With all of us mainlanders tucked cozy in our beds overnight on Thursday, Taiwan's largest telecommunications company, Motley Fool Income Investor pick Chunghwa Telecom (NYSE:CHT), reported its financial results for the second quarter and first half of 2007. The company turned in some respectable operational figures but, as expected, didn't exactly light up the wires in the growth category.

Chunghwa reported a 9.2% increase in revenue for the second quarter, while net income climbed 46.1%. The juice to the bottom line came from a significant decrease in tax expenses and lower personnel expenses, with thousands of workers having now taken an early retirement. On the down side, cash from operations dropped 29% in the first half, as the company paid out more performance-based incentives to employees.

The bulk of the revenue in the second quarter was split fairly evenly -- with 31% coming from fixed-line services, 37% from mobile communications services, and 24% from broadband Internet and data services. But subscribers are gradually moving away from traditional fixed-line services in favor of either a mobile plan or broadband Web-based calling services.

This story is no different from anywhere else in the world, where telcos such as AT&T (NYSE:T) and Verizon (NYSE:VZ) fight to keep customers who might be tempted by cheap calling and Internet plans from the likes of Vonage (NYSE:VG) or eBay's (NASDAQ:EBAY) Skype. Keeping these churning subscribers with Chunghwa and not drifting into the arms of nimble competitors is a tough task.

While Taiwan has a highly saturated mobile-communications marketplace, there are pockets of growth in broadband and next-generation, or "3G," wireless sectors. Chunghwa is faring well here by clocking in a 31% increase in its 3G subscriber base in the second quarter. That's important, because, on average, these customers spend 58% more than do customers signed up for older-generation, or "2G," services.

Chunghwa isn't anywhere near showing the kind of across-the-board growth that's driving stocks such as China Mobile (NYSE:CHL) through the roof -- and it shouldn't be. With more heated competition in Taiwan, the former government monopoly counts gains in inches, not miles. Chunghwa is a stock for patient investors who like a generous dividend while the company reforms itself to focus on dominating higher-growth sectors.

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Fool contributor Dave Mock often goes looking for his car key but instead finds chewing gum, pacifiers, and dust bunnies. He owns no shares of companies mentioned in this article. Dave is the author of The Qualcomm Equation. China Mobile is a Global Gains recommendation. eBay is a Stock Advisor recommendation. The Fool's disclosure policy has the patience of a saint.