VelaTel Closes Its Acquisition of China Motion Telecom

Source GLOBE NEWSWIRE

SAN DIEGO,– VelaTel Global Communications (OTCQB:VELA), a leader in deploying and operating wireless broadband and telecommunication networks worldwide, announced today that it has closed its acquisition of a 100% equity interest in China Motion Telecom (HK) Ltd. for a total purchase price of approximately US$6.4 million, with US$1.6 million paid in cash and the balance in the form of a promissory note payable within six months (contract amounts are in Hong Kong dollars).

China Motion, www.cmmobile.com.hk/eng/, is the leading mobile virtual network operator (MVNO) in Hong Kong, with more than 100,000 customers. China Motion generates approximately $12 million in revenue and $2 million in EBITDA (net of certain intercompany charges) on a consistent and annualized basis over its past two years’ financial statements (FYE 3/31). VelaTel will be entitled to consolidate China Motion’s future results into its financial statements as of the March 1 closing date. VelaTel also intends to immediately upgrade China Motion’s network operations center from 2G to 4G technology. “We expect to complete the upgrade in the next three to six months, and for this to result in a 25-50% increase in revenues by having the ability to offer customers enhanced data packages,” noted VelaTel’s CEO George Alvarez.

As an MVNO, China Motion partners with leading mobile carriers in the Greater China region to provide mobile wireless network services to retail customers using its own billing support systems, customer service and sales personnel. China Motion’s business model focuses on frequent travelers who conduct cross-border business between Hong Kong, Taiwan and mainland China. China Motion is the first company in Hong Kong to offer customers a single cell phone SIM chip with dual number capability for use in either Hong Kong and China or Hong Kong and Taiwan.

The acquisition of China Motion furthers several of VelaTel’s long term strategic goals. First, China Motion’s access to wholesale voice and data services using the wireless network resources of incumbent carriers will allow VelaTel to begin deployment of its projects in mainland China with a fraction of the capital expenditures originally budgeted. Second, China Motion’s experience and personnel in sales and marketing, customer service and billing solutions provides a platform to serve VelaTel’s wireless broadband and voice networks worldwide. Third, the acquisition creates tremendous synergies with VelaTel’s Europe based subsidiary Zapna, which also focuses on long distance and roaming solutions that cater particularly to the frequent international traveler. “The roaming and long distance solutions offered by China Motion and Zapna complement each other. We expect the revenues of both subsidiaries to increase as each gains exposure to customers beyond their current regional markets in Northern Europe and Greater China,” remarked VelaTel’s President, Colin Tay.

About VelaTel Global Communications, Inc.
VelaTel acquires spectrum assets through acquisition or joint venture relationships, and provides capital, engineering, architectural and construction services related to the build-out of wireless broadband telecommunications networks, which it then operates by offering services attractive to residential, enterprise and government subscribers. VelaTel currently focuses on emerging markets where internet penetration rate is low relative to the capacity of incumbent operators to provide comparable cutting edge services, and/or where the entry cost to acquire spectrum is low relative to projected subscribers. VelaTel currently has project operations in Hong Kong, People’s Republic of China, Croatia, Montenegro and Peru. Additional target markets include countries in Latin America, the Caribbean, Southeast Asia and Eastern Europe. VelaTel’s administrative headquarters are in Carlsbad, California. For more information, please visit www.velatel.com.

The VelaTel Global Communications logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13404

Safe Harbor EXPAND for Detail(s)

This press release may contain forward-looking statements involving known and unknown risks, uncertainties and other factors that could cause VelaTel’s actual operating results to be materially different from any historical results or from any future results expressed or implied by such forward-looking statements. Readers are urged to consider statements that contain terms such as “may,” “will,” “should,” “believe,” “expect,” “project,” “intend,” “anticipate,” “plan,” or “estimate” to be forward-looking. VelaTel does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise. You should independently investigate and fully understand all risks before making an investment decision.

VelaTel Global Communications, Inc.
Tim Matula
Investor Relations
(Toll Free) 1-877-260-9170

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