grow in the digital convergence. Allow me to walk you through each of our business lines. Turning to slide five, you can see an update of our mobile business. In the second quarter, we continued to maintain our leading position in the mobile market with 38.8% of the revenue market share and 36% of the subscriber market share, excluding IoT SIMs. During the quarter, our mobile customer net adds and the postpaid net adds are both highest among the big three majors. Our churn rate remained the lowest among peers.
The increase of our mobile service revenue turned positive year-over-year, with contributions with increasing postpaid revenue and the value-added application revenue. We expect the relatively regional competition to continue, which we believe can further enhance our overall mobile performance. Please turn to slide six for an update on our broadband business in the second quarter. We were pleased that our broadband ARPU increased by 3% year-over-year, which reflects our success in migrating subscribers to adopt higher-speed services and other benefits stemming from stay-at-home opportunities in the new normal. The number of subscribers that sign up for connection speeds of 300 Mbps or higher increased by 52% year-over-year, while VPN service revenue contributions from enterprise customers grew as well. In addition, we were encouraged to see that our fiber subscriber net adds has begun to turn positive after years of decrease.
In response to customers' demand for innovative applications requiring higher -speed connection, we expect to roll out 2 Gbps service in the 3rd quarter. Coupled with the ongoing demand for digital transformation, we observe under the new normal, we are confident that we will maintain the overall upward trend in our broadband business. In the second quarter of 2021 slide seven illustrates our mobile business performance. In the second quarter of 2021, subscriber numbers for both MOD IPTV platform and Hami Video increased quarter-over-quarter as a result of growing demand for video service under COVID-19 alert. We successfully continued to maintain our leading status as the largest video platform in Taiwan.
In addition, during the first week of broadcasting at the Tokyo Olympic Games, the viewership and the expected advertisement revenue in Taiwan has hit a record, exceeding that of 2018 FIFA World Cup, which is encouraging. MOD ARPU achieved 2% increase year-over-year as well, mainly due to the successful upsell in both VOD and the channel services. Our SVODs ALL PASS package sign-up number almost doubled quarter-over-quarter, and 89% of our tiered price channel subscribers chose the highest priced package. Moving forward, we will continue to enhance video content and bundle our video services, including MOD and the Hami Video, with fixed broadband and the 5G service to drive up home-centric business performance and create a revenue stream. Please turn to slide eight for an update on our ICT business.
Overall ICT project revenue in the second quarter increased by 10% year-over-year, mainly because of the recognition of revenue from public sector and the smart solar. In terms of emerging ICT services, IDC revenue and the cloud revenues continued to grow by 11% and 27% year-over-year respectively. Cybersecurity revenue decreased by 7% year-over-year due to some project revenue delays. However, we expect to catch up during the second half of this year. Going forward, we will continue to enhance our overall ICT technology capabilities to cater to more emerging digital opportunities and be more selective to further increase project margin. Now, I would like to turn the call over to our CFO, Vincent Chen, who will review our financial results. Dr. Chen, please go ahead.
Thank you, President Kuo. Good afternoon, everyone. I will now review our second quarter financial results. Please turn to slide 10, which provides highlights from our income statement. For the second quarter of 2021, on a year-over-year basis, total revenues increased by 3.8%, and operating costs and expenses increased by 3.2%. Income for operations increased by 5.9%, and our net income increased by 4.1%. In addition, our EBITDA margin increased to 41.9% from 40.5% in the same period of 2020. Slide 11 provides a breakdown of revenue by business segment. In the second quarter of 2021, total revenue increased by 3.8% year-over-year, mainly due to the increase in handset sales revenue, mobile service revenue, and fixed broadband revenue, which offset the decrease in the voice revenue as a result of VoIP substitution. Moving on to slide 12.
Our operating costs and expenses in the second quarter increased by TWD 1.18 billion or 3.2% year-over-year, mainly due to the increase of depreciation and amortization expenses, cost of goods sold, and marketing expenses. Slide 13 shows that cash flows from operating activities for the second quarter of 2021 increased by TWD 4.75 billion or 36.1% compared to the prior year period. This was mainly attributable to an increase in the collection of accounts receivable and an increase of accounts payable. As of June 30th, 2021, the balance of cash and cash equivalents was TWD 32.14 billion, an increase of TWD 12.99 billion or 67.8% relative to June 30th, 2020. The increase was primarily due to the issuance of corporate bonds and an increase of cash flows from operating activities. On page 14, you may find a table that compares our financial results with forecasts.
As you can see, for Q2 2021, our revenue almost met our second quarter guidance and the performance measures including income for operations, net income, EPS, EBITDA, and EBITDA margin all exceeded our expectations. 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 cable. In the second quarter of 2021, our 5G capital spending was on track and in line with our schedule of 5G base station deployment. Therefore, we maintain our forecast that 2021 is our 5G investment peak. I would like to turn the call over to President Kuo to introduce our awards and recognitions.
Thank you, Vincent. Lastly, slide 16 illustrates our awards and the recognitions from the second quarter, highlighting our distinction in 5G speed, mobile coverage, corporate governance, sustainability, and social responsibility. Going forward, we will continue to leverage our infrastructure advantage to provide integrated services with our quality network to meet customer demand. Now, we are 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. As a reminder, press zer one on your keypad if you would like to ask the question.
Ladies and gentlemen, we are now in question and answer section. If you would like to ask the question, please press zero one on your keypad. Thank you. Ladies and gentlemen, we are now beginning our question and answer session. If you have a question for any of the speakers, please press zer one on your telephone keypad and you enter the queue. After you are announced, please ask your question. When you are speaking, please speak 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. The first question is coming from Sailila from HSBC. Go ahead, please.
Hi, this is Sailila from HSBC. I would like to ask about the target of base station, 5G base station. Earlier it was mentioned that the target would be at 10,000 by the end of the year. Now you have increased the target, is it?
Yeah. Thank you for asking. The original five-year construction will be completed within three years. It is expected that about 12,005 base stations will be completed by the end of this year. Now we have more than 8,000 base stations. Thank you.
Okay. Thank you.
Thank you. The next question is coming from Lisa Chen from Yuanta. Go ahead, please.
Yeah. Sorry, I think I need to go back to the HSBC's question about the original targets for the 5G base station for this year. I think our original target, I think it was not really clear about the question. I want to clarify the question. I think the question is about the original target for our 5G base station number this year, right? I think that the original number was 10,000, and now we are thinking about it. We will approach more 12,000 by end of this year. Thank you.
Thank you. Now we are having Lisa Chen from Yuanta. Go ahead, please.
Thanks for taking my question. I'll just have one question. Could you give us more color for the third quarter or fourth quarter of this year's outlook?
Okay. Thank you for your question. For the second half of the year, because despite the outbreak of pandemic, but we still see very exciting results from our mobile services revenues, also the broadband revenues. Although we will expect some turbulence ahead in the second half, but we are confident that our revenue generation, the stream will, on the track, and we'll keep the momentum going, and we are confident that we can meet our forecast for the second half. Yeah. Also for the full year. Yeah.
Thank you.
Thank you. The next question is coming from Sara Wang from Morgan Stanley. Go ahead, please.
Thank you. I have three questions. First question is that, is there any change in our full year, say, revenue profit guidance? The second question is that regarding the 5G base station target number. We previously target 10,000, now it's 12,000, but the total CapEx budget remain unchanged. May I ask if there's a change in the CapEx structure or the price per base station is lower than expected? My third question is on ICT. Management, would you please provide some outlook on ICT, say, in terms of revenue growth or as percentage of the revenue contribution for, say, next year or next one or two years?
Thank you.
Thank you, Sara, for asking. For the first question regarding the full-year revenue topic guidance, we still maintain our focus at this point. Although our performance is better than expected, because of the uncertainty of the pandemic, we still want to stay in a more conservative manner in making our forecast. We will provide updates if we make any changes. For your second question on the 5G base station and also our CapEx budget. Although we increased our target of the number of base stations from 10,000- 12,000, we don't revise our CapEx for 5G. This is because for the 5G, for the equipment, as time goes by, the cost will be lower. Also we deploy our 5G network in a more precise manner. We use big data.
That will save us some money and some capital expenditures. Thank you.
For the third question about our IPTV/MOD services, I think there is a recent Tokyo Olympic Games. I think we are performing pretty good. Our growth, the second quarter MOD services revenue, I think it's also pretty ICT. Okay, I'm sorry. I talked about ICT business, okay. I think the outlook for ICT, I think there is, of course, we mentioned about the percentage of ICT contribution. For this year, we already mentioned earlier, I think in the early quarter, we mentioned about this year, the percentage of revenue compared to last year is a little bit lower. For next year or for the year after next year, we believe it will continue to increase, for sure. Yeah. Last year, because we had some big public government projects.
The revenue size is a bit large, but for the next coming years, we think the ICT side, the business will continue to grow. The percentage accounted for our consolidated revenue should increase. I think this should be out of question. The percentage for this year, already accounted for double digits for sure. Yeah.
Sorry, just to clarify, the double digit is for the growth rate, right?
For the growth rate, not really. Let me check. For the growth rate, we are already double digits for the second quarter. Yes. For the second quarter. For the whole year, also double digits. Yes.
I see.
But.
Specific percentage.
Let me say that I think for this year, I think in the original, this year, we mentioned about this year, because our budget, ICT total project revenue we mentioned in our guidance. Already mentioned about the project revenue was relatively lower compared with the, lower.
Yeah. Compared with that of last year, because last year we had government projects. This year, the total consolidated revenue for the ICT revenue should be around, we're talking about the gross number should be really in the double digits for sure. I'm not talking about gross number. I think the accounted for 12% for the total consolidated revenue. The gross number, the small gross number, ICT revenue number should be lower than that of last year. If you exclude the large project happened last year, the number should be gross. Okay? I think that we already explained earlier this year. Hope this explains your question.
Yeah, got it. Thank you.
Thank you. Now, ladies and gentlemen, we are now in our question and answer session. If you would like to ask a question, please press zero one. Thank you.
Thank you. The next question is coming from Neale Anderson from HSBC. Go ahead, please.
Hi there. Good afternoon. Just a question on the mobile revenue outlet, please. Presumably you saw some benefit year-on-year from roaming being weaker also last year in the second quarter. From here on, how do you see the outlook for 5G revenue, and the overall mobile revenue? Do you think that will continue to improve? Do you think it will accelerate or stay fairly steady? Thank you.
Thank you for your asking. The 5G revenue, we anticipate that the growth momentum will continue. Thank you.
On a percentage basis, could you give any indication of where you think that might reach? It's currently 3% year-on-year growth. Is it possible to give any indication of where you think that will be by the end of this year?
To answer your question, this information is proprietary, and we don't want to introduce any irrational competition if we disclose such information. Thank you.
Actually, understood. Thank you.
Thank you. Currently, we don't have further questions. I will turn it back over to President Kuo. Go ahead, please.
Thank you for your participation. Goodbye, everyone.
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.