BMI View: We retain our view that the Taiwanese telecommunications market is highly competitive andhome to a tech-savvy population, propelling the market with high usage of advanced mobile and wirelineservices. The market continues to perform in line with our forecasts and there have been no major changesto the five-year outlook. We note that the three major operators command close to 90% of the mobilemarket and we believe pressure for smaller operators to merge or be acquired will intensify in 2017 asunlimited mobile data plans are still the norm in Taiwan and this strategy to encourage subscribers toincrease data consumption will continue to eat into ARPU in the medium term. As the countryapproaches the 100% 4G LTE penetration rate, and no more room for 2G/3G migration, operators will belooking to enhance their revenue streams in the coming years. Focusing on expanded services anddeepening their relations with existing customers by upselling premium attractive offers till the advent of5G will fuel growth beyond 2017 and out to 2021. Over the medium-term, operator infrastructureinvestments remain crucial as 5G and connected technology of the future will have to provide long-termgrowth in a technologically saturated market.