Welcome everyone, to Far EasTone's 2024 Q3 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 a question. For your information, your 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 to attend Far EasTone Q3 2024 results conference call. Both our President, Chee, and CFO, Sharon, joined the call with us today. Finally, please pay attention to our Safe Harbor statement. Let me pass to President Chee for presentation. Thank you.
Thank you, Gary. Good afternoon, everyone. Okay, so here I'll report our Q3 performance. As you could tell, we actually grayed out this revenue achievement rate. That is 96%. In other words, our Q3 revenue slightly fell short of our guidance. This is mainly because of our handset-only sales. We have adjusted our target for it. The original target was higher, but then as we have observed during the Q3, the price of the iPhone has dropped faster than we expected, and then because of some market activities, we decided not to follow and not to dump our iPhones at that time, but then because we could just do more bundled sales with iPhones, so we adjusted down our handset-only sales, so this is as a result our revenue fell a little bit behind, but then this is to maintain our reasonable margins.
As you can tell, our EBITDA is 12.7% year over year. And in terms of our board target, we actually exceeded our board target by 2%. And similarly, for the net income, that is also performing very well. All right. And then another thing that I'd like to bring to your attention is if you look at our year-to-date, the first three quarters EBITDA, we have come to TWD 26.93 billion. And compared to the same period last year, it was TWD 23.93 billion. And as I recall, when we first announced that we were going to merge with APT, there were analysts on the questions and asked us, "What do we expect?" And at that time, what we gave out was, "We expect TWD 3 billion EBITDA that will benefit from the merger in a year after the merger." So we actually achieved that in three quarters.
Ahead of schedule, of course, our organic growth without the APT part certainly would need to grow as well. That certainly helped. This is just to tell you that we have fulfilled our promise. 3 billion EBITDA merger synergy within a year, and that was delivered in nine months. Okay. In terms of the EPS, as you're all aware, right, because of the merger, the number of shares has kind of inflated like 10% or so. If you adjust it, in any case, we are looking at a 2.55 right now. Compared to last year, 2.56 with a different denominator base, it is close. If we look at our guidance, we are actually 14% better than our guidance.
Then just for my own kind of apple-to-apple kind of comparison, if I use the same base, this would be a 2.82 kind of EPS, right, compared to the same base last year. So we have done better than we originally expected because of the merger synergy, and we did execute really well to pull it up. Okay. The next page, just in terms of the trending, we can take a look. So for the total revenue and the Q3 revenue, it is 6.5% year over year compared to the same quarter last year. And then this is so the merger synergy, of course, right? But then on the other hand, our 5G plan upgrade, that is just a continuous, very steady upgrade. And then with additional upgrades from the former APT customers.
And then this is the 16th consecutive quarters that we have seen a positive YOY growth for our mobile service. Okay. And for the EBITDA, it comes to TWD 9.1 billion for the Q3. This is actually a new record high in FET history. Okay. So 12.7% is YOY EBITDA growth. And this is definitely the merger synergy. As I mentioned, we executed very well. So the benefit comes in two major categories. One is the OPEX savings, right? So we have converged or migrated the RAN network. So a lot of that migration work has been completed. And then it was ahead of target. So we had big savings there. And then on the other hand, right, from the customers, the customers, when we migrate their customers to Far EasTone rate plans, and then so it's not just the plan migration, but we also have seen a good uplift.
And then, so combined together, that gives us a very good EBITDA growth. Okay. And next is the net income. Okay. So the Q3 net income is TWD 3.16 billion. And then the EPS comes to TWD 0.88. This is achieving the target by more than 9%. And this is also an eight-year high for the same period. Okay. And by the way, when I said the Q3 EBITDA record high, that is not just for that quarter. It is just for all time, period. Okay. All right. And then the YOY growth rate for our net income is in double digits, 11.7%. This is two quarters in a row now for double digits. Okay. All right. And some financial metrics for your information. And as you can see, our net debt and our net debt to EBITDA, both are sound and healthy. Okay.
We come from TWD 55.88 billion to TWD 49 billion in terms of the net debt. And also the ratio, right? So from 1.74x to 1.54x. Now, in terms of the cash CapEx, we expect to be a little bit slightly lower than our guidance of TWD 8.1 billion, mainly because of the timing of the payment when they will be realized, the final acceptance and all that. Okay. But then basically, it is close to our TWD 8.1 billion guidance. Okay. That is for the cash CapEx. All right. And a few more points on the telecom core business area. So our mobile service revenue continues to grow. And then for the same period, the first three quarters, we are looking at 18% growth. And our postpaid 5G penetration continues to lead our peers as the number one. And we now have 42% penetration for the postpaid customers. Okay.
And then for the mobile postpaid ARPU pool, we still maintain the lead even after post-merger. So we are at a 703 versus our rivals or my peers. And then postpaid churn rate is stayed at about 0.9%, although we continue to work it down. And then so far, this is on a good track. Okay. And then for the new economy part, for the last two years, we've been emphasizing since now, especially on the enterprise side, we have established our reputation in our smart ICT capabilities and then the actual deliveries that we have made in the past. So we've been optimizing in terms of the profitability and in terms of our selection of the project and also de-risking in our cloud services. And then to make sure our portfolio for the managed cloud service customers is healthy and sound.
So what you're looking at is we actually are able to increase our solutions efficiency and then ICT portfolio. So we have much better margins. And then this rose to 18% year over year in the first three quarters. So compared to only 7% YOY increase from 2022 to 2023. Okay. And so some highlights for the contributors in the consumer digital part. So the consumer new business that accounts for the total pie of the new economy, about 44%. The enterprise part is bigger than half. So it's 56%. And then some of the digital services in the consumer side already are very steady. And then we see double digits in the revenue growth and also double digits in the margin growth. And then so that is like the handset insurance or direct carrier billing and things like that.
Now, for the fraud prevention service, which is kind of new for us, and this is to block attempts to dangerous websites, so these access will be checked by our network. For customers that subscribe to this service, if they click some link that actually would lead them to some dangerous website, and then that could be harmed. Their device could be harmed because of that. For those kinds of attempts, if the targeted or the destination website or link is in our database for this kind of like a blacklist, and this attempt will be blocked. Then we are protecting our users from reaching those dangerous or we actually this includes some inappropriate web that is not for the use, those kinds of protection from the parents' perspective. This kind of service is getting a lot of acceptance.
We are looking at very good growth compared to the first year launch. Right now, we have more than 300,000 users already subscribed to this service. The conversion rate, when we give them like a three-month trial period, and then the conversion rate is like more than 60%. Compared to other services in the past before, this is a very good ratio. This is something we'll continue to promote. This is also good for the society anyway. Okay. For the revenue from the enterprise side, so our Smart ICT business, and that includes the cloud, is still giving us very good growth and also very good margins. As you can see, the double-digit 11% for the revenue and 29% for the margins. We have two subsidiaries that especially worth mentioning here.
First one is NextLink, and they were already listed. And then hopefully, we'll be soon traded on the open OTC by the end of the year. And then for NextLink, we are looking at an EBITDA that is 28% year over year. For the past few years, NextLink has grown very fast. And as I said, we have made some adjustment to the customer portfolio. And then so we are looking at also they are improving their margins as well. And at the same time, de-risk from some market churns and all that. And the other subsidiary is offering the security service. And as you know, the information security is a hot topic, right, for every company and even for the government. So the demand is always high. In the past, we had challenges in retaining the talent and growing the staff.
And this two years, we have offered some stock programs, stock option programs. So that helped stabilize our staff, our experts. And then so it is growing very well. And this year, we are already looking at 23% revenue. And also the EBITDA is 33% year over year growth. And so hopefully, this will be our next we call it the gold chicken, the second one. Okay. Next slide. Just some brief intro about NextLink. And in the past, I don't think we particularly introduced about them. So it is a managed cloud service provider. It started with the AWS, and then also it has the GCP. It has a different legal entity to serve Google as well. So in terms of the market position, it is the number one for the AWS as the managed service provider. And then it also gets AWS Partner of the Year.
For the GCP area, it is actually growing very well when I look at the revenue because we separate AWS and GCP, and GCP, we are seeing a very strong growth in this area, so overall, NextLink has been doing very well. We acquired them in 2019, and then for the last five years, so I think we have nurtured this company really well, and then the CEO of the company, who was also the founder, is a very good, excellent entrepreneur, in my opinion, so we are looking forward to their starting trading on OTC. Okay. All right. We have some highlights to report here for our ICT business, so we see a strong ICT demand that continues, and then especially in terms of total Smart ICT contract value, which is a forward-looking kind of indicator, it continues to grow with a double-digit year-over-year.
Now, we have acquired this Microsoft OSP license a year ago. So this is the second year we are offering as the OSP for Microsoft. This is to build a very good cushion for our Smart ICT business because these are subscription-based business. So once we get these contracts, and then it's kind of like building up our revenue streams, right, year over year. And then so if you look at the first nine months or the first three quarters, the contract value grew more than 100%. And then also it already exceeded the full year contract value for last year. And also in terms of the number of enterprise account clients has grown 44% year over year. And then what comes with it is because of the GenAI.
So we see a lot of AI-enabled digital transformation opportunities. So while we deliver these solutions and then we endorse Microsoft products, and also we provide a professional service to help the client with cloud migration or implementation of a common data platform and also help them adopt the AI or GenAI kind of enabled applications. So this is definitely a growing business, and it has got a lot of attention and interest from the industry. Okay. In terms of the green and smart city area, we continue on our kind of focus on a couple product lines that is energy management related. So we have like and also IoT, of course. So we have just secured a big smart metering IoT project and then several public EV charging projects in the Q3. Okay.
And also because of sustainability, it is becoming a very important area for our government and also big enterprise. So we have seen a lot of demand in terms of the telecom-based SI projects. So we won several big fiber optics construction projects, and then those are telecom-based. And then also we have a smart building project that we won in the Q3. And then for the smart building, we don't build the building, but then we come in with the energy management system and then also the monitoring system and all that. So it's on the software system side. Okay. And last but not least is the smart health. For the first three quarters, our revenue grew 28%. It is a steady growth because this is health-related.
So it kind of paced with how soon the regulation changes or relax on some of the restrictions, which they have in July. So this new telemedicine type of regulation, 2.0, was started effective in July. And that gives us more scenarios where 5G telemedicine could be used or applied. And they can be reimbursed by our government Medicare. Okay. So in terms of the coverage of the population, when we used to only do the rural areas in those far to reach kind of areas, that was about 330,000 kind of people. But then now we are looking at 2.4 million folks that will be covered in the new scope, the expanded scope that was effective since July. So we do see a lot of opportunities there. And then we are pushing for more hospitals and clinics to sign up for this service.
And so far, we have 77 of them. This is at the same time we are expanding this kind of service to like ambulance, right, this technology for ambulance. And we are also donating to by the end of the year, it will be 12 counties that will receive this first set of this system. And then in return or as a result, when they tried it out, they do see the value and then it's life-saving value, by the way. So we are getting the orders from some of the counties already to order more because every county has so many ambulances that they could all benefit from this service. Okay. And we are also working on Cloud HIS. And this is a policy our welfare and health ministry are pushing for. They really are pushing for like a digital transformation. We have lots of clinics.
They are still using kind of more traditional type of a HIS, and then some are even still manual, so they are encouraging them to go cloud and then with the telemedicine kind of capabilities and all that, so we are also applying for this program because the government has like two ways. One is they encourage the system providers that already are in this business, but they are the traditional kind of HIS. They also encourage us to come in because we have all the new technologies already, and how do we combine what's already there, like the basic HIS functions, and then on top of it add to our new advanced technologies, so this is what the government is pushing for, and then that is what we are working on as well, so we just passed their midterm and then final exam.
So we get some subsidy for that. But then more importantly, next year, the government is going to ask the clinics all kind of conform to this new kind of system. They will give them a period of time to apply for it. And then if they do it early, they have some compensation for them. But if they don't do it within a certain period, like a year or two, and then their system will not pass those information security kind of criteria. So we have this kind of ride on the wave where the government is pushing. And then so we see this natural expansion from what we are doing in the smart health area. And also we have done something overseas. So we actually just recently, we have teamed up with our Far Eastern Memorial Hospital that is in our group.
So we teamed up with them to visit one of the Southeast Asia countries to kind of test out this telemedicine. And the POC was very successful, and it generates a lot of interest. And also we already start working on the collaboration because they definitely have a need, and they could use this technology. And then our platform is proven because it's overseas. You won't be using FET's 5G here, but it's using the local telecom capabilities, including the satellites. So it was all already proven from this POC. So this is one of the few areas that we will start seeing our solutions can go overseas. Okay. All right. For the consumer service highlights, the new iPhone launch, that definitely always helps with the new ads and then especially with the 5G upgrades.
Although this time, the new iPhones, as kind of always, it just didn't come enough, right? So that also kind of we always expected that, but then still what we actually got is still a little bit less than what we expected. That also contributed to our Q3 revenue feel a little bit behind. But then still, in terms of its effect in boosting our bundled service sales, that is still there. Okay. And then close to 90% of those that signed up for our service, they actually signed up for the higher rate plans. Those are like 999 or higher. Okay. And then our friDay Video, as we have reported before, that has actually been holding the number one local OTT platform. This year, it won the award again. So it's a four-year scenario.
And also it is the number one for both online buzz and then user engagement. This team, we are the first adopter in FET and also, I believe, in Taiwan. Now we actually use the GenAI to generate this AI kind of you query what movies to watch, and then you can have this dialogue with AI. And recently, we even added the voice input directly. So all these features actually help us see more active engagement and longer view time by the users. So that is something we'll continue to improve and using these GenAI mini features that we can apply to our various services to help our consumers to enjoy. Okay. So in terms of the we actually see a 23% increase in the viewing time per user. This is really much better engagement. And then so that is all good.
Now in terms of the paid subscribers for this Guardian Network, that is the fraud detection I was talking about. Then we actually see the triple-digit growth that I already mentioned in the previous slide. Okay. And then also, FET's this chart on the left is actually showing for those reported they receive fraudulent calls from this number. And then so which carrier actually that number comes from? The higher, the worse in terms of the telco. So for FET, it's a red line, as you can see where I have a red arrow going down. That was back to 2018. That was when we first got a concerned letter from the officials saying they are getting a lot of reports. The fraudulent calls actually come from FET's SIM number. So we then started this Big Data analytics and also AI Machine Learning project.
So we were able to work it down. And then since you can see the red line is the one that is closest to the ideal. So then we have the others are our peers. But then this is something we continue to do and then using the AI to get better with the detection of these kind of calling numbers. And then so we can actually terminate their calls before they reach the end users. So this has been very effective, and this is also part of our CSR responsibilities that we do. Okay. All right. And then so we have received some major honors and recognitions and some in the environmental sustainability area and some in terms of our corporate governance.
Our customer service received the best AI system application team award because we use GenAI to improve our text chatbot and also the knowledge management in the database for our care center people to quickly answer the questions from the users. This was especially helpful during the migration because our customer care folks need to all of a sudden help serve the customers that are from APT, which has different kind of offerings. That quick migration and big demand all of a sudden, that was eased by us using GenAI to introduce this GenAI-enabled knowledge management. That proven to be very effective. We had a very smooth transition during the migration period. Okay. All right. This is already close to the year end.
My team always asks me, "We need to talk about our priority." I say, "It's already close to the end of the year." We need to continue to deliver our smart ICT projects on time and on budget. Of course, if they are on time, then we'll be able to book the revenue. And then also our CloudHIS, that's the one project I was talking about that we are getting ready for the Q1 soft launch because clinics will be able to subscribe and start using our system. Okay. And then we will continue on the right course as we have been doing very well. The team, I'm very proud of FET team, and I believe we'll finish the year strong. Okay. With that, I conclude my presentation today. Thank you.
Thank you, President Chee.
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 Star one 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 star two to cancel the question. Now please press Star one on your keypad if you would like to ask the question. Thank you. Please press star Key and Number one on your keypad to ask the question. Thank you. We are now in Q&A session. If you would like to ask the question, please press Star Key and Number one on your keypad. Thank you. As a reminder, please press Star one on your keypad if you would like to ask the question. Thank you.
Well, I think we've asked again if there are any questions for President Chee and CFO Sharon. But I believe Chee's presentation is very clear.
And of course, you can always follow up with our IR team.
[crosstalkYes, of course.
Just remember, yeah, we will finish the year stronger than we expected earlier this year. Yes. Thank you.
Ladies and gentlemen, we are now in question and answer session. Please press Star 1 on your keypad to ask the question. Thank you. Okay. Then there are currently no questions. Then I'll pass the call back to Gary Lai. Gary, please proceed. Thank you.
Okay. Thank you very much again for attending our Q3 conference call and see you next quarter. Thank you.
Thank you.
Thank you. A nd ladies and gentlemen, we thank you 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. Thank you and goodbye.