China Digital Wireless, Inc. has completed two major milestones in the company's ongoing development of its out-of-home digital television advertising business.

The company reached an agreement with China Charity Foundation (CCF), a national non-profit charitable organization, under which China Digital Wireless will install donation boxes for CCF in banks and other commercial locations throughout China that are accompanied by the China Digital Wireless's out-of-home digital television advertising media platform.

The out-of-home digital television advertising business is expected to be a major source of revenue and profit growth for the Company. With installations in approximately 400 locations at the end of the second quarter of 2005, China Digital Wireless reported advertising revenue for the quarter of $736,787, a 90% increase over first quarter advertising revenues.

China Digital Wireless has installed digital television advertising media over 600 locations in the Shanghai region to date and expects to have 1,200 locations by year-end 2005. The company has previously announced its target of installing digital television in 10,000 locations by the end of 2006.

The completion of this agreement enables China Digital Wireless to accelerate its placement of out-of-home digital television, particularly in banks across China.

The company negotiates placement of the donation boxes and digital television media with banks and other commercial entities that wish to support the national charity.

This agreement facilitates the continuing placement of digital television advertising media with little or no direct location costs to China Digital Wireless.

The China Banking Regulatory Commission (CBRC) has previously agreed, pending completion of the agreement with CCF, to support and coordinate this effort with respect to approvals of multimedia donation box placements in banks throughout China.

China Digital Wireless will contribute 10% of the net profits of its digital television business obtained through these collection boxes to CCF during the term of this agreement.

The company is also obligated to invest approximately US$4.95 million to expand its digital television advertising business within the first year of the agreement. The company says it believes an investment of this amount will enable it to achieve its objective of 10,000 locations by year-end 2006.


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