Guangzhou Global Telecom has signed a Letter of Intent with Zhengzhou Wangtian Electronic Technology to acquire a 60% equity interest in Wangtian by issuing common stock.
The exact purchase price will be determined upon completion of the US GAAP audit of Wangtian.
Wangtian is a service provider which provides system integration services to telecom operators, government institutes, education organizations and enterprises. Its unaudited revenue in 2006 is around US$1 million with net
profit of $100,000. During the first 5 months of 2007, the unaudited revenue is around US$500,000 with $50,000 of net profit.
According to published statistics, the number of mobile phone users in Zhengzhou was approximately 4,527,000 at end of September 2006, roughly 63% of total population of the city. The mobile users increased by 1,010,000 during the nine months ended September 2006, which represents a 30% increase for year to year comparison if projected to the whole year of 2006. According to statistics, the coverage of mobile users in Zhengzhou is only 63%, compared to 93% in other major cities of China.