Good afternoon, ladies and gentlemen. Welcome to the conference call. Our Chairperson today is Mr. Jamie Lin. Mr. Lin, please begin your call and I'll be standing by for the question and answer session. Thank you.
Thank you, Operator. Good afternoon, everyone. Welcome to Taiwan Mobile's third quarter 2024 results conference call. Before I start our presentation, please do refer to our Safe Harbor notice on this page. Now, let's take a look at our business overview. Please turn to page four for highlights of the quarter. It's been three quarters since our merger with Taiwan Star Telecom took place last December, and I'm proud to share that we have completed the consolidation of all 9,000-plus base stations in September, almost three months ahead of our initial timeline. I'll talk about the benefits of this accelerated completion in more detail as we get to the next slide. But before that, as highlighted here, our mobile business continues to build on strong momentum, with revenue growing at 26% YOY.
While a large part of this growth has been driven by the addition of Taiwan Star users, the organic growth of our existing user base also reached 8% YOY, driven by our Sustainable Growth Foundation strategies. On the other hand, our home broadband business reported a robust 18% YOY revenue growth during the quarter, thanks to upselling of faster speeds and effective cross-selling towards our mobile and pay-TV customers through offerings such as Double Play or HaoSu Cheng Shuang in Mandarin. In 3Q24, consolidated EBITDA went up by 20% YOY, primarily driven by our mobile business. Excluding the Taiwan Star contribution, EBITDA still grew by 4% YOY, thanks to our Telco Plus strategies. On the other hand, consolidated operating income also increased by 20% YOY, reaching an eight-year high on the back of faster than expected network integrations. Now, let's take a look at our merger synergies on page five.
Base station consolidation has led to significant savings in side rentals and related expenses. As you can see here, lease payment excluding momo has declined steadily and already returned to pre-merger level by the end of 3Q24. We did include Taiwan Star's lease payment on a pro forma basis for 4Q23 for comparison purposes. As a result, on the right side of the page, you can see accumulated EBITDA and pre-tax income from Taiwan Star turned around in May and September, respectively. At the beginning of the year, we guided a consolidated EBITDA YOY growth of 11% to 13% for the full year. And we're glad to report that we have delivered a 20% growth in the first three quarters, with accumulated consolidated EBITDA reaching TWD 31.7 billion, a new record for the company.
This is once again driven by merger synergies that we have realized ahead of schedule and our Telco + Tech strategies. Now, let's take a closer look at our mobile business on the next page. In our core Telco business, we have focused on building a sustainable growth foundation through long-term organic ARPU growth and enhanced customer loyalty. Maximizing each 5G conversion, supported by the new iPhone launch along with capturing every roaming opportunity, has been key drivers for our smartphone ARPU momentum. As a result, monthly fees for contract renewals increased by 49% for 4G to 5G upgrades and by 8% overall during the quarter. Sequentially, ARPU and mobile service revenue continued to rise as the team effectively executed our SGF strategies. Revenue momentum from our Telco + T ech businesses, including game publishing, DCB, and A2B, also contributed significantly.
Post-pay monthly churn rate remained low at only 0.8%, reflecting effective promotion of our unique bundles, including Double Play, momoBOT, and OP Life. With 5G penetration in our smartphone post-pay user base currently standing at 39%, there's a long, long way ahead for further ARPU and mobile service revenue upside. Next, let's turn to page seven for updates on our home broadband business. Our home broadband business remained strong, maintained its strong momentum, achieving double-digit YOY revenue growth driven by a 3% increase in subscribers and a 14% ARPU improvement. This growth reflects sustained demand for faster connectivity and the popularity of our bundled offerings, which include cable TV, broadband mobile, and OTT services such as MyVideo, Disney+, HBO Go, YouTube Premium, and Max that was just launched today. Notably, broadband subscribers with speeds of 300 megabits or higher, including Double Play bundle users, rose by 42% YOY this quarter.
The YOY decline in CATV revenue was mainly due to the content reduction following Disney's exit from the cable TV channel market in Taiwan earlier this year. On the other hand, overall EBITDA showed solid growth YOY, supported by the strength of our broadband business. Next, let's take a look at our e-commerce business on page eight. In 3Q24, momo's revenue growth remained subdued given a softer demand environment as consumers shifted their spending towards travel and leisure activities, especially during the summer months. However, active users increased by 10% YOY, the highest growth rate in six quarters, indicating strong customer engagement. A new subscription-based membership program called + launched in September is expected to further enhance engagement and loyalty. Gross margin remained stable in the quarter, supported by operational efficiencies.
While YOY decline in EBITDA margin was primarily due to investment in new businesses and associated marketing expenses, momo is actively scaling its 3P advertising and live commerce businesses. On the logistics side, its southern distribution center is now operational and is well-positioned to support business growth during the 4Q high season. Now, let me pass the virtual mic to our CFO, George Chang, for financial overview.
Good afternoon. And let's start with the performance by business. In the third quarter of 2024, consolidated revenues reached TWD 47.2 billion. With the help of the Taiwan Star merger, telecom business contributed a majority of the YOY consolidated revenue growth. Decent telecom revenue growth was seen even if we strip out the merger impact. As for profitability, consolidated EBITDA exceeded TWD 10 billion for three quarters in a row. The YOY increase of TWD 1.8 billion was mainly driven by telecom, while cable TV also delivered YOY growth. Speaking of net income contribution, only 7% was from momo in this quarter. And let's go to the results summary. Consolidated revenue and EBITDA recorded 9% and 20% YOY growth, respectively, mainly driven by Taiwan Star merger synergies and 5G service adoption. Operating income hit an eight-year high, with growth accelerating to 20% YOY, supported by rental expense savings from a base station consolidation.
Although financing costs increased due to inheriting and refinancing Taiwan Star's debt, non-operating income was boosted by one-off gains from overseas investments. Even excluding this one-time gain in July, EPS was still rose 4% year-to-date, despite the dilution from the new share issuance to Taiwan Star shareholders. Let's move on to balance sheet. Receivables and contract sales rose YOY, driven by the growth in post-pay subscribers, including Taiwan Star users, and monthly fee contributions from our mobile bundle plans. The Q2 decline in cash and cash equivalent was primarily due to momo's dividend payout this quarter. Over the past 12 months, our long-term investment portfolio has grown with notable additions such as Systex, Fubon Green Power, and KKCompany. Right-of-use assets saw another Q2 decline, with the benefit from the mobile network consolidation.
Gross debt increased YOY as we inherited Taiwan Star Telecom's borrowing, while the Q2 rise had to do with our dividend payment and the purchase of Systex shares in 3Q24. During the quarter, we issued a TWD 2 billion straight corporate bond with a five-year tenure and an annual coupon rate of 1.89%. The board also approved TWD 10 billion convertible bond issuance, aimed at refinancing the TWD 14 billion corporate bond maturing in 2025. Net debt to EBITDA rose to two times in 3Q24, owing to the aforementioned investment. Lastly, let's look at the cash flow on the next slide. In 3Q24, cash earnings rose by 29% YOY on the back of solid growth in telecom EBITDA and higher investment gains. The increase in investing cash outflow year-to-date reflected payments associated with network consolidation CapEx and our strategic investment Systex, a leading listed ICT company in Taiwan.
We acquired an 11.86% stake for TWD 4 billion and have begun recognizing investment income under the equity method from mid-September. Year-to-date financing cash outflow increased due to increases in dividend paid by Taiwan Mobile and momo. With higher cash OPEX, 3Q24 free cash flow came in at TWD 3.42 billion. That said, for the first three quarters of the year, free cash flow reached TWD 13.86 billion, representing a 21% YOY increase and translating into an annualized free cash flow yield of 5.3%. Let me turn the presentation back to Jamie for event update and key message.
Thank you, George. Just want to clarify when George was talking about the 3Q24 free cash flow, I think he was meant to refer to higher cash CapEx instead of OPEX.
Yeah, cash CapEx.
All right. On the 15th page, I am pleased to share some of our ESG achievements from this quarter. Taiwan Mobile has joined the Global Enabling Sustainability Initiative, or GeSI, as a corporate member and is actively participating in the digital with purpose movement. In July, our electric vehicle project, MyCharge, received the Smart Cities Award at the DWP Global Summit, showcasing our innovative digital solutions to sustainability challenges. Moreover, we are the first telecom company in Taiwan to publish a Taskforce on Nature-related Financial Disclosures, or TNFD report. We also made the top 10 list for the 17th time in the large enterprise category of the CommonWealth Excellence Award, the best among Taiwan telcos. Last but not least, our IR team has been recognized by IR Magazine as a nominee for best in communication sector in the Greater China region.
Finally, to wrap our presentation today, please turn to page 16. Here's the key message we would like for you to take away with. Key message: Taiwan Mobile has executed effectively and delivered outsized merger synergies ahead of the schedule. Looking ahead, we aim to strengthen our sustainable growth foundation in the core telco business, focusing on long-term organic ARPU lift and churn reduction. Building on this foundation, we are enhancing our Telco + offerings while working with Systex, CloudMile, AppWorks, and other strategic partners to bring smart solutions to large enterprises, SMEs, and government clients to accelerate our enterprise business in the AI era. Finally, by uniting Telco +
If you are participating online, you're welcome to send your questions via the chat box. We will begin by addressing the telephone line questions before we move on to the web. So operators, please go ahead.
Thank you, Mr. Lin. Ladies and gentlemen, we will now move for questions. If you'd like to register for a question, please press star one on your telephone. Thank you. Ladies and gentlemen, that is star one for questions. Thank you. Ladies and gentlemen, if you'd like to register for questions, please press star one on your telephone. Thank you.
So operator, if we don't have any questions from the telephone line, we do have a question on the online chat box we can address first.
Yes, please. Mr. Lin, there's no question from our telephone line at the moment.
Okay. So our question from the online chat box is from Tom Tang of Morgan Stanley. His question is, "Congrats on the results. As we are well ahead of guidance, how should we think about merger synergies from 4Q24 and onwards?" So Tom, thanks for your question. I think the way we can think about synergies from 4Q24 onwards is if you compare the results, YOY was still set to extract a lot of growth in that regard as the next three quarters we will be still comparing with the lower base. And from there, like we said on the key message, from there we will focus on delivering growth through our three strategies. So on the core telco side, we'll continue to build sustainable growth foundation.
So, as you can see from our reporting, we are able to deliver at least high single-digit organic growth through upselling and cross-selling our core telco customer base. On top of that, our Telco+ strategy would allow us to come to the market with smart solutions to be sold to enterprise segment to grow our business from that angle. And finally, we're also going to invest into our Telco + Tech businesses to generate further growth from this businesses, including businesses like momo, DCB, game publishing, and the likes. So, hope that answers your question. So, operator, do we have further questions from the landline?
Not at the moment, Mr. Lin. Once again, ladies and gentlemen, that is star one for questions. Thank you. Just me, Mr. Lin. There are no further questions at this point in time. Thank you. Once again, ladies and gentlemen, that is star one for questions.
All right. If there's no further questions on the landline, we do have another one from the chat box. So this is from Guest. And he or she is asking, "Is the dividend expected to increase next year?" George, you want to talk about it?
It's a little bit early to talk about what dividend we are going to propose to the board for next year. But again, year-to-date, we talk about the YOY increase in EPS as well as in earnings, or even despite the fact that we issue more shares, probably 7%-8% share dilution. So based on that, it's probably fair to assume that we are going to deliver a fairly decent EPS this year. So would that translate to higher DPS? All I can say is it's possible, but we cannot guarantee at the moment. Again, everything is subject to board decision next year.
Thank you, George. But I think we can say that the management will work very hard to.
Propose.
Propose and seek for the most benefits for our shareholders. All right. Operator, do we have questions from the telephone line?
Not at the moment, Mr. Lin. Once again, ladies and gentlemen, that is star one for questions. Once again, ladies and gentlemen, that is star one for questions.
All right. If we don't have further questions, I guess that concludes our quarterly results call. And thanks for dialing in. I wish you a very happy holiday season, and we look forward to seeing you again at our next quarterly call.
Thank you. Thank you, Mr. Lin. Thank you for your participation. This concludes the conference. You may now disconnect. Goodbye.
Bye.