Big Volume Today for China Tel Group (PINK:CHTL)

ZTE Corporation, a global provider of telecommunications equipment and network solutions, and China Tel Group, Inc. (PINK:CHTL), a US-based operator of wireless broadband and telecommunications networks, recently announced, in a press release, that they have signed a contract for ZTE to supply ChinaTel with infrastructure equipment for the nine city wireless broadband network China Tel is deploying in the Fujian province. As I write, shares of China Tel were up 5 percent at $0.205 per share on heavy volume of nearly 650,000 shares compared to its average daily volume of just under 2 million shares. ChinaTel has a market cap of $85 million and a 52-week range between $0.13 and $0.78 per share.

The value of equipment for the first two cities is $9.57 million. The parties have agreed on component pricing for future equipment in the other seven cities, which will be ordered upon completion of engineering work to determine final equipment needs. The parties will also enter into a separate contract for ZTE to provide professional services including network planning and optimization and equipment installation for all nine cities.

Phase 1 of the Fujian wireless broadband access (WBA) project will focus on two major cities: Fuzhou, the capital city of Fujian province, and Xiamen, one of the four special economic zones in PRC. Phase 2 of the Fujian WBA project will expand to seven additional cities (Quanzhou, Zhang Zhou, Longyan, Putian, Sanming, Nanping and Ningde) within the next 8 months. ChinaTel will complete engineering for the Phase 2 cities by Q3, 2011. The equipment contract calls for delivery of 172 base stations and associated core equipment for installation in Xiamen and Fuzhou. ChinaTel projects the equipment for Phase 1 will be delivered by July 2011, and construction of Phase 1 will be complete and a commercial launch of the network in Fuzhou and Xiamen will occur by Q4, 2011.

All nine cities covered by the current phases of the project are within Fujian Province, which enjoys status under PRC law as Haixi Special Economic Zone, to promote foreign investment and international trade. “We expect to benefit in a variety of ways from the relaxed economic regulations in effect in Fujian Province, in terms of the services we will offer, as well as the technology we will employ,” stated ChinaTel’s President Colin Tay.

For more information about ChinaTel, visit www.chinatelgroup.com. To learn more about ZTE, visit http://wwwen.zte.com.cn/en/.

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