Strategic Alliance with China Motion Telecom Holdings Limited

As a strategic move to expand into the China market, China Motion Telecom ("The Group") has developed a strategic partnership with China Motion Telecom Holdings Limited (formerly known as China Motion Telecom Development Limited, "CMTH"), a well-established telecom service provider in China who owns most of the telecom service licenses of China.

Since the partnership in 1992, the Group has been marketing cross-border telecom services with CMTH under the same brand and co-operating several joint venture projects in China. They include establishing warranty and repair centers for telecom terminal products in Shanghai and Guangzhou; running retail chain stores in Eastern and Southern China, modeling the "CM Concept" operation mode of Hong Kong. To further explore the untapped China telecom, the Group, in March 2000, entered into a Memorandum of Understanding with CMTH, which stipulates the merge and consolidation of strategic telecom assets between both parties, according to the timetable that China has committed to the World Trade Organization in opening up its telecom market.

CMTH commenced its business as a paging operator in China, within ten years, it has developed into a telecom full service provider, with an asset of excellent branding and servicing profile. Upon China's formal accession to the WTO, CMTH's positioning is well defined: a virtual network operator and value-added services provider in the China telecom marketplace.

By consolidating these strategic telecom assets of CMTH, the Group is in a unique position to be able to pursue and expand rapidly into the vast market of China.