Welcome everyone to Far EasTone's 2021 second quarter earnings conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at that time if you would like to ask the question. For your information, the webcast replay will be available within an hour after the conference has finished. Please visit www.fareastone.com.tw under the investor relations section. Now I would like to introduce Mr. Gary Lai, the IR Officer. Gary, please begin.
Good afternoon, everyone. Thank you very much to attend Far EasTone second quarter 2021 results conference call. Our President, Chee Ching, and Chief Financial Officer, Sharon Lin, both join the call with us today. Before Chee Ching's brief presentation, please pay attention to our safe harbor statement in the first page of presentation. Let me pass to Chee Ching. Thank you.
Okay. Thank you, Gary. Good afternoon, ladies and gentlemen. I will report to you our first half, and then second quarter in particular, our performance. If you would turn to page three, we start with Taiwan's mobile market status. As you can see on the left-hand side, the chart shows that Taiwan's mobile market penetration has already reached more than 125%. This is a very saturated market. However, the good news is, I think, thanks to 5G, the mobile service revenue, the declining path has finally come to an end. In the second quarter, for the big three, combined mobile service revenue has turned around and then Y-o-Y becomes positive. However, FET has taken the lead, and we turned positive in March. All right.
For our financial performance, for the second quarter, our total revenue reached TWD 19.4 billion or TWD 19.5 billion, it is 1.5% better than our board target. It is actually 4.4% better than a year ago. Also, our EBITDA is TWD 6.9 billion and almost TWD 7 billion, it is 5% over our target and 2% year-over-year growth. For the net income, now remember for the first half last year, we did not have the 5G amortization yet. Of course, we started amortization in August. For the first half, the net income EPS, if we compare Y-o-Y, it would not be very good. However, our achieve rate for our board target is 20% for the second quarter, so it was a very good quarter. Year-over-year, with the different base, it is almost 12% less. Okay.
For the first half, the results, we have reached TWD 40.3 billion for revenue and TWD 13.8 billion for EBITDA, and our net income is TWD 3.8 billion. If you look at achieve rate in terms of our board target, it's 15% better, so is the case with our EPS. Okay. If we look at our debt or free cash flow situation, we are improving our net debt and also the net debt to EBITDA ratio. Our net debt from the first quarter, it was at a TWD 63.8 billion or so level and has come down to TWD 61.5 billion. The net debt ratio also has improved from 2.33 to 2.24. Okay. Our free cash flow has increased from TWD 3.8 billion to TWD 6.6 billion at the end of the second quarter.
For the cash-based CapEx, for the first quarter, we only spend about TWD 2.2 billion, but then in the second quarter, we sped up a little bit, and it's now in TWD 5.3 billion. Our budget for this year is actually at about TWD 14.9 billion. We do have more CapEx expected for the second half, and then so we are in line with our guidance. Okay. Now in terms of FET's mobile service growth, as I pointed out, in March, we already turned positive year-over-year. If you just look at a month-over-month from this chart on the left, you can see in the second quarter, after second quarter, that's when we launched 5G commercially. You can see for the amount of the mobile service revenue, every quarter it has continued to grow. Finally, in March, we have already turned positive.
For the entire second quarter, it is positive by 1.7% year-over-year. This 5G also helped our post-pay and blended ARPU. For FET, our blended ARPU and post-pay ARPU resumed growth in March and May, respectively. The percentage is not a lot, but it is significant in terms of we have had this declining ARPU for so many quarters now, and that has finally been turned around. All right. In terms of our total revenue, that is including both telecom and our new economy. It is also very encouraging for three quarters in a row that our Y-o-Y growth continues. When it comes to the second quarter, we have TWD 19.5 billion of the revenue total. On the right-hand side for the EBITDA, it has rebounded year-over-year.
It's turned positive, and mainly attributed to the margin improvement in our cost optimization. For the revenue, even though 5G is helping with the uplift and all that, but in telecom basically, it's a saturated market, so it doesn't grow as fast. A big part of the revenue growth was driven by better handset sales and also the ICT revenue. That has been our growing engine. Okay. The next is business highlights. Subscribers. Even though this is saturated in terms of a number of postpaid sub-markets, but then we have been increasing the number of postpaid customers for 11 quarters in a row now, and then it is still the case quarter this year, and the Year-over-Year is one. In terms of the churn, the market has been for the 2.3% better. Holders granted, and we also continue to work on our churn.
It continued to hit our record low. It is now at 1%, but then we are continuing to improve it with more data analytics and our customer insights. Okay. In terms of 5G, so far we have already deployed more than 7,500 5G stations out there, and we already covered 90% of the six metropolitan areas. For the nationwide, it's already above 80%. We are targeting to deploy 9,000 by the end of the year if not sooner. Also the coverage for the whole nation or whole island will be more than 90% as well. We are also approaching 900,000 5G subscribers, and we're still targeting to reach one million by the end of August.
For those that sign up for 5G, more than 90% of them sign up for the high rate plan, TWD 999 a month or above. TWD 1,399. More than 20% of a monthly fee uplift is contributed by the 5G renewal. Our 5G, it didn't take us long to reach the world-class 5G performance. We have had our number one for several quarters in a row, recently one of the third party has certified Chunghwa, our peers, to be the number one, we congratulate them, because we have been expecting them to catch up eventually, we are glad they caught up. Now we are really improving together, I think that's good competition, that is good for the consumers.
They know other than Chunghwa being always the number one or incumbent, they do have a choice and alternative. That is Far EasTone to choose from. We are glad we're both in the top two or the top performance, world-class performance together. Okay. All right. For our new economy, just a little bit of history. When we started this journey back in 2016, the new economy accounted for only 5% of our total revenue. Today, for the first half and this year, we actually had 16% as our target. For the first half, we already reached the target. In the first half, the new economy revenue already accounted for 16% of our total revenue. Okay. We are happy to see the growth from many areas of the new economy. On the right-hand side, it gave some examples.
For example, like our ICT business, smart ICT business. Even though because of the pandemic last year, it has a long haul effect. For the first half, in terms of revenue realization, it's only 6% growth, but it still, it's growth. If you look at the contract that we were able to win in the first quarter, and the contract value is almost 50% growth than the year before. Okay? For the media services, those are like the text, the SMS, which is a traditional service, granted, but then because of all the one-time password and then because of the pandemic, a lot of trends online. This becomes very popular way of security confirmation and all that. On top of it, we also have this data analytics that we offer to companies for more mixed service, targeted marketing.
This is also growing and contributing to the media service growth here for the 30% year-over-year. Another thing that is definitely warrants mentioning is our mobile commerce. Although it is very small still, last year we had TWD 2.1 billion of revenue from this small friDay Shopping. Its growth for the first half is very impressive. In May, it has reached 73.6% growth. In June, it's like a 56.6%. For the first half as a whole, that we see 37% of growth. Continue to grow as we have this FET Mobile Circle that we launched. It help will bring more traffic, and also with our personalized recommendation engine, that we will be able to boost friDay Shopping sales as well. Also, we continue to be the number one direct carrier billing business.
It is also showing a growth of 13% year-over-year. Okay. In the ICT area, we do see here the rising demands, especially as a smart ICT demand. A lot of it is really boosted by the government's attention. Government itself is going through digital transformation. We see smart government type of initiatives, and then also the smart health. This is the first application we have been advocating, that is the telemedicine, because we see the real need, and then that 5G is able to fulfill for the society. Especially it benefits those rural areas residents from lack of or insufficient medical resources. This, with the Ministry of Health and Welfare support, this service that we launched for one province, that's Taitung. Well, one county, actually.
One county, Taitung County, is now going to be prevalent to all of the rural areas in Taiwan. This is also an opportunity for us since we are the first to launch this service, and the model and the platform become the standard for the Ministry of Health and Welfare. Also, we have provided this National Health Insurance Card. That is like another form of ID for Taiwan people here. We also provided a mobile version of it as a POC for the Ministry of Health and Welfare. The use of it will support more use of the 5G telemedicine service. It will complete this service because right now we have the 5G telemedicine service, and the patient is at the far end.
For the doctors in the hospital here, you cannot have the physical card to scan or to process the payment. With the mobile card, this will be just resolved. Each piece to the puzzle is being put together. Far EasTone is definitely defining that solution and is delivering that solution. Okay. In the middle column, we talked about various projects that are funded by the government. What I have to mention, Chunghwa being the incumbent, it is very hard for us to compete in the government section or segments. In the past, I have to say my team has been really doing very well. We've worked very hard, and I think we have earned our credibility.
People start seeing that, we actually start getting a lot more, winning a lot more contracts with the government, which is encouraging, and we definitely appreciate that. We welcome more opportunities in this area. This has also helped fuel our growth in the ICT area. Various government agency, they are going through the digital transformation, and we provided not only the IT kind of support from infrastructure to build the data warehouse, data platform, or to provide the data analytics for the government. Also, we have a subsidiary that is focused on cybersecurity. This is combined with our software capability that Far EasTone has. We are into these cloud and cybersecurity applications as well. Recently, there is Air Condition in Every Classroom Initiative. The government has already passed the budget for it.
Among all these counties that have these projects already formulated, we actually won more than half. This is big win for us, and then we are using our homegrown solution, 50% on energy management system. This is software-based solution. This is a good win for us, and then also it will contribute to about TWD 1 billion or so revenue once it's all completed in the second half of the year. Okay. The 5G private network, since we have a really world-class performance 5G. The 5G private network is another area of our focus. One of the verticals that will, in particular, require the private network is in the smart manufacturing area. Our cooperation with one of the biggest, Delta Electronics. That is the first 5G private network smart factory that we deployed or launched early next year.
Last year, I'm sorry. Early last year. Because of the pandemic, certainly, a lot of companies were more tight or more cautious in terms of their capital spending. We do see from this particular example that the good return for this kind of investment to upgrade your factory with 5G private network, the communication network, and with smart, with AI. This productivity increase from the factory is going to well justify the investment. Also, we have other different verticals in the southern areas where they need private networks that we can design for them, as we have very good network solutions and also best performance 5G that we can provide. This is one area we continue to grow, and with the pandemic almost behind us.
Even during the pandemic, we actually were asked for some emergency help and support to upgrade some of the factories with the 5G network. That actually gave us some business opportunities, business deals as well. Okay. All right. It comes to some of the major awards that we received in the second quarter. The first one is from the institutional investor. Some of you probably have voted for Far EasTone, for us, and we appreciate that. Certainly, it's a great honor, and we'll continue to do better. Thank you. We also have some other awards in the ESG area, such as our Carbon Disclosure Project. We are one of the CDP supply engagement leaders that is rated A. Our company is again ranked top 5% corporate governance company. That's seven years in a row. Okay.
We have other innovation-related awards as well, just for your information. Okay. Even during pandemic, we support our community, that just didn't stop. Earlier, I mentioned about our telemedicine service. That was for the rural areas. As always, that is what the government has planned. As the pandemic hit Taiwan in May, we saw what the rest of the globe saw last year. People do not want to go to the hospital. That was quite sudden in May. We worked with Far Eastern Memorial Hospital made this telemedicine available on the mobile as an application. For patients that they don't want to go to the hospital for non-COVID-19 related issues, that they can actually use our platform, this communication platform, to consult with the doctors.
This was deployed, shortly after that, we already have thousands of patients benefit from that. We are working with five other hospitals at the same time to deploy this similar solution. I'm sure this will become more prevalent as people start seeing the benefits of it. It's not just for rural areas, even for urban areas. People don't have to spend that much time in the hospital waiting if we have a better communication system over good 5G network, over good 5G phone, they can be seen by the doctors over this mobile communication. Okay. As Taiwan government has finally approved to have more testing vehicles or stations to be set up for vaccination or testing, there was a great need.
We were setting up these 5G boosters just to make sure that their communication needs can be better served. Also, because of the pandemic, a lot of people started working from home. The network traffic definitely changed, and a lot of people can now work from home, and they stayed home. For students, they will have to do this online learning. All that contribute to the 30% year-over-year growth in terms of our network usage. That's a lot of increase in a very short of a time. We do see more complaints coming from the users, from the consumers. We have been deploying additional 4G network capacity for this relief. Okay? Now it's already getting better as more people now start going back to work, and then life resumes a little bit more normal now. Okay.
We also provide cloud service for the COVID-19 vaccination registration. This is a big thing. Almost everybody wants to get vaccinated. This registration and reservation system is hosted on the cloud service that provided by Far EasTone. For our COVID-19 contact tracing, this is using the geofencing and geolocation. This has a lot to do with the capability for geofencing and geolocating, FET is best at that among all the telcos, I can say that. To support this government solution. Okay. We have donated SIM cards, tablets, and the wireless routers for rural students or for those that are in need in order for them to be able to do the remote learning. That is just some small things that we do as part of our profession, we can easily or readily help our community. Okay.
For our second half priority, we will accelerate our 5G coverage and user penetration, and that is in terms of covering the nationwide to reach 90%. For our user penetration, our first major milestone will be the one million that we are looking at end of August. Hopefully another hundred few thousand by the end of the year. Also, we will continue to grow the total customer value on the consumer side. We use this FET Mobile Circle that will combine our telecom services and the new economy service that either we created from in-house, like our friDay Video, our friDay Shopping. We also work with many partners that will provide and will curate different services that will best suit our customer needs because we have good customer 360 insight, we can do more personalized recommendation for our consumers.
Then, it's not just a commercial to them, but it's some helpful information for them. Then so we can grow the total revenue or the total contributions of these subscribers that they can consume through this FET Mobile Circle for the services that we provide to them. Okay. On the industry or enterprise side, we will continue to expand our ICT business, also we have won many projects. The second half, we will have a lot of projects to finish. Then at the same time, we'll continue to build our alliance with other partners that may be across different industries. As we see, many of these ICT projects or ICT-related work, one company cannot do it all. The ecosystem support is very important. Then we will continue to control our cost, and we will use our capital smartly.
Even we only give ourselves a 9,000, even though that is already more than some of our peers, we want to make sure we deploy the stations at the right place, it will also maximize the return on what these stations can generate in terms of the customers that they can benefit from them. Okay. Last but not least, we will continue to enhance our customer experience. Customer first, customer centric is always something that we want to emphasize, and that should be part of Far EasTone DNA, and we need to continue to do better. Okay. That will be my last slide, and I now welcome your questions.
Yes. Thank you, President Chee Ching. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for any of today's speakers, please press 01 on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press 02 to cancel the question. Now, please press 01 to ask a question. Thank you. The first question is coming from Sara Wang of Morgan Stanley. Go ahead, please.
Thank you. I have three questions. First, would you please elaborate more on how would you enhance mobile customer value besides upgrading customers to 5G? Second question is regarding the ICT revenue. May I ask what percentage of the ICT revenue is recurring rather than project-based? My third question is regarding the full year CapEx guidance. Is that remain unchanged? What's the target number of 5G base stations by the year-end? Thank you.
Thank you, Sara. For the first question about FET Mobile Circle. This is a one-year loan project that we actually kicked off. So far we have 2.5 million downloads of this app. Through this app, the user not only can look at their telecom services, their bills, and then different rate plans, and then also different kind of devices that they need. They also see the other services that we offer, such as the digital entertainment, so our friDay Music, our friDay Video. Also it has this difference, like a product of the month, product of the week, or product of the day, those kind of offers from our friDay Shopping. Every customer that with their different information or insight that we have, so two different people that they log into the application, they may see different first homepage.
What will show on the homepage, what are recommended for them in terms of video choices will be different. What are the products that we show on the first page for them to recommend for them to buy is also different. We use personalized recommendation engine in this. Each time the customer log in or sign into the app, and then they stay actually active, and then they will see different things that will trigger their needs and then to buy things. We have with customers or with other partners that we also offer, because we don't own restaurants and all that, but then we have alliance with, like partnership with 7-Eleven. We have with the three major convenience store chains in Taiwan. We offer this coffee in any of them.
You have this coffee coupon that you can redeem in any of these three chain stores that you can get coffee. That is for the convenience. Also with Kentucky Fried Chicken, for example. They offer special discounts to Far EasTone subscribers. We kick in these discounts for our subscribers. This FET Mobile Circle is for Far EasTone subscribers only. This is a reward, a membership program kind of thing. It serves several purposes. First is we want to strengthen the engagement with our consumers. We want to strengthen their loyalty so they see themselves as a Far EasTone customer. There is a lot that we offer to our valued customers. Through this engagement, there are different services that we can provide to serve their needs.
Once they consume through this FET Mobile Circle, those become, either we have profit sharing with the partners, or those are the services that we created ourselves. By doing this, we are no longer only looking at these customers as they pay TWD 1,399 or TWD 999 a month for the telecom service. There's all these additional things that they consume or they buy from us. That's how we can add up the value or contribution every customer of ours that will be able to contribute. Okay. Does that answer your first question? The second question is regarding the ICT revenue, how much or what's the percentage of recurring? Do we have an answer right away?
I think we have some of the maintenance service, so we can have this kind of maintenance of the warranty period, so there will be around 10% at least. It depends on the different contracts.
Okay. Yeah. For the ICT business, a lot of them actually would have after the project is finished, but it's not the whole thing is finished, because what would come after that is the maintenance, the managed service, that they will ask us to provide. That will become the recurring part. That usually is about 10%. Right now, we actually don't have exact number on that. We can look into it.
Some projects are also going from here.
Right.
That is also different.
Right. Just like the smart streetlight project. That is 15 years of contract, and then so we will get this managed service for 15 years. Yeah. It varies. We can look at that percentage overall. Okay. All right. The third question, I think is about 5G.
Guidance.
Huh?
Guidance.
Guidance.
Okay, go ahead.
Okay. Sara, are you talking about guidance on DPS? Base station numbers or-
Is there any change in the CapEx guidance for this year, and then what's our target number of 5G base stations by the end of this year?
Okay. That's what I have said, 9,000. That's our budget number. Also, right now, we already have deployed 7,500. There's another 1,500 to go.
Our guidance in line so far.
Okay. Sara, is that what you're asking for?
Yeah. Is there any change in the guidance?
No.
CapEx or even revenue or profit, I think. Got it. Thank you.
Sure.
As a reminder, please press 01 on your keypad if you would like to ask the question. Thank you. We are now in question and answer session. If you would like to ask the question, please press 01 on your telephone keypad. Thank you. If you would like to ask the question, please press zero one on your keypad. Thank you.
It's Friday and everybody wants to go home.
Okay. There are currently no questions at this moment. I'll pass the call back to Mr. Gary Lai. Gary, please proceed. Thank you.
Again, thank you very much. That's our second quarter result conference call. See you next quarter.
If you do find some questions later, you can always contact Gary and his team, Amy. Thank you.
Thank you very much. Thank you. Bye-bye.
Thank you. Ladies and gentlemen, we thank you very much for your participation in Far EasTone's conference. There will be a webcast replay within an hour. Please visit www.fareastone.com.tw under the investor relations section. You may now disconnect. Goodbye.