Good afternoon, everyone. Welcome to today's conference call, and our chairperson today is Mr. Jamie Lin. Mr. Lin, please begin the call, and I'll be standing by for the Q&A session.
Thank you, operator. Hey, good afternoon, everyone. Welcome to Taiwan Mobile's third quarter 2022 earnings conference call. Before I start our presentation, let's go over our disclaimer as always. The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new information, further events, or otherwise. Taiwan Mobile Company Limited, or hereafter the company, undertakes no obligation to update or revise the information contained in this presentation. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Nor is the information intended to be a complete statement of the company, markets or developments referred to in this presentation. All right, now that's out of the way, let me start with business overview.
Please turn to page four for highlights of the quarter. In the third quarter, we continued to see solid momentum across our three main growth engines, namely 5G, e-commerce and home broadband. Our mobile service revenue grew year-over-year for the sixth consecutive quarter, reaching 2.5%. That was driven by the year-over-year increase in smartphone post-paid ARPU amid the new iPhone launch and continued 5G conversion. E-commerce, on the other hand, revenue rose by 14% year-over-year, outperforming our peers. Finally, broadband revenue recorded a 9% year-over-year lift thanks to steady demand for faster home connectivity. As a result, consolidated revenue went up by 8% year-over-year in the third quarter.
This offsets the impact from higher subscriber acquisition costs due to the earlier launch of the new iPhone versus last year, and led to a flat consolidated EBITDA for the quarter. For the first three quarters of 2022, consolidated EBITDA grew by 3% YoY versus our full year guidance of 1%-3%. Next, let's turn to page five for a closer look at our mobile business. In the third quarter, our post-paid subscriber net adds hit 51,000, while 5G penetration in our smartphone post-paid user base reached 25%. Monthly ARPU lift from the renewals remained steady at about 25%. Our unique bundles now account for about 15% of our smartphone post-paid subscriber base and remain instrumental to ARPU improvement.
The momobile bundle or mo幣多 in Mandarin continue to gain momentum, and its users contribution to Momo's e-commerce revenue grew further to 6.7% in September, up from 4.9% a quarter ago, adding resilience to Momo's top line. Our Double Play bundle or Hao Shu Cheng Shuang in Mandarin continue to add subscribers, especially in the 999 or above rate plan section, providing healthy tailwind to ARPU. Disney+ subs surged QoQ in the third quarter, boding well for customer stickiness. In September, we launched a sub-brand in consumer segment called OP Life or OP Xiang Le Sheng Huo in Mandarin. Along with its first product line, OP Home Cinematic Suite or OP Yin Ying Ju Yuan Chu in Mandarin.
It is a one-stop shop that allows customers to effortlessly enjoy state-of-the-art home theater experiences through seamlessly integrated bundles of TVs, routers, speakers and set-top boxes. Along with Taiwan Mobile's unique services such as MyVideo, GeForce NOW and Disney+ at a fraction of their total listed prices. We are very pleased to share that the initiative gained solid initial traction among premium users as 60% of its sign-ups were TWD 1,399 or higher rate plan, much greater than the average ratio. On the other hand, thanks to our wide variety of unique and appealing rate plans and add-on services, as well as our strategy to focus on 48 months contracts since 5G launch, post-paid monthly churn rate stayed at a low level of 0.85% in the third quarter.
Separately, our game publishing business had another strong quarter, with its revenue rising 64% year-over-year. Roaming business also recovered nicely, albeit off a low base. On the enterprise side, data and access, cloud and IoT services all delivered healthy growth in the quarter. Now let's turn to page six for updates on our e-commerce business. As the pandemic eases in Taiwan, the retail industry is observing a short-term YoY demand spike for the brick-and-mortar stores. Despite this, Momo once again outperformed its e-commerce peers and delivered a 14% revenue increase in the third quarter, implying further market share gain. As for profitability, Momo's EBITDA fell YoY this quarter. In addition to higher marketing expenses, Momo is also fine-tuning its logistics efficiency.
That said, Momo's pricing power remains strong, with the B2C take rate standing at 13.15% in 3Q 2022, which is 38 basis points higher than the FY 2021 average of 12.77%. Although there are short-term headwinds, we believe Momo's secular growth story is still very much intact. Given the relatively low e-commerce penetration in Taiwan, our continuous investments in logistics should ensure that our leadership position will be further solidified, and the popularity of Momo cart and momobile bundles will only lend to Momo's moat. In the third quarter, about 25% of Momo's deliveries were done by its own in-house fleet. Moreover, the southern and central distribution centers are expected to come online in the next few years.
These investments will help expand the coverage area of our rapid delivery services and pave the way for mid to long-term growth. Now let's take a look at our broadband business on the next page. In the third quarter, we continue to outperform our MSO peers in the YoY trends of basic TV subscriptions and broadband service penetration. Steady demand for faster home broadband, as well as the success of our Double Play bundles, led to sequential increases in broadband subs and ARPU. The ratio of broadband subscribers, including Double Play package takers, who signed up for speeds of 500 Mbps or higher, rose by 38% YoY. As a result, broadband revenue grew by 9% year over year in the quarter. Now let me pass the virtual mic over to our new CFO, George Chang, for financial overview.
Well, thank you, Jamie. Hi, everyone. Good afternoon. Let's start with the performance by business. In the third quarter of 2022, consolidated revenue rose by 8% YoY as our three growth engines all delivered positive growth. Mobile service revenue grew YoY for six quarters in a row, thanks to ARPU improvement amid continuous 5G conversion and benign 4G pricing. In fact, our smartphone post-pay ARPU has seen 16 consecutive months, that's 16% YoY increase. In terms of profitability, telecom EBITDA came in flat YoY in the third quarter, mainly due to higher subsidies associated with an early release of new iPhone versus last year. Momo's profit performance in the third quarter reflect the efforts to reach the optimal level of logistics efficiency along with the increasing marketing expenses. Cable TV EBITDA remained resilient as broadband momentum offset pay TV weakness. Let's go to results summary.
With the healthy momentum from mobile e-commerce and home broadband, consolidated revenue rose by 8% YoY in the third quarter. This offset the aforementioned subsidy for the early iPhone release and resulting in a flat consolidated EBITDA YoY. The YoY change in non-operating expenses was mainly driven by gains from Momo's overseas investment disposal and FX revaluation. For the first three quarters of the year, consolidated EBITDA increased by 3.45% YoY. That's compared to our full year guidance of 1%-3% growth, thanks to well-managed subscriber acquisition costs and income from 5G government subsidies in addition to revenue growth. Excluding the one-time tax credit we received in the first quarter of 2021, year-to-date net profit or net income would have increased by 5% YoY. Let's look at the balance sheet.
On the asset side, receivables grew YoY in the third quarter owing to Momo's business expansion, together with higher monthly fee from our unique bundles and further 5G conversion. Long-term investment climbed YoY on the back of ventures into cloud services, food delivery platforms, et cetera. Written-off used assets rose YoY along with Momo's warehouse expansion. Non-current contract assets jumped QoQ and YoY due to more 48 months or longer handset bundle contracts. Our strategy of increasing the proportion of longer contracts should cushion the impact from potential pricing change down the road. As for liabilities, payables saw a YoY uptick driven by Momo's business growth, as well as sales from the new iPhones and Google phones.
Gross debt went up QoQ on account of bank borrowing to fund our dividend payment in the quarter. The YoY rise in other non-current liabilities reflect the cash we receive from 5G government subsidies. Benefiting from the decent free cash flow generation, our net debt to EBITDA declined YoY to 1.77 x in the third quarter. Lastly, let's look at the cash flow. 5G government subsidies were classified under operating cash flow in 3Q 2021, but were moved under investing cash flow from 4Q 2021 onwards. Therefore, 3Q 2022 operating cash flow would have increased by 15% on a like-to-like basis thanks to telecom business strength. Cash CapEx shrank as 5G investment had peaked, resulting in lower investing cash outflow.
On the financing front, cash outflow grew YoY due to Momo's higher cash dividends and lower cash inflow from borrowings, again, given declining CapEx. Year-to-date cash CapEx fell by 16% YoY and only reached 51% of our full year guidance. This is in line with our expectations as payments for our network consolidation with Taiwan Star and part of Momo's new distribution centers will not be made this year. Free cash flow calculated on the pre IFRS 16 basis was stable at TWD 10.35 billion for the first three quarters of the year, translating into an annualized free cash flow yield of 5.1%. With that, let me turn the presentation back to Jamie for event update and key message.
Thank you, George. On page 14, you can see there's a summary of the awards and recognitions that we received during the quarter for your reference. Lastly, to wrap up the presentation, here's a key message we would like for you to take away with. Seeing dependable increase in 5G penetration, solid traction of our unique bundles and growing group synergies. We will keep our full year EBITDA growth guidance unchanged. Looking ahead, we will maintain a disciplined approach while we broaden our high-value customer base and maintain our growth momentum. All right. With that, I would like to open the floor for questions.
Thank you. Ladies and gentlemen, the question and answer session will now begin. If anyone wishes to ask a question, please press star one on the telephone keypad. Our first question comes from Neale Anderson with HSBC. Neale , please go ahead.
Thank you. Good afternoon. I have two questions, please. The first relates to the operating cost increase in the quarter. You said that was mostly due to the change in the iPhone timing release. I'd like to know if you're seeing any other inflationary cost pressures around maybe labor or utility costs or whether, you know, this increase is really, you know, the majority of it relates to the change in timing of the iPhone. The second question relates to the pending merger approval and the spectrum discussion. Could you give us the latest update? I appreciate you may not be able to comment in full, but at least the timing of, you know, what you expect in terms of next steps would be very helpful and your views if you can. Thank you.
Thank you, Neale . I think I'll take your second question first, and then we'll hand it over for George to take your first question. In terms of the pending Taiwan Star merger, it is still pending regulators' approval, namely NCC and FTC. NCC chair did say publicly that he hope he can have a decision for us within three months. We're optimistic about things moving a little bit faster from this point on. In terms of your first question, George, can you talk about it?
Sure, Neale . To answer your question, year to date, we haven't seen that much of an inflation impact. In terms of, you mentioned about utility and labor, please bear in mind that, the major cost items for our business are network costs and subscriber acquisition costs. Those two have probably, less to do with inflation. On the handset subsidies and channel commission, for example, these are more, I mean, I will probably say on the fixed basis. Other items such as manpower, electricity, they are not that significant. Again, year to date, we haven't seen that much of an impact to our business.
Brilliant. Thank you very much. Jamie, if I could just come back to you on the query regarding the merger. The guidance from the regulator is that they will consider that the merger proposal at the same time as the spectrum consideration. Is that right? There'll be a decision on both. You know, possible having to divest some of the spectrum that would be announced at the same time. Is that your understanding?
Well, they will make a decision in terms of number one, if they green light our merger or not. Then number two, what are the sort of associated responsibilities that there are additional responsibilities they'll give us, if they were to green light our merger. The handling of spectrum will be one of the sort of additional items that they will give to us. Upon which, of course, we can still decide if the deal is fair or not.
Got it. Okay. Thanks very much.
Thank you. Just a reminder, if anyone wish to ask question, please press star one on the telephone keypad. Our next question is come from Sara Wang with UBS. Sara, please go ahead.
Hi. Thank you for the opportunity to ask a question. I have two questions. First question is regarding third quarter, say service revenue or EBITDA growth. It seems to be lower than the other two peers. May I ask if there's any specific reason? My second question is that, regarding the approval from NCC or FTC, do you think there's any like is hurdle to get approval from them besides say the waiver rules of spectrum or keeping lower end pricing plans? Do you see any risk of potential further delay of the like three-month timeline mentioned by NCC? Thank you.
Thanks, Sara. In terms of third quarter service revenue growth, I'm not sure how it's calculated for the other players. I'm not sure if we're comparing apples to apples. In terms of EBITDA, based on the number we're getting from our handset partners, we're selling much more handset bundles than our peers this quarter, resulting in a sort of short-term headwind for our EBITDA. For a particular peer, we know that they're booking their government subsidies for 5G base station construction and also their collaboration with another telco into an item that adds to the EBITDA.
Because the government is essentially giving out 5G base station subsidies in correlation to your 3.5 GHz spectrum bidding cost. We're getting a good bit less of that from the government. On top of that, we're also not engaged in a spectrum and network share relationship with the peer. We don't have those two items that would add to our EBITDA. Even though I think those two items should be subtraction items. Should be subtraction items to your D&A, but they're booking them as addition items for the EBITDA. Just to provide a bit more color on that.
In terms of additional hurdles to get approval, I think the regulators would also be sort of cautious in terms of how we plan to take care of Taiwan Star employees, which, like we communicated before, we're gonna keep 97% of their employees and all of the managers down to staff members. We don't foresee that's gonna become a big issue for the regulators. In terms of things that the regulators look at, besides spectrum and more cost-effective, more economic rate plans, they'll also look at how you take care of the employees.
George, you have anything to add?
Yeah. Regarding Sara's first question, looking at the monthly data from one of our competitors, I think our mobile service revenue growth was actually quite similar. But in terms of EBITDA, yes, I admit that on a consolidated basis, our EBITDA was a little bit impacted by Momo's business this quarter. I think we mentioned that upfront, that for third quarter, Momo's EBITDA actually declined a little bit on a year-over-year basis due to higher costs on logistics side.
Got it. Very clear. Thank you.
Thank you. Once again, if anyone wishes to ask a question, please press star one on the telephone keypad.
By the way, for all investors on the phone or online, starting from this quarter, we also take questions online, so feel free to write to us on chat box. Operator, maybe we give that a couple more minutes.
Sure, no problem. Maybe, just remind again, if anyone wish to ask the question, please press star one on the telephone keypad. Just remind again, if you wish to ask the question, please press star one on the telephone keypad.
There is actually a question online. The question is, what are the key hurdles for NCC's decision of the proposed merger? Jamie, I don't know if you wanna just reiterate that a little bit.
Sure. Similar to Sara's second question. I think the key hurdles are number one, spectrum. Number two, taking care of the more underprivileged T Star existing customers. Then number three, taking care of their existing employees. I think we, the Taiwan Mobile team, did a great job during the public hearing, addressing all of those issues, and I think NCC is considering our proposals. At this point, I don't think these are the key issues NCC look at. I don't assess them being huge hurdles to this deal.
For our overseas friends, maybe you have already seen the press that NCC officials have publicly said that they will speed up on the decision process within the next few months.
Yes. Our NCC chair did communicate publicly that he promised the lawmakers that he will lead the commission to a decision within three months.
Jamie, there's also another question online. It says, our 5G penetration is already 25%. How do we plan to uplift the other 75% for remaining 4G customers?
That's a good answer. Right now, I think the sort of number one application is still phone. Whenever people buy the 5G phone, the majority of them would sign up for a 5G service. I think right now, the bread and butter for us is still working with the phone companies to bring appealing 5G phones to the marketplace so that it would entice users to sign up. On top of that, we also have other different products that we continue to market to customers to entice them to upgrade to 5G.
Our momobile bundles, our Double Play bundles, our Disney+ bundles, and then our newest product line, our OP Home Cinematic Suite. We'll continue to come to the market with creative bundles for the remaining customer base that are not highly interested in swapping to a 5G phone, but they're interested in other 5G offerings. I hope that answers your question.
If I may add on that, Jamie at the beginning mentioned that these, the so-called unique bundles, already account for 15%, one five, our customer base. That's not 15% of our bundles. That's actually 15% of our customer base. If you look at on a bundle basis, that ratio would be even higher. I think the good thing about these unique bundles, few things. One, that definitely help us to differentiate from versus other competitors. And two, usually create some group synergies such as momobile. And also, don't forget that because these bundles are usually unique and we are proprietary, so usually that means implies higher profitability as well.
Thank you, George. Operators, we don't have any further questions. Should we call sort of wrap up this installment of our conference call?
Sorry, management. We don't have question at this point of time.
Okay. If that's the case, then thank you guys very much for joining this session, and we wish everybody well, and then we'll see you guys next time.
Thank you.
Thank you.
Thank you for your participation, and this concludes the conference.