VelaTel to operate TD LTE network for China Aerospace Science and Technology Group

VelaTel Global Communications, a provider of deploying and operating wireless
broadband and telecommunication networks, announced its agreement with
Aerostrong Company of China.

Aerostrong holds PRC-issued value added services licenses to provide telecom
services via satellite nationwide and internet access service in 18 major
cities. Aerostrong will apply for additional licenses for radio frequency
spectrum to provide wireless broadband access (WBA).

VelaTel, through a PRC operating company subsidiary, will enter into an
exclusive service contract with Aerostrong to deliver WBA and related
telecommunications services to CASC and its affiliates utilizing Aerostrong’s
licenses combined with infrastructure equipment VelaTel will finance.

The operating company will also provide all engineering and network management
services, including engineering VelaTel has already completed for 29 major PRC
cities in connection with a different WBA project.

Aerostrong will pay the operating company service fees to be specified in the service
contract. The operating company will deploy and operate Aerostrong’s 4G
network, which will employ TD-LTE technology using equipment manufactured by
VelaTel’s strategic partner ZTE.

“Securing one customer with 100,000 users compared to 100,000 unique
subscribers creates a different financial dynamic in terms of faster revenue
ramp up, reduced marketing expense, avoiding user turnover, and delivering
customer service,” said VelaTel’s President Colin Tay.

VelaTel and Aerostrong expect to finalize the service contract before year-end 2011 and
for Aerostrong to secure additional licenses for the 4G network by the end of
the first quarter 2012.


The 4G network will serve primarily as a private network for employees of CASC
and its affiliated companies, and their respective customers and suppliers. The
parties expect that the first phase of deployment will include CASC’s Beijing
headquarters campus and its corporate users.

“These projects present a new business model for us in China. These companies,
like universities, municipalities, and other government and quasi-government
agencies, have specialized needs for integrated network services. The number of
users CASC can assure us under a long term contract justifies our investment,
and provide different revenue vehicles to ride the broadband explosion in
China,” said VelaTel CEO George Alvarez.

By Team

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