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Vtion signs Framework Agreement with China Unicom to provide 500,000 3G Wireless Data Cards

  • Major Sales Order

Frankfurt, 8. February 2010.

The Vtion Group, one of the leading suppliers of wireless data solutions for mobile computer use in China, has signed after the early-year bidding process an agreement with China Unicom to provide 500,000 3G wireless data cards over the first several months of 2010 to support the China Unicom's WCDMA network rollout. This represents the largest single order that China Unicom has issued for 3G cards since it began operating its WCDMA network. The agreed average selling price is 340 RMB per 3G wireless data card resulting into a sales volume of approx. Euro 17 million. Despite the price decrease in comparison to the average price 2009, the gross margin of the sale is not significantly affected, as the company was also able to reduce costs due to economies of scale. This framework agreement with China Unicom headquarters continues to position Vtion as a key strategic partner and major supplier to China Unicom through China over the course of the year as China Unicom begins major development of the WCDMA 3G wireless network across China.

"Throughout Vtion's history, the company has been a close strategic companion of China Unicom, both at the headquarter and provincial levels, and this framework agreement is indicative of the extent to which we work closely together with China Unicom to jointly develop China's 3G industry," said Vtion CEO Chen Guoping. "We have always maintained that early 2010 would be a critical time of development for China Unicom's WCDMA network, and given the strength of that technology we look favourably upon it's prospects. This agreement enables strong growth of their network and user base, and also puts Vtion in a favourable position to capitalize on that." he added.

While the selling prices Vtion negotiated are down from the 2009 averages, the company managed to offset that by lowering costs, minimizing the effect on the gross margin. The size of the agreement is a testament to the high regard in which China Unicom holds Vtion's product quality and service standard. This is indicative of the strength of the relationship with China Unicom, which allows Vtion to not only remain a hardware supplier for future orders such as these, but to also provide a greater offering of high-end products, as well as develop the service and VNO modules of the business in conjunction with China Unicom. Vtion will continue to work tirelessly as a faithful partner of all three telecom operators, in order to allow China to experience the benefits 3G technology brings.

The Chinese wireless network industry is currently going through a process of market development from second generation networks to network standards of the third mobile phone generation - known as 3G standards. China is the only country in the world with three different 3G wireless standards, the CDMA 2000 EVDO Network operated by China Telecom, the WCDMA Network operated by China Unicom and the TD-SCDMA Network operated by China Mobile. Network rollouts for the latter two networks are still in progress; the Vtion Group is expecting the completion of the establishment of 3G mobile networks to lead to a further increase in demand for wireless data cards in China.


About Vtion

The Vtion Group is one of the three leading suppliers of wireless data cards and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. The Vtion Group concentrates mainly on the development and sale of wireless data cards, including provision of appropriate after-sales services. The Vtion Group also supplies Internet-based data service solutions. The company has about 150 employees. The Vtion Group generated sales of EUR 39.2 million and a net profit of EUR 12.4 million in 2008. The Vtion Wireless Technology AG shares are being traded in the Prime Standard on the Frankfurt Stock Exchange with the ISIN DE000CHEN993. The company's ticker symbol is V33.


For further information, please contact:

Kirchhoff Consult AG
Dr Kay Baden, tel.: +49 40 60 91 86 0,
Janina Wismar, tel.: +49 40 60 91 86 50,


Disclaimer concerning forward-looking statements

Certain statements in this communication contain formulations or terms referring to the future or future developments, as well as negations of such formulations or terms, or similar terminology. These are described as forward-looking statements. In addition, all information in this communication regarding planned or future results of business segments, financial classification numbers, developments of the financial situation, or other financial or statistical data contains such forward-looking statements. The company cautions prospective investors not to rely on such forward-looking statements as certain prognoses of actual future events and developments. The company is neither responsible nor liable for these forward-looking statements. It is not responsible for updating such information, which only represents the state of affairs on the day of publication.

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