Welcome to the Taiwan Mobile'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 question-and-answer session.
Thank you, Operator. Good afternoon, everyone. Welcome to Taiwan Mobile's first quarter 2025 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. In first quarter 2025, mobile and home broadband are two main growth engines delivered solid top-line performances. Mobile service revenue increased by 2% on the back of normalized comparison base, as 1Q 2024 was the first complete quarter after we merged Taiwan Star. In addition to top-line growth, cost savings from faster-than-expected network integration, which we completed in 3Q last year, drove significant synergies in profitability. This was reflected in the 30% YoY increase in our telecom EBIT. As a result, consolidated EBIT grew by 11% YoY, while net income increased by 23% year-on-year.
Now, let's take a closer look at our mobile business on the next page. In 1Q 2025, our smartphone postpaid output increased YoY as we continue to execute our sustainable growth foundation strategies. 5G penetration in our smartphone postpaid user base increased to 42%, which is five points higher than a year ago as we continue to upsell via our unique bundles. For contract renewals, we saw a 6% overall uplift in monthly fees. The conversion from 4G to 5G has been stable, with a 45% uplift in monthly fees. As a result, 5G revenue grew by 12% YoY, lifting its contribution to mobile service revenue to 65% in the quarter. Also, as a result of our focus on unique bundles under our SGF strategies, the monthly churn rate of our postpaid users fell to a record low of 0.6% in the quarter.
Next, let's turn to page six for updates on our home broadband business. Our home broadband business sustained its healthy momentum, delivering 8% YoY revenue growth in 1Q 2025, driven by a 4% increase in both subscribers and ARPU. This performance reflects continued demand for faster connectivity, especially at our competitive rates. For example, for a 1 Gb home broadband product, consumers enjoyed 23%-42% savings with us compared to the market leader. The increasing adoption of our bundled offerings, which cover cable TV, broadband mobile, and OTT services such as MyVideo, Disney+, Max, and YouTube Premium, also provided healthy tailwind. Notably, the number of broadband subscribers on speeds of 300 Mbps or higher, including Double Play bundle users, grew by 34% year-on-year during the quarter. Overall, EBITDA remained stable compared with the prior year as strength of our broadband service business offset softness in the cable TV segment.
Next, let's take a look at our e-commerce business on the next page. A more muted retail environment, along with broader economic uncertainty, weighed on momo's top-line performance in 1Q 2025. Nevertheless, customer engagement remained strong, with active users growing by 7.5% YoY. Its GMV also continued to rise YoY, outperforming the greater online retail industry, fueled by the increased listing under its new third-party business, or 3P, as they call it. momo's take rate was largely flat YoY, while the decline in its EBITDA margin mainly stemmed from more investment in marketing, technology, and new initiatives such as mo-shop+ , the name of its 3P business, and momoAds, its RMN business. Now, let me pass the virtual mic over to our CFO, George Chang, for a financial overview.
Thank you, Jamie. Good afternoon. Let's start with the performance by business. In Q1 2025, telecom stood out with a 4% revenue growth and accounted for 45% of consolidated revenue. As for profitability, telecom EBITDA grew by 5% YoY, and its contribution exceeded 80% for the quarter. Hindered by lower revenue and margins, momo's EBITDA and net profit contribution fell to 11% in the quarter. Let's go to the results summary. Consolidated operating income grew by double digits YoY, as the robust 30% growth in our telecom EBIT helped offset the softer performance at momo, which reflected its increased investment in new business areas. Coupled with lower non-op expenses, net income and EPS rose by 23% YoY. Let's move on to the balance sheet.
The YoY decrease in cash balance was primarily due to momo's allocation of excess cash into money market instruments, which led to an increase in other current assets in the quarter. Long-term investments rose YoY, driven primarily by TWD 4 billion of strategic investment in Systex during the second half last year. The completion of network integration and the subsequent termination of T Star base station leases led to YoY decrease in right-of-use assets. Long-term contract assets increase reflect the growth in mobile bundle plans. Our disciplined capital allocation and healthy free cash flow generation enable us to reduce gross debt quarter- on- quarter and year-over-year. Supported by healthy cash flows, our net debt to EBITDA also declined on a yearly and quarterly basis, while solid profitability sustained our ROE at 15% in Q1 2025. Lastly, let's look at cash flow.
While operating cash flow fell YoY in Q1 2025, cash earnings increased slightly as telecom EBITDA growth more than offset the decline in momo's EBITDA. Investing cash outflow increased YoY, primarily driven by our investment in mobile infrastructure aimed at the need of high-value customers. Financing cash outflow decreased YoY, partially due to lower lease payments following our base station consolidation. While operating cash flow was stable, continued CapEx payments for network consolidation brought our pre-IFRS 16 free cash flow to TWD 4.4 billion in Q1 2025, translating to an annualized free cash flow yield of 5%. Let me turn the presentation back to Jamie for event update and key message.
Thank you, George. On page 14, you can see I'm pleased to share some of our ESG achievements this quarter. Taiwan Mobile was included in the CDP's Climate Change A list for the fifth year. We were also selected for the S&P Global Sustainability Yearbook for the eighth consecutive year, ranking a top 5% of companies worldwide and most frequently recognized Taiwanese telecom operator in this ranking. We also passed the SGS Service Quality Certification, one of the world's most trusted service quality evaluations, for 13 years in a row. Last but not least, we received the Gold Medal Award at the Yourator Employer Brand Awards, making us the only telecom operator and one of just three companies in Taiwan to receive this distinction. Finally, to wrap up our presentation today, here's the key message we would like for you to take away with. Key message.
In the first quarter of 2025, our core Telco and Telco + businesses delivered a seven-year high in telecom EBIT. Looking ahead, our Telco+ Tech strategies remain central to our growth agenda. Our new telco-powered tech businesses are expected to unlock additional growth opportunities and drive near-term business expansion. With that, let's open the floor for questions. If you're participating online, you're more than welcome to send your questions via the chat box. We will begin by addressing the telephone line inquiries before we move on to the web. Operator, please go ahead.
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 your telephone keypad. If anyone wishes to ask a question, please press star one on your telephone touchpad. Excuse me, Mr. Lin. We do not have questions from the audio side at this point of time.
Thank you. We also do not see any questions from the online chat box. If that is the case, I want to thank everyone for dialing in into this edition of our quarterly earnings call, and we look forward to seeing you guys again next quarter.
Thank you. Thank you, Mr. Lin. Thank you, everyone. Thank you for your participation, and this concludes the conference.