CDC Corporation's (CHINA) mobile value-added services business unit CDC Mobile has entered into a letter of intent to make a strategic investment in japan's BBMF Group.

Under the letter of intent, CDC Mobile intend to invest US$20 million in convertible bonds issued by BBMF Group and the two companies would form a strategic alliance in operations to jointly target 3G markets in Japan and China. CDC Mobile would have a first right of refusal to distribute BBMF's 3G products and services in China, subject to terms to be agreed between the parties.

"We are very impressed by the strong growth and vision of BBMF, and their established leadership position in the 3G markets in Japan," said Fred Wang, Chairman of CDC Mobile. "Through this investment, we are looking to participate in this rapidly growing market in Japan and prepare our company to capitalize on the anticipated 3G market in China as it develops in 2008. Our 3G Content Provider program allows us to take advantage on similar opportunities with other 3G companies, furthering our ability to seize the 3G first-mover advantage in the largest and fastest growing mobile market in the world."

This will be the first of CDC Mobile's MVAS targeted investments through its recently announced US$100 million 3G Content Partner Program designed to provide first-mover advantage in the anticipated 3G content market in China.

Headquartered in Tokyo, BBMF Group is a market leader in 3G content in Japan with one of the largest mobile comic site and mobile online game site in Japan and one of the largest library and fastest growing number of files and titles available for download on any carrier. The company has licensed the right to publish mobile versions of over 1,300 comic titles by 470 authors. The company has recently been experiencing significant growth with 30 to 40% month- over-month sales growth during Q3 and Q4 of 2006. Based upon revenues in December 2006, BBMF's annualized revenues would be approximately US$20 million with gross margins of over 60%, and revenues are anticipated to grow significantly in 2007. The company has more than 620 total employees with 120 workers in Tokyo and the remainder located in offices in Nanjing, Hong Kong and Taiwan.

Japan is one of the early adaptors of 3G with more than 60% of mobile subscribers already using 3G handsets. The 3G content market in Japan is projected to be US$1.2 billion by year 2008. According to the China's Ministry of Information Industry, mobile subscribers in China reached 461 million, and the mobile penetration rate reached 35% at the end of 2006. According to a published speech from the Minister of MII, 3G services in China are expected to launch in 2008.


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