B U S I N E S S P L A N

PROPRIETARY AND CONFIDENTIAL

This Business Plan is presented for informational and evaluation purposes only. The information and ideas contained herein are to be held in the strictest confidence by the reader and are not to be divulged or acted upon without the express written consent of The Company

Telecom, Inc.

For Further Information Contact:

xxx CEO, The Company Telecom, Inc.

661-833-4424

or

Dee DeWitt, 502.599.0212 Veridian Financial

The Company, Inc.

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CONFIDENTIALITY and LIABILITY STATEMENT

This confidential Business Plan (the “Plan”) has been prepared by the management of The Company Telecom, Inc. and is being delivered to a select number of parties who may be interested in entering into an investment transaction (the “Transaction”) involving The Company Telecom, Inc. The sole purpose of the Plan is to assist the recipient in deciding whether to proceed with an in-depth investigation of the Company.

By accepting this document, the recipient agrees and acknowledges that all of the information herein, and all other information made available to the recipient in connection with any further investigation, is deemed to be proprietary and confidential information of the Company and that none of the information shall be used by the recipient, its employees or representatives in any manner other than in connection with its evaluation of the Company for the purpose of considering an investment in the Company. All inquiries regarding this opportunity should be forwarded to Michael xxx, Kevin DeWitt, as noted above.

This Plan contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe-harbor created by such sections. Such statements include, but are not limited to, statements related to (i) the Company’s operations, economic performance and financial condition, (ii) expansion of the Company’s business and operations, (iii) the hiring of additional personnel and (iv) an increase in the Company’s revenues. Forward-looking statements in this Plan include known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to vary from those stated in this Plan. Such factors include, among others: general economic and business conditions; changes in law regarding internet activities; competition; changes in business strategy; the indebtedness of the Company; quality of management, business abilities and judgment of the Company’s personnel; the availability, terms and deployment of capital; and other various factors referenced in this Plan. The forward-looking statements are made as of the date of this Plan, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

The Company and its management are available to respond to requests for additional information that investors may desire. The Company reserves the right to require the return of this Plan and its collateral information at any time. The Company reserves the right to terminate the entire offering at any time prior to closing, or to terminate participation by any party in its investigation or evaluation of a potential Transaction.

2001-2014, Veridian Financial, Inc. ALL RIGHTS RESERVED

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Investment Opportunity The Company Telecom, Inc. offers investors an opportunity to profit from the Company’s planned penetration of expanding global markets for last mile wireless broadband solutions and high bandwidth (1gbps) wireless infrastructure solutions. The Company is positioned to meet this increasing global market demand by delivering innovative and proprietary software applications, hardware, and services through a unique and proven business model.

The Company is now seeking its first round of external financing totaling $20 million from investors, in exchange for a 25% equity position. The Company will consider alternative proposals from prospective funding partners.

Company: The Company Telecom, Inc.

Location: xxx xxx xxx

Contact: Michael P. xxx

Capital Required: $20 Million

Product & Services Offering: Wireless broadband last mile connectivity providing the full compliment of applications, products and services and broadband infrastructure (backhaul) solutions

Product/Services Category: Telecommunications, Information Technology

Use of Proceeds: Deployment of infrastructure and delivery of services to initial markets in China and Asia.

Amount Percent Total Proceeds $20,000,000 100% Less Offering Costs $2,000,000 10% Net Proceeds $18,000,000 90%

Operating Expenses Marketing $1,000,000 6% Legal & Accounting $250,000 1% Fixed Assets $15,000,000 83% Working Capital $1,750,000 10% Total $18,000,000 100%

Website: www.xxx.com

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TTAABBLLEE ooff CCOONNTTEENNTTSS I. EExxeeccuuttiivvee SSuummmmaarryy........................................................................................ 5

The Company, The Company, History and Mission, Market Demand,

Overview of Products, Market Demand, Key Management,

The Investment Opportunity, Financial Overview

II. BBuussiinneessss PPllaann…................................................................................................. 10

Market Analysis…………………………………............................................... 10

Market Demand, Rapid Growth of Broadband, Market Segmentation,

Market Potential, Industry Trends

Product and Services Offering........................................................................... 19

Product and Advantages, Future

Competition ........................................................................................................... 29

SWOT Analysis

Business Strategy…......................................................................….…………… 34

Joint Venture in China, Competitive Strategy, Marketing Strategy,

Branding Strategy, Fiscal Objectives

Risk Management ................................................................................…………… 40

Financial Projections ............................................................................................ 45

Exit Strategy ........................................................................................................... 50

Conclusion .............................................................................................................. 50

Appendices Appendix 1 — Management Team..............................….......……………......... 51 Appendix 2 — Projected Financial Statements...........…..................................... 53 Appendix 3 — Detailed Expenditure Projections ......….................................… 55 Appendix 4 — Projected Capital Expenditures .......…........................................ 56 Appendix 5 — Key Platform Components……………. ………………………. 59 Appendix 6 — Application Descriptions……………… ………………………. 62 Appendix 7 — Selected Chinese Internet Market Data ………………………. 68

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EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

Setting the Stage Today’s global communications industry boasts tremendous long-haul capacity with significant and increasing demand for bandwidth from vast global markets. Unfortunately for high bandwidth consumers, “last mile” broadband infrastructure is largely unavailable to carry this data from the long-haul network to end-users (homes and businesses).

Telecommunications companies have invested heavily in fiber optic networks capable of carrying vast amounts of data (voice, Internet, video etc.) across the U.S., the world’s oceans and most of the developed world, but this fiber “pipe” is reduced to a trickle through voice-based copper wires and coaxial cable to most homes and business. Traditional and existing copper wires and coaxial cables connecting buildings to telephone and cable television systems do not provide the capacity necessary to carry advanced bandwidth-intensive services and applications, and optical-fiber “last mile” bridges needed to connect millions of users to the optical-fiber backbone are cost prohibitive (between $100,000 and $500,000 a mile). As a result, only 2 to 5 percent of the fiber network in the U.S. is currently utilized. This is a global problem and similar situations exist in most telecom markets.

With its proprietary technologies, industry and technical expertise, and access to developing markets, Management believes that The Company Telecom has unmatched opportunities to become a leading provider of the full spectrum of broadband products and services in a global market. By integrating the best-of-class standards-based technologies for cost containment, and certain critical proprietary advances to sustain an on-going leadership market position, The Company Telecom has developed turnkey wireless last mile and infrastructure solutions that can profitably deliver a full complement of broadband products and services at prices attractive to end users.

The Company Telecom is positioned to provide cost effective solutions in both industrialized nations and in the developing world. The Company’s wireless broadband solutions are suited for developed countries where high-speed data transmissions are “bottlenecked” at the end user level and also in developing countries where infrastructure may be spotty or nonexistent. The first large target market selected by the Company for these technologies is China and Asia. Management has considerable experience in China and Asia and believes there is vast and growing demand for these type services in these markets. The Company is in late stage negotiations for the deployment of its systems with large regional Telco’s, ISPs and carriers in Guangdong Province (China), Macau, and Hong Kong, among others.

The Company

Legal Structure Asia Pacific Telecom, Inc., (The Company Telecom), is a closely held Delaware C-corporation founded in the first quarter of 2002 to capitalize on Management’s advancing negotiations in China and exclusive rights to proprietary wireless broadband technology. The Company’s headquarters are located in The City, California, with a satellite office in Hong Kong.

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The Company Telecom is structured as a holding company that will hold certain intellectual property rights and interests in individual affiliate/subsidiary companies and joint ventures doing business in their respective geographic markets. The first of those affiliates, The Company 3G Ltd. (“The Company 3G”), a Hong Kong shell company, was organized by the Company in May 2002 to capitalize on markets in Hong Kong and Mainland China. The Company 3G has negotiated agreements with China Motion Netcom and the appropriate Chinese government agencies to introduce its broadband wireless systems in selected Chinese markets. Successful introduction is expected to lead to large-scale deployment of the Company’s broadband solutions in Mainland China. Additional negotiations are underway with China Telecom, CITCC, Jitong, China Unicom Guangtong Network, China RailCom and other fiber networks and carriers. Intellectual Property Assets The Company has obtained exclusive rights to intellectual property from 3rd Generation Communication Technologies, Inc. (“3GCT”), including an exclusive Mainland China license, first right of refusal for all of Asia and, exclusivity for any partner, city or country that The Company brings in that is not already in negotiations with 3GCT. The Company and 3GCT are currently negotiating terms for a merger/joint business operation that would provide the Company with global exclusivity. History and Mission for The Company Telecom, Inc. With a mission to become a leading provider of complete wireless broadband solutions to underserved markets in both the developed and developing world, The Company Telecom, Inc. has been developing key markets in Asia, cultivating a core team of seasoned managers and technical experts, and assembling key combinations of proprietary and leading commercial technologies. Through its affiliate Company in Hong Kong, in October of 2002 The Company successfully completed a controlled introduction (CID) of its broadband wireless solutions in the city of Shenzhen, Guangdong Province, China, with ongoing negotiations and planned introductions in the additional Chinese cities of Macao, Hong Kong, and other Asian markets. Based on the success of the controlled introduction, The Company has negotiated a contract with China Motion Netcom in Hong Kong providing for a division of equity, responsibilities and revenues pertaining to the provisioning and sales of wireless broadband solutions. The Company is currently awaiting approval of the finished contract from China Motion’s Board of Directors and approval of the proposed pricing structure by the appropriate authorities in Beijing. Market Demand The Company Telecom is positioned to meet the burgeoning global demand for broadband access with scalable wireless broadband infrastructure and last mile solutions that are cost effective in underserved markets in both developed and developing world markets.

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Global Internet Access The global online population is growing rapidly. Internet users will almost double to over one billion people in 2005, from over 580 million people currently and 407 million in December 2000, according to a report by Nua.com.1 China Represents a Major Portion of the Global Internet Market In June 2002, the number of Internet users in China reached 45.8 million, an increase of 72.8 percent since 2001, according to a report released by China Internet Network Information Center (CINIC). China’s 16.13 million computers linked to the Internet reflect an increase of 61 percent over the same period.2 According to the Yankee Group Report "Asia-Pacific Broadband Access: Market Review and Outlook," the Chinese broadband market will expand from the current 323,400 broadband subscribers to become a regional hub with an expected 19.2 million broadband subscribers by year-end 2006.”3 Growing Demand for Wireless Broadband in North America According to a recent report by Frost & Sullivan, the demand for high-speed wireless Internet connectivity has matured to a point where commercial deployment is a reality, with revenues surpassing $28.5 billion by 2007, climbing from $842.3 million in 2000.4 Overview of Product and Services Asia Pacific Telecom, Inc, (The Company) is a total solutions Wireless broadband infrastructure and last-mile systems integrator and provider with a broad variety of marketable services and applications. Utilizing an intelligent blend of standards-based and proprietary technologies referred to as 3GCT (Third Generation Communications Technologies), The Company provides cost-efficient carrier class packet based wireless backhaul, infrastructure and complete last mile solutions encompassing a full spectrum of applications, services and products available today, as well as those applications as yet unavailable due to lack of consumer bandwidth.

1 Author not available, 10% of the world's population now has Internet access. , Europemedia, 08-12-2002 2 Author not available, INTERNET USERS IN CHINA REACH 45.8 MILLION: CNNIC REPORT. Asia Info Services, 07-24-2002. 3 Yankee Group News Release, Asia-Pacific Broadband Powerhouse: China Is Finally in the Spotlight, August 19, 2002, http://www.yankeegroup.com/ 4 Author not available, WIRELESS BROADBAND PROVIDERS MUST BE INNOVATORS. , Tele-Service News, 05-01-2001.

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The Company’s services and applications include: • Internet access at speeds up to and over 3.2mbps per modem with aggregation or

dedicated QOS (quality of service), • Wireless Voice over Internet Protocol (VoIP) with carrier class domestic and

international call origination and termination, • High quality video teleconferencing over VoIP, VPN or Internet, • Virtual Private Network (VPN) services with numerous products and applications, • Digital broadband audio and video streaming and downloads, • Structured Video-on-Demand (VoD), and • Additional revenue generating applications and services.

Product advantages include:

• Proprietary technologies to ensure market leadership • Quick cost-efficient deployment, • Carrier class transmission quality, • Scalability with the capability to easily expand a network as the customer base grows,

and • A "one-stop" wireless solution for virtually all communications services.

Key Management The Company’s management team has broad and deep experience in telecommunications, electrical engineering, IT management, and international operations. They have successfully designed and implemented proprietary and commercial telecom and IT equipment, systems, international manufacturing operations, and marketing and distribution companies. Management’s experience and its international business relationships, combined with its technical expertise, have enabled The Company Telecom to successfully gain access in China where other companies have failed, as well as in other key Asian markets. (See BUSINESS PLAN for description of management.) The Investment Opportunity The Company Telecom, Inc. offers investors an opportunity to profit from the growing global demand for wireless broadband solutions. The Company is well positioned to meet this increasing market demand through a unique and proven business model. The Company is now seeking its Series A round of financing totaling $20 million from investors, in exchange for a 25% equity position. Preferred financing would be in the form of revenue participation certificates, equity financing or a combination of equity financing with debt financing in the form of convertible notes.

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Financial Overview The included financial projections factor investment capital sufficient to deploy Wireless ISP services in Shenzhen, Hong Kong, Beijing, Shanghai and Taipei (Taiwan). Each city/100,000 subscriber base system requires a relatively small overall investment, though debt may be utilized for subsequent deployments after the first city (or two) is operational. Management believes that debt; amortization and depreciation factors will positively affect the rate of return on equity and investment capital figures. Financing of the Customer Premise Equipment (CPEs) is possible and, should such financing be secured, first year revenues should result in a significantly more positive net income. After the 6-month trial and organizational period, the revenues reflect deployment of one new city within each 120 to 180-day period at a 5% penetration rate per annum (4.2% realized) into the existing ISP market. The Company believes to following Summary Pro Forma is conservative for the following reasons:

1. The Pro Forma does not factor any growth is the Chinese ISP market over the 5-year period thought the market is projected to grow 40%+ per year through 2005.

2. The Pro Forma factors revenues from ISP services only and does not reflect any additional revenue streams such as VoIP and teleconferencing, Mobile and VPN applications, geo-location applications, audio/video streaming and downloads, security applications including B2B applications, encrypted financial solutions such as wireless remote credit/debit card validation and check verification and other profit generating broadband infrastructure solutions etc. though all these services are immediately marketable off the base ISP system.

3. The Pro Forma does not factor cost savings from the financing of any equipment from sources such as Banks and vendors.

4. The Pro Forma does not factor cost savings from the manufacture of equipment though this could save well over 50% off initial deployment costs.

5. The Pro Forma does not factor any additional deployments in any other countries/cities though it is likely the Company will engage in other business operation during the 5-year period.

The following is a summary of projected income statement accounts for the initial 5-year period for the 5 Chinese cities of Hong Kong, Shenzhen, Beijing, Shanghai and Taipei:

SUMMARY FINANCIAL PRO FORMA

Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenues $46,311,226 $209,772,576 $395,152,992 $558,478,830 $741,420,030

Cost of Goods Sold $31,272,600 $83,183,520 $78,180,000 $71,925,600 $62,544,000

Operating Revenues $15,038,626 $126,589,056 $316,972,992 $486,553,230 $678,876,030

Total Operating Costs $10,134,897 $13,845,995 $17,807,696 $19,236,551 $20,837,259

Pretax Operating Income $4,903,729 $112,743,061 $299,165,296 $467,316,679 $658,038,771

Net Income (Loss) $3,187,424 $73,282,990 $194,457,442 $303,755,841 $427,725,201

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BBUUSSIINNEESSSS PPLLAANN MARKET ANALYSIS Market Demand Filling the “Last Mile” Infrastructure Gap Telecommunications companies have invested heavily in fiber optic networks capable of carrying vast amounts of data (voice, internet, video etc.) across the U.S., the world’s oceans and most of the developed world, but this fiber “pipe” is reduced to a trickle through voice-based copper wires and coaxial cable to most homes and business. Traditional and existing copper wires and coaxial cables connecting buildings to telephone and cable television systems do not and can not provide the capacity necessary to carry advanced bandwidth-intensive services and applications, and optical-fiber “last mile” bridges needed to connect millions of users to the optical-fiber backbone are cost prohibitive (between $100,000 and $500,000 a mile). As a result, only 2 to 5 percent of the fiber network in the U.S. is currently utilized. This is a global problem and similar situations exist in most telecom markets. The multibillion-dollar optical-fiber backbone that was built to bring truly high-performance multimedia services to office and home computers across the nation has come up a bit short--for nine out of 10 U.S. businesses with more than 100 workers, less than a mile short. Despite swelling user demand, the prospect of delay-free Web browsing and data library access, electronic commerce, streaming audio and video, video-on-demand, video teleconferencing, real-time medical imaging transfer, enterprise networking and work-sharing capabilities, as well as numerous business-to-business transactions, still lies just over the horizon--actually, buried under local streets and sidewalks. 5 The lack of viable cost-efficient last mile solutions is a significant contributing factor to the current slump in the telecommunications industry. Although various fiber-free data-transmission technologies, including microwave radio, digital subscriber lines and cable modems, are attempting to span the broadband connectivity gap, Management believes that no other current provider has viable technology that can provide the full spectrum of products and services available through The Company Telecom. The Company Telecom’s last mile solution integrates the best-of-class standards-based technologies for cost containment, and certain critical proprietary advances to sustain an ongoing leadership market position. With the ability to deliver the full spectrum of broadband applications to all consumers, The Company Telecom recognizes the last mile as the “payoff” mile. The Company Telecom is positioned to provide cost-effective, scalable wireless broadband solutions to underserved markets in both the developed and developing world markets. 5 Ibid

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Global Demand for Internet Bandwidth The percentage of the world’s population with Internet access has surpassed 10% to over 580 million people, an increase of over 173 million since December 2000. There are slightly more Europeans online at over 185 million than the almost 183 million in the US and Canada. The number of Internet users in the Asia/Pacific region has risen to over 167 million people. Over one billion people are projected to be online by the end of 2005.6 The Vast China Market With more than 45 million citizens now logging on, China is now the No. 3 user of the Internet in the world, behind only the U.S and Japan. Figures reported by the China Internet Network Information Center (CINIC) marked a continued trend of strong growth in Internet use among China's 1.26 billion people, with a 72 percent rise over last year. China’s 16 million computers linked to the Internet represent an increase of 61 percent over June 2001. Economic growth in China is historically unprecedented. According to a 1997 World Bank report, “If China’s 30 provinces were treated as independent data points (and most have populations of tens of millions of people), the twenty fastest growing units in the world over the last two decades would all be in China.”7 The Company has chosen Hong Kong as its launching platform for Chinese and Asian deployment based on the stability of its financial institutions, fair regulatory and trade policies, and recognition as an international financial and business center. The Heritage Foundation, a Washington based think tank, and The Wall Street Journal, which jointly issue the “Index of Economic Freedom”, have ranked Hong Kong the world’s freest economy for eight consecutive years.8 The average Chinese Internet user spends eight hours and 20 minutes online each week. China has strongly promoted the Internet's commercial potential to support its burgeoning economy and provide communications services and distance learning applications to remote interior regions.9 Rapid Growth in Broadband Even in developing countries where infrastructure remains spotty, network providers are deploying massive broadband networks, driven by the continued surge of Internet usage across Asia-Pacific. In addition to ADSL and cable modem services, industry dynamics are quickly turning the tide toward cost-effective broadband alternatives, namely optical Ethernet and fixed wireless access services.

6 Author not available, 10% of the world's population now have internet access. , Europemedia, 08-12-2002 7 http://www.worldbank.org/html/extdr/extme/jssp031798fn.htm 8 http://www.heritage.org/Research/TradeandForeignAid/WM58.cfm 9 Christopher Bodeen, Associated Press Writer, 45 million online: China claims third place among nations in Internet usage. , AP Worldstream, 07-23-2002

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According to the Yankee Group, the number of broadband subscribers in Asia-Pacific will swell to around 64.5 million by year-end 2006 from 12.9 million at the end of 2001. "Among the 13 economies, China clearly represents a market with huge potential. We expect the Chinese broadband market will expand from merely 323,400 broadband subscribers to become a regional hub topping the marketplace with an expected 19.2 million broadband subscribers by year-end 2006."10 Market Segmentation The Company has identified the following markets for its services:

Internet Service Providers, Telecommunication Providers and Systems Integrators

The Company Telecom’s comprehensive combination of technologies, products and services enable ISPs, competitive telecommunications providers, and telecom systems integrators to offer their customers turnkey broadband solutions. The Company’s wireless systems enable providers to cost effectively access customers that were previously unreachable through DSL, and to capture additional revenue streams through offering applications and services including VoIP (Voice over Internet Protocol), entertainment on demand, network roaming, teleconferencing, backhaul offerings, VPNs (Virtual Private Networks) including encrypted wireless financial transactions and more. In addition, The Company Telecom’s solutions offer unprecedented system monitoring, control, and customer service capabilities. The Company Telecom’s management team has focused its initial market development efforts on the large and growing Asian markets, with simultaneous ongoing negotiations in China, Macao, and Hong Kong. Subsequent efforts will target markets in other developing countries, as well as underserved markets in the U.S. and other developed countries, that well suited to wireless deployment. China Motion Netcom Service Ltd. The first of the Company’s international affiliates, The Company 3G Ltd. (“The Company 3G”), a Hong Kong shell company, was organized by the Company in May 2002 to serve markets in Hong Kong and Mainland China. The Company 3G has negotiated agreements with China Motion Netcom (www.chinamotion.com) and the appropriate Chinese government agencies to introduce its broadband wireless systems in selected Chinese markets. Successful introduction is expected to lead to large-scale deployment of the Company’s broadband solutions in Mainland China. The first city of deployment will be Shenzhen, Guangdong Province, PRC. Shenzhen is the most successful of China’s five Special Economic Zones (SEZ’s) and is located within sight of Hong Kong. Shenzhen boasts the highest per capita income of all Chinese cities and Guangdong Province is the most prosperous Province in all China. Since its designation as an SEZ in 1978, Shenzhen has grown from little more than a rice field to a population of over 4.3 million in 25 years and is also the site of a new port to handle the growing shipping demands of China as Victoria Harbor (Hong Kong) is now operating near capacity.

10 Yankee Group News Release, Asia-Pacific Broadband Powerhouse: China Is Finally in the Spotlight, August 19, 2002, http://www.yankeegroup.com/

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Shenzhen is a PRC “model” city demonstrating the effectiveness of reduced governmental policies to promote foreign trade and investment. Over the past two decades, Shenzhen has been the fastest growing city in China with average growth of its Gross Domestic Product (GDP) at 31.2%. In 1999, its GDP exceeded USD$17 billion with exports hitting USD$28.2 billion. Shenzhen is home to over 280 of the worlds top 500 multinational companies. There are over

1,500 factories producing computer and electronic parts and similar products in Shenzhen. Shenzhen is strongly linked to the capital of Guangdong Province in Guangzhou, which is the leading manufacturing city in Guangdong Province and one of the leading manufacturing cities in Mainland China. Guangzhou is within one hour of Hong Kong and Victoria Harbor, the port from which most of these products are exported. Guangzhou is the dominant manufacturing city in South China with numerous foreign investors, joint ventures and manufacturers. Shenzhen is where many of these manufacturers maintain representative offices for foreign trade, investment and participation. These two cities generate a significant amount of international call traffic, demand for ISP and other broadband services. Coupled with the international importance of Hong Kong and Macao, the Company believes Shenzhen and Hong Kong are the most logical and profitable targets for deployment of the The Company Telecom wireless technologies in Mainland China. One of only two Chinese companies with the ability to engage in international voice traffic, and with business operations covering Voice over IP, Internet Data Center, ISP, TMR system operation and maintenance, and wireless network communications, China Motion Netcom has grown into an influential telecom services provider in China. Along with the development of the telecom services market of China, the company has established close relations with major telecom operators in China, such as China Telecom, China Unicom and China Netcom. Currently, the company has a number of offices located in most major cities of China (including Hong Kong and Macao), Southeast Asia and North America.11 China Motion Netcom also has over 800 retail outlets to market its numerous products and services. China Telecom and Emerging Potential Chinese Telecom Customers The Company’s wireless broadband solutions offer cost effective expansion opportunities and competitive advantages to China Telecom and its emerging competitors. China Telecom officials witnessed the success of the controlled introduction of the The Company wireless technologies for China Motion, and have expressed interest in commencing negotiations with The Company 3G once the Company has demonstrated its capability in Shenzhen. As the incumbent telecommunications company in China, China Telecom faces increasing competitive

11 www.chinamotion.com

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pressure as the government encourages competition in its markets. China Telecom is currently focusing on new and enabling communications technologies to maintain market share while confronting increased competition from domestic and foreign players. With its longstanding relationships, familiarity with Chinese infrastructure and business practices, The Company Telecom is uniquely positioned to capitalize on the dynamics of this vast market. In addition to China Telecom and China Motion NetCom, The Company Telecom is currently cultivating business relationships with CITCC, Jitong, China Unicom and fiber optic networks Sinotel, China RailCom and Guangtong Networks. The Growing U.S. Market for Wireless Broadband The Company Telecom provides comprehensive broadband wireless solutions that enable ISPs in the U.S. to cost effectively reach underserved markets.

Attracted by low barriers to entry and high demand for broadband services, more than 30% of existing ISPs will begin offering broadband wireless access in 2002, according to a report by ISP-Market, LLC. ISP spending on fixed wireless equipment is projected to exceed $344 million in 2002.12 According to a recent report by high-tech market research firm In-Stat/MDR13:

• The licensed-exempt service for fixed wireless in the U.S. will grow three fold;

• By 2006 over two thirds of all wireless broadband subscriptions will be on a licensed-exempt system;

• Residential subscriptions to fixed wireless broadband in the U.S. will grow from

approximately 338K in the end of 2001 to 3.1 million by the end of 2006. Surging European Demand for Broadband Demand for broadband in Europe is predicted to drive growth in the number of broadband homes to 226 million by 2007, a 554 percent increase from year-end 2001. Residential broadband uptake in Q4 2001 increased 28 per cent to 34.5 million, demonstrating the immense demand for high-speed Internet. The inherent technical advantages of fixed wireless networks will enable them to capture a projected 7.8 percent of the European broadband market.14 The Company

12 Author unknown, ISP Spending on Fixed Wireless Equipment to Exceed $344 Million in 2002 according to ISP-Market LLC Research, March 4, 2002, Broadband Wireless Exchange Magazine, http://www.bbwexchange.com/news/2002/feb/ispmarket030402.htm 13 In-Stat MDR Market Alert, May 22, 2002, The Momentum of 802.11 to Salvage Fixed Wireless Market 14 Author not available, Demand for broadband to surge over next 5 years, Europemedia, 05-23-2002.

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Telecom’s technology platform is designed to interface in a “plug and play” format and is well suited as a wireless broadband solution for European markets. Growth in Wireless Broadband Services in Latin America Increasing demand in Latin America is further affirmation that wireless broadband services are a cost effective means of expanding coverage and meeting demand in developing and economically challenged markets. Latin American markets, with significant infrastructure problems and inadequate capital to install expensive fiber infrastructure, offer the Company significant opportunities to deliver wireless infrastructure solutions in the 1Gbps range, backhaul solutions to circumvent existing bottlenecks as well as tremendous demand for carrier class VoIP voice applications and last mile products and services. The Company Telecom Management’s growth plans include expansion into Latin American markets in the near future. Management is already in preliminary negotiations with key partners in Mexico and Brazil According to a recent study by Strategis Group, the long-anticipated growth in fixed wireless broadband services in Latin America is underway, with fixed wireless systems positioned to capture a significant market share in spite of the daunting economic recession facing the region. The Strategis Group forecasts that service revenues for fixed wireless broadband offerings will approach $2.4 billion (USD) by 2006. "Across Latin America the current trend is for companies acquiring fixed wireless licenses to complement their current network coverage, and broaden their service portfolio to offer voice and data," says Jose F. Otero, senior consultant with The Strategis Group. "Fixed wireless technologies continue to be attractive in this economic downturn, as these solutions allow carriers to expand coverage reach while minimizing deployment costs."15 While incumbent mobile and fixed line operators are currently originating most of the activity in the region's fixed wireless market, the inherent cost-control quality of the technology is enabling new competitors to enter the market as well. Advantages of deploying fixed wireless networks include quick deployment, high transmission quality, and the capability to expand a network as the customer base grows. Fixed wireless technology will allow carriers to become "one-stop" providers for all communications services for their clients. Initial Focus: Selected Asian Markets For strategic planning purposes, The Company Telecom has focused on selected Asian markets, in which Management has been cultivating business relationships for over two years. The financial projections assume an average annual realized market penetration rate of 4.2% into the existing Internet markets of five Chinese cities (Shenzhen, Hong Kong, Shanghai, Beijing and Taipei, total existing subscriber base 12,598,333) over a 5-year period. At the end of 5 years, the projections assume a total of 21.3% of the current market penetration or a total of 2,684,188 subscribers into these five cities. There is a great deal of analysis and market research (including statistics presented in this document) that project accelerated growth in Internet and broadband

15 Author unknown, The Strategis Group Sees Rising Demand in Latin America for Fixed Wireless Broadband Services, April 10, 2001, Broadband Wireless Exchange Magazine, http://www.bbwexchange.com/news/2002/apr/strategis041002.htm

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usage in China, which would decrease the Company’s actual market share percentage of the total future market but also may result in an increase of total subscribership and revenues.

Shenzhen/Guangdong Province, China With a population of over 4.3 million people concentrated in just over 20 square kilometers, Shenzhen is geographically and strategically well suited as The Company Telecom’s entry point into China. Shenzhen is the first city carrying out China’s opening-up policy. The most successful of the 5 Special Economic Zones in China, Shenzhen is a major port serving foreign trade and international associations in China. Shenzhen is situated 160 kilometers away from Guangzhou, 35 kilometers from Hong Kong and Jiulong, with neighboring areas

including Hunan, Jiangxi, Fujian, and Hainan provinces; Guangxi Zhuang Autonomous Region, Hong Kong and Macau.16 Once operations have been established in Shenzhen by or before the second quarter of 2003, the Company plans to expand into additional key markets in Guangdong province, with a population of over 86 million.17 Based on its penetration of a leading Province in economic and technological advances in China, The Company Telecom is well positioned to capture significant market share of the Chinese broadband market and is positioned to become the largest foreign player in the Chinese communications industry. Macau The city of Macau is built on a peninsula that leads to the Zhuhai and Zhongshan areas of China. The total population is estimated at approximately 455,000 with about 95% of the population Chinese and 5% Portuguese, Europeans and from other regions. In accordance with the Joint Luso-Chinese Declaration, China resumed sovereignty over Macau on December 20, 1999 and the territory has become a Special Administrative Region much similar to Hong Kong.18 The Chinese government has formally agreed that, under its "one country, two systems" formula, China's socialist economic system will not be practiced in Macau and that Macau will enjoy a high degree of autonomy in all matters except foreign and defense affairs. According to Macau’s Statistics and Census Service estimates, Macau had approximately 34,403 Internet subscribers in 2001, up over 25% from 2000.19 Macao is a gaming and resort destination for Japanese, Hong

16 http://www.travelchinaguide.com/cityguides/guangdong/shenzhen/index.htm 17 http://english.peopledaily.com.cn/data/province/guangdong.html 18 AsiaTravel.com, http://www.asiatravel.com/macau/macauinf.html 19 http://www.dsec.gov.mo/html/English/

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Kong and Chinese visitors. The main markets in Macao are casinos, financial centers and hotels. By cultivating business relationships with the leaders in ISP services in Macau, The Company Telecom is positioned to capture a significant share of this rapidly growing market for numerous applications and services. Market Potential Growing Global Demand for Broadband

Demand for broadband is growing globally, and wireless solutions are being deployed at an increasing rate around the world. Global broadband access service revenues are expected to increase from $93.4 billion in 2002 to $229.7 billion in 2008, according to a recent market & technology assessment report by Pioneer Consulting.20 Increasing ISP Demand for Wireless Solutions A recent study of early adopter service providers deploying broadband wireless access (BWA) by Sage Research reveals very high stated satisfaction with the technology's reliability.21 According to Chris Neal, a research director at Sage Research, "Most surprising is that we found an unexpected number of service providers already using BWA technology, despite its relative newness to the market….” and “BWA still represents a small niche in broadband access, and in fact is most often used as a secondary technology to support traditional leased lines or ADSL (Asymmetric Digital Subscriber Line). But nearly a third of our survey respondents use BWA technology at some point in their networks, proving that there is opportunity for BWA technology providers."22

Industry Trends The broadband wireless industry is in the late early adopter phase of its life cycle, thus experiencing rapid growth. Long-term volume growth is projected to grow from $93.4 billion in 2002 to $229.7 billion in 200823, largely reflecting increasing acceptance by service providers, availability to

consumers, and increased availability of broadband content. Management believes that The Company is uniquely positioned to capture a significant share of the global wireless broadband market. 20 Pioneer Consulting, Broadband Access 2002, An Assessment of Global Demand for Broadband Access, by Technology and Geographic Region, http://www.pioneerconsulting.com 21 Sage Research, "Broadband Wireless Access Perceptions and Reality," http://www.sageresearch.com/ 22 Author unknown, Service Providers Reveal Broadband Wireless Access Deployment Barriers in Sage Research Study, July 22, 2002, Broadband Wireless Exchange Magazine, http://www.bbwexchange.com/news/2002/jul/sage072302.asp 23 Pioneer Consulting, Broadband Access 2002, An Assessment of Global Demand for Broadband Access, by Technology and Geographic Region, http://www.pioneerconsulting.com

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Despite the contraction in capital markets and the downturn in investment in technology in general, wireless technologies are attracting significant capital funding. In its 2002 Wireless Venture Capital Report, Growthink24 identified 349 wireless companies that received $5.3 billion in venture capital investments in 2001 from more than 600 investors.

• SHOW SAMPLING OF COMPANIES AND ACQUIRED FUNDING AND NOT TOO FLATTERING DESCRIPTION THE PRODUCT(S) OR SERVICE(S).

• Fly-by-Night (FBN) Wireless secured 67m funding from Cisco, Intel, Tandy. FBN

provides aggregated LOS Internet services to commercial users at speeds starting at 512kbps and pricing starting at $299.00 per mo. plus $500.00 for CPE.

• Yadda yadda yadda • Another one • Ought to be enough now.

PRODUCTS AND SERVICES

The Company Telecom has a complete, fully developed hardware and software solution for the deployment and delivery of a distinguished suite of wireless broadband applications and services. The Company Telecom has exclusive marketing rights for solutions that are comprised of a highly cost effective combination of best of breed commercial and proprietary, patented technologies. The Company Telecom had identified opportunities to capture recurring revenue streams in markets with high and growing demand for broadband Internet and other services. Management has cultivated business relationships with key decision makers in selected markets in Asia, with plans to further expand into additional global markets as resources permit. The market for wireless broadband equipment and services is expected to continue to grow at an increasing rate until saturation is achieved. Saturation is likely to occur first in urban markets in highly developed nations, with rural markets in developing nations likely to be last to acquire broadband access. Growth rates for wireless broadband may actually be greater in markets in where existing infrastructure does not support “wired” broadband access, such as the initial markets being pursued by The Company Telecom. The Company Telecom plans to grow rapidly by forming joint ventures and other business cooperations between its international affiliates/subsidiaries and in-country partners that have proven access to key markets. The Company is currently deploying the first of those ventures in selected Asian markets with its Hong Kong affiliate, The Company 3G Ltd. 24 Growthink, 2002 Wireless Venture Capital Report, http://www.growthinkresearch.com

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The Company’s business model utilizes partnerships with in-country communications providers and provides proprietary technologies for a share of the ongoing revenue stream. Management believes this strategy will ensure long-term profits not available through the traditional sale of equipment, hardware and software. The Company will support its partners with ongoing R&D and provide the results of such development to each partnership to ensure technological and market dominance. Product Advantages The Company Telecom’s quality of service-dedicated wireless Internet connection is the basis for a full suite of services including video teleconferencing, streaming media, VPN applications, geo-location applications, security applications and VoIP applications. Since a wireless Internet connection is “always on”, implementation of highly profitable wireless Voice over Internet Protocol (VoIP) services are immediately planned. Scheduled deployments include call origination and call termination anywhere in the world for fractions of a cent with IP to IP call types, at extremely cost-efficient and competitive levels with IP to analog termination. The Company Telecom is confident that its solution for carrier-grade VoIP across the Public Internet, last mile QoS (quality of service), plus VoIP enhancement technologies, coupled with an extraordinary demand in certain areas, creates a compelling ROI case for near-carrier grade telephony in communities lacking adequate communications infrastructure. The Public Internet based VoIP application is very much in demand and the need in third world and developing countries where infrastructure may be spotty, outdated or even non-existent is profound. In China alone, over 800 million people do not have, and cannot get, landline telephone service. The Company is pursuing opportunities for significant growth and revenues in the VoIP market alone. Through The Company’s installed gateways, the Company can significantly limit the number of “hops” associated with traditional VoIP telephony and provide a very marketable carrier class voice call with latency factors approximating mobile (cellular) voice communications. Additional Revenue Opportunities While the included financial projections include the deployment of wireless ISP services in targeted Asian markets, other revenue streams have not been included at this time. This is one of the reasons The Company feels the financial projections are conservative. The Company Telecom’s solutions enable other significant revenue streams, including:

• The “killer application” of a wireless 4G mobile IP “packet” based communications from a handheld unit that includes interchangeable SIMM card for multi country/multi network interface, seamless IP to cellular integration for functionality in The Company undeveloped locations, MPEG capabilities, expansion slots for memory and data (Flash),

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detachable plug in fold-up or membrane keyboard, color display option, built in camera, speaker and microphone for video teleconferencing, hot swappable easy change long life battery, IR direct connect, USB data link in a device designed to sit upright on a small stand while attached to the keyboard to provide monitor/computer functionality and also enable stable video teleconferencing.

• Wireless VoIP with call originations from home or business to Public Switched Telephone Networks (PSTN), PSTN to mobile, mobile to PSTN, video teleconferencing and low cost international originations and terminations that can be billed down to per second increments.

• Wireless VPN applications with secured point-to-point video and data transmissions, secured and encrypted military and governmental communications, B2B applications including aggregated database retrieval for banking institutions to check credit, verify account balances and transfer of funds, wireless Automated Teller Machines with wireless credit/debit card and check verification services, secure E-commerce transactions and private video teleconferencing – VoIP over VPN.

• Wireless cost-efficient Geo-Location services that establish a GPS location without a GPS system for location and tracking of automobiles (auto/vehicle theft) and equipment location, people (children) location, emergency vehicles (ambulance, fire, police), shipping containers and freight movers etc. Also applicable for sensing reservoir levels, sewage blocks, available parking stalls in multi-level garages as well as other government and military applications.

• Wireless security applications such as wireless streaming video for military, government, commercial and professional businesses, schools, retail centers, construction sites, malls, police, medical, traffic control and customs over VPN or public Internet. Remote computer and network monitoring including break-in alert and video monitoring for home, business and governmental security including passive sensors (open door, weight sensors) and motion sensors with the ability to call any designated phone number or numbers instantly. Monitoring can be achieved over VPN or public Internet. Smart Home applications including full remote equipment monitoring and activation for energy (monitor, on/off) air conditioning, heating, electrical, water, computers and equipment (monitor on/off), seismic sensors with programmed response, construction site monitoring, firewall and data traffic filtering etc. Wireless monitoring and transmissions equipment can be hardwired for electrical or operate on solar with battery backup.

• Wireless Streaming media for movies, sports events, broadcasts with custom news and sports search capabilities with a browser. Media can be live streamed, downloaded or purchased and burned to a CD or disc.

• Wireless communications infrastructure applications for point-to-point wireless backhaul at 1gbps (667 T1/500 E1 lines) with 25-mile range (soon 80-mile range). Fiber sized backhaul applications where fiber does not exist and can be installed much faster at significantly less cost, used to circumvent bottlenecks, reduce traffic on existing lines and increase infrastructure capacity. Backhaul can be used as an aggregator for all forms of data traffic such as aggregating existing DSL lines for third parties. Extra bandwidth can be resold to third parties.

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The The Company Telecom Wireless Broadband Solution: A Technical Discussion

General Description The The Company Telecom wireless broadband solution is designed to enable the Company and its partners to rapidly deploy cost-effective, high-speed data connections directly to business and residential subscribers and/or install wireless fiber sized infrastructure solutions. The Company’s systems are deployed in packet based, frequency hopping spread spectrum point-to-multipoint applications at the frequencies licensed for these applications and consist of a wireless hub, which serves as a point of convergence for data traffic in a network, network management system software and wireless subscriber modems. (See Appendices 5, 6, and 7) Each wireless hub is located at a base station, which houses the components in the network. The The Company Telecom network management system manages traffic over the network and optimizes how quickly and efficiently the system operates by allocating and dedicating bandwidth. The Company Telecom wireless modems are installed at multiple subscriber locations with variable modem capabilities of up to 3.2mbps. Modem bandwidth can be remotely increased/decreased according to end user requirements.

• Point-to-multipoint wireless hubs are located in base stations and send and receive data traffic to and from wireless subscriber modems at high speeds. The The Company Telecom network management system tracks customer usage and billing and manages and controls the traffic transmitted over the Company’s broadband wireless system.

• The Company Telecom wireless modems are connected to PCs or wireless local area networks (WANS) located in residences, multi-tenant buildings small/home offices, and businesses. These modems send and receive data traffic and provide access to the Internet. The base ISP system provides the foundation for a full suite of additional revenue generating products and services.

• The Company Telecom’s wireless hub interfaces with a router located in the base station that sends data traffic to the Internet and is designed to also send voice traffic over the Internet or to the gateway that connects with the public telephone network, as needed.

• System integrators, including The Company Telecom, and service providers add additional network equipment, such as antennae to transmit wireless radio frequency signals, to complete the network infrastructure.

The The Company Telecom system enables service providers to maximize the number of simultaneous subscribers on their networks. Using the The Company Telecom point-to-multipoint system, service providers can roll out network services quickly and cost effectively. They can then expand their networks by adding wireless hubs and subscriber wireless modems as the number of subscribers grows. The Company Telecom solutions are designed to operate in the primary frequency bands for broadband data services in the United States and other countries as well as the unlicensed bands. These solutions operate on all frequencies from 1.0GHz to 20GHz.

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With proprietary equipment and software unavailable through any other vendor, the The Company Telecom wireless broadband technology is currently capable of non-line-of-sight (NLOS) RF propagation utilizing 7 separate air interfaces:

802.11B 802.11A 802.11G 802.11E 802.11.16 MMDS OFDM

These multiple interfaces can operate on overall frequencies from 1.0ghz up to 20ghz with seamless integration for Wireless ISP (WISP). The The Company Telecom technologies are universally compatible and can be seamlessly overlaid on CDMA, TDMA, GSM, GPRS and UMTS for rapid and economical global deployment. The Company Telecom also contains built in integration with Bluetooth, X10, Push and Clipping (PDA) technologies granting seamless 4G (4th Generation) attributes. The The Company Telecom technologies are scalable for system expansion and configured to interface in a “plug-and-play” format into any existing infrastructure located anywhere in the world. These technologies were designed to be globally compatible and universally deployable. For developing countries where a substantial portion of the communications infrastructure is antiquated and/or nonexistent, The Company Telecom provides optical fiber sized wireless infrastructure and backhaul solutions in the 1-gigabyte range that effectively mitigates bottleneck and infrastructure problems and can provide infrastructure solutions where high bandwidth infrastructure is lacking or nonexistent. Specific Technical Advantages of the The Company Telecom Wireless Broadband Network The Company Telecom’s system is designed for optimal performance and efficiency. Specific features include:

• System integration capability • Provides the ability to quickly integrate the The Company Telecom

system with any existing system or infrastructure.

• RADIUS AAA • The Company Telecom uses remote authentication dial-in user service,

an authentication and accounting system that requires a username and password to be passed to a RADIUS server, which checks that the information is correct, and then authorizes access to the ISP system.

• The Company Telecom uses an authentication, authorization and accounting (AAA) system for IP (Internet Protocol) based networking to control what computer resources system users have access to and to keep track of the activity of users and billings over the The Company Telecom network.

• Location Validation

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• By applying AAA with physical MAC (Media Access Control) address and link subnet, The Company Telecom hardware uniquely identifies each node of a network.

• ISP DNS

• The Company Telecom’s system links to the Domain Name System (or Service), an Internet service that translates domain names into IP addresses.

• DHCP

• The Company Telecom systems use Dynamic Host Configuration Protocol (DHCP) for assigning dynamic IP addresses to devices on its wireless networks.

• With dynamic addressing, The Company Telecom devices can have a different IP address every time they connect to the network. The Company Telecom’s DHCP also supports a mix of static and dynamic IP addresses.

• The Company Telecom’s dynamic addressing simplifies network administration because the software keeps track of IP addresses rather than requiring an administrator to manage the task. This means that a new computer can be added to a network without manually assigning it a unique IP address.

• Defined CIR

• The The Company Telecom system enables providers to offer a Committed Information Rate specifying the amount of guaranteed bandwidth (measured in bits per second) on their service.

• Guaranteed specific QOS

• The Company Telecom systems enable providers to guarantee a specific quality of service and data rate per user and that end-to-end latency will not exceed a specified level.

• Multi-air interface integration

• The Company Telecom’s system enables providers to interface to any and all wireless protocols including CDMA, TDMA, GPRS, GSM and UMTS.

• The ability to interface with wireless protocols enables service providers and carriers the ability to cost effectively implement The Company Telecom systems utilizing their existing infrastructure.

• FHSS (Frequency Hopping Spread Spectrum) point-to-multipoint at 2.4 GHZ (or

other), with the ability to change frequency to any nearby licensed range (e.g., 2.5, 2.6-2.9 GHz)

• The Company Telecom systems utilize frequency-hopping spread spectrum, a transmission technology where the data signal is modulated with a narrowband carrier signal that "hops" in a random but predictable

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sequence from frequency to frequency as a function of time over a wide band of frequencies. The signal energy is spread in time domain rather than chopping each bit into small pieces in the frequency domain.

• This technique reduces interference because a signal from a narrowband system will only affect the spread spectrum signal if both are transmitting at the same frequency at the same time.

• The Company Telecom’s FHSS methodology also provides exceptional data security.

• • OFDM backhaul at 5.8 GHz.

• The Company Telecom systems utilize Orthogonal Frequency Division Multiplexing (OFDM), a technique for transmitting large amounts of digital data over a radio signal split into multiple smaller sub-signals that are then transmitted simultaneously at different frequencies to the receiver. By using OFDM, The Company Telecom dramatically reduces the amount of electromagnetic interference in signal transmissions.

• Specific API integration capability

• The Company Telecom systems are readily integrated with application program interfaces - sets of routines, protocols, and tools for building software applications.

• The Company Telecom’s systems are backed up with OEM (original equipment

manufacturer) agreements with all suppliers: • providing 40-50% discounts • source code access for custom APIs. • This access provides in-country interface adaptability of The Company

Telecom's systems with partner's systems.

• Mesh Networking. • The Company Telecom employs a unique mesh network approach to

provide key benefits including: • Modest capital expenditure requirement for cost effective

deployment with sparse building coverage. • Ubiquitous coverage areas in dense, high-traffic hot spots,

with low capital expenditure requirements and rapid install time.

• Devices are connected with many redundant interconnections between network nodes and allow stable connectivity at

mobile speeds up to 240mph. • The Company Telecom’s proprietary wireless financial ATM system solutions for

financial clearinghouses. • Allows highly portable, fast installation of wireless Automatic Teller

Machines (ATM) and wireless credit/debit card and remote check verification terminals.

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• Faster modulation via packet density packing across any radio technology (highly proprietary).

• This is a technique for increasing the data rate across a radio channel, independent of the modulation method.

• Attractive in-country business model for partnering and local China manufacturing.

• The Company Telecom has developed contacts with Chinese

manufactures that will result in significant savings on equipment and deployment costs.

• Plans are in place to build circuit boards in Taiwan. • Final assembly and deployment facilities are in place in China. • Separation of manufacturing and assembly operations ensures protection

of proprietary technologies. •

• Geo-location capability. • Prototype has proven patented non-GPS technology that provides: • Geographic location in the presence of multiple access points or wireless

routers, to track and detect motion and location of another wireless device, such as wireless client adaptor and a PDA, or other special purpose Wi-Fi device.

• The Company’s geo-location capability was demonstrated at China Motion's YuHua building, 4th floor, where GPS signals were non-existent.

Future Products Voice over Internet Opportunities Since The Company Telecom’s QoS-dedicated wireless Internet connection is “always on”, highly profitable wireless Voice over Internet Protocol (VoIP) services are planned for immediate implementation. A user can originate a call and The Company Telecom can terminate a call anywhere in the world for fractions of a cent with IP to IP call types, at extremely competitive and cost efficient levels with IP to analog termination. While some may debate the merits of carrier-grade VoIP across the Public Internet, The Company Telecom’s installed gateways, last mile QoS, plus VoIP enhancement technology, coupled with extraordinary demand in certain areas, creates a compelling ROI case for near-carrier grade telephony in communities without any communications and those seeking more cost-efficient communications. The Public Internet based VoIP application is very much in demand in third world and developing countries where infrastructure may be spotty, outdated or even nonexistent. In China alone, over 800 million people do not have, and cannot get, a landline telephone service. The Company plans to capture significant revenue streams from this market alone. All VoIP calls can be billed in per second increments.

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Entertainment Applications After a baseline wireless infrastructure is in place for a given area, other profitable isochronous data25 application services are possible and planned to each home and business, such as:

• intranetwork distribution of Blockbuster-like video of digital quality • using multiple target formats including MPEG1 (for wireless PDAs at

street-café levels), MPEG2, MPEG4, or Microsoft Media 9+ theatre-grade video streams or FTP downloads,

• secured by U.S. DOD-approved AES cryptography, Verisign digital certificate keys and public-private key based digital rights management of downloaded files.

• “Killer” applications like structured near Video-on-Demand from an archive of thousands of video or music titles are planned,

• Along with VCR functionality such as the ability to pause, repeat, fast-forward and rewind from a wireless-based set top box or popular PC-based multimedia players.

• Video clip advertisement insertion can also be used to localize news content, broadcast special events/emergencies, and to add advertisement revenue.

• Video content can be either pre-recorded, or live, based on local community requirements.

Additional Mobile Data Opportunities The Company Telecom technology provides opportunities to capitalize on additional market opportunities including:

• 4G IP (fourth generation internet protocol) based Mobile communications applications with the ability to access the Internet, send/receive e-mails, view streaming media, video teleconferencing etc. at minimum data transfer rates of 600 kbps (kilobits per second).

• video teleconferencing, • international Business-to Business (B2B) applications, • mobile applications including high speed Internet access, • paging services, • web hosting services, • Application Service Provider (ASP) capabilities, • Application Programming Interface (API), • Virtual Private Network (VPN) solutions, • wireless Automated Transaction Machines (ATM) solutions and

encrypted financial transaction solutions, • wireless remote credit card and check verification services, • commercial and residential wireless security solutions, • auto theft and other security solutions,

25 defined as corresponding significant instants of two or more sequential signals that have a constant phase relationship; source: http://www.atis.org/tg2k/_isochronous.html

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• including geo-location capability without using a GPS signal. • The geo-location capability works with, and is based on,

communications with neighboring access point signals with numerous marketable applications including the equipment/auto theft, container, shipping and distributing industries.

• Smart Home applications, • real-time medical imaging, monitoring and diagnostic applications, • remote utility and meter/monitoring applications including remote monitoring of oil wells

for the oilfield industry, • governmental, emergency and military applications, and • a host of other services and applications in numerous fields and industries are possible –

all profit generating.

Wireless Infrastructure and Backhaul

For developing countries where a substantial portion of the communications infrastructure is antiquated and/or nonexistent, The Company Telecom provides fiber sized wireless infrastructure and backhaul26 solutions in the 1-gigabyte range that effectively mitigates bottleneck and infrastructure problems. The revenue stream derived from backhaul solutions alone could potentially exceed the projected ISP revenues as the network is developed and accounts are cultivated. Financial Data Transmission

The Company Telecom’s proprietary wireless financial ATM system solution is ideal for financial clearinghouses, enabling highly portable, fast installation of Automatic Teller Machines and the secure transmission of real time financial data. There is high global demand for secure wireless financial data solutions. In China, ever increasing online trade has resulted in a strong demand for online banking services. A rush by the major Chinese banks to establish Internet banking is largely being undertaken to improve competitiveness against foreign banks and make capital investments in new services that will ultimately derive savings. Industrial and Commercial Bank of China reported RMB 3.14 trillion in turnover in its e-banking businesses in the first 11 months of last year.27 In China, the existing banking system requires personal identification or company “Chop” identification format for transaction activities. Currently, any check drawn on a bank must also be cashed at that specific bank. Pursuant to a request by the Bank of China, The Company Telecom has recently made a Proposal to the bank to install a VPN system that will allow immediate verification of account funds and transfer of funds to allow check cashing at any and

26 Backhaul is a term used to mean getting large amounts of data to a point from which it can be distributed over a network, or sending network data over an out-of-the-way route (including taking it farther than its destination) in order to get the data there sooner or because it costs less. Source: http://whatis.techtarget.com/definition/0,,sid9_gci211630,00.html 27 Author not available, AN IMPENDING KEEN COMPETITION IN CHINESE ONLINE BANKING MARKET, Date: 05-14-2002; AsiaInfo Services

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all participating banks. The Company Telecom also proposed additional complimentary products and services, including proprietary wireless ATM machine applications with wireless remote credit/debit card and check verification services for retail centers, restaurants and other point of purchase venues.

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COMPETITIVE ANALYSIS Although The Company Telecom competes for revenues from service providers, telecommunications companies, systems integrators, and direct competitors in the wireless broadband marketplace, Management believes the Company is positioned to capture significant share of its fast-growing target markets, and

that the Company’s products, proprietary technologies, market knowledge, and business approach provide competitive advantages that position it strongly against direct and indirect competition from substitutes such as DSL, Cable, Satellite, Wireless and fiber to curb. Through competitive pricing, positioning of product lines, guaranteed Quality of Service, and ability to provide service to underserved markets, The Company Telecom is very confident of its competitive position. The Company believes it holds sustainable competitive advantages with respect to direct and indirect competition including: DSL: DSL services are aggregated services that originate from a Telco’s central office (CO). Average upload/download speeds of DSL are approximately 45 kbps [kilo (thousand) bits per second], in contrast to The Company’s guaranteed rates of up to 3.2 Mbps [mega (million) bits per second] per wireless modem. There may be many users sharing the same DSL line which means the more users on the same line the slower the speeds for all, much like 56k dial up. This is called “aggregation”. Because DSL services are aggregated, those users closest to the CO obtain the fastest speeds while those at a greater distance experience progressively slower speeds as more users log on – though all users pay the same price for the service. The Company’s ISP service can be provided on an aggregated basis at speeds faster than DSL or The Company can provide guaranteed and dedicated QOS (Quality of Service) with consistent quality throughout the network. QOS and dedicated transfer rates are unavailable with DSL due to its aggregated basis. The Company technology easily facilitates guaranteed quality of service and data transfer rates. Due to deteriorating quality at greater distances, DSL services are only marketable in approximately a 3000’ radius from the CO.. The Company technology provides full coverage in all areas and enables service to areas that are lacking in infrastructure necessary for competing technologies. DSL’s circular range translates into holes and gaps even in a developed market where DSL services are simply not available. In many newer communities, the “economically” installed copper wire simply does not allow for a DSL implementation of any kind. The business/commercial market has embraced DSL somewhat, but the vast majority of residences and consumers simply have not considered the quality and speed of DSL services to be cost-efficient enough to upgrade from the existing 56k dialup service in areas where DSL service is available. Cable: Cable broadband connections can be fast with speeds up to 1.5 Mbps, but these services are aggregated also with no QOS available. Like DSL, as the number of users on a given line increase, the quality of service declines and cable lines can support many more users than a DSL line resulting in significant aggregation and slowed speeds. Not only can The Company systems be deployed where no cable is available, but customers can also choose from many more capabilities, applications, features and services, and guaranteed levels of service. The quality of

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a cable connection is also dependant on the quality of the cable infrastructure. Upstream connections to older infrastructure can significantly impact speeds and quality to downstream users even if the infrastructure is new. Any line of transmission is only as good and as fast as its weakest point. Satellite: Satellite services, while available in many areas that still don’t offer cable or DSL, satellite services are again aggregated and comparatively expensive, both for the required equipment and the recurring charges. Satellite users often complain of Web surfing latency (delay) issues due to the time required for a request to reach the satellite and return to the land-based Internet server, as well as interruptions in service due to weather conditions. This latency factor renders VoIP applications unmarketable and video streaming applications are often of poor and unmarketable quality. The Company is positioned to compete effectively against satellite service with guaranteed (higher) service levels, and lower cost structure due to low cost CPEs (customer premise equipment) and cost-effective infrastructure. Optical Fiber/Fiber to curb: Although in-building optical fiber is the ideal delivery system for high bandwidth applications to end users, the cost factor of installing curbside optical fiber is prohibitive for most providers and end users, with revenues rarely supportive of such expense. Last mile optical fiber is simply not feasibly under current market conditions. Wireless: Management believes that broadband wireless is, and over time shall be demonstrated to be, the only viable solution to deliver many of the broadband products and services available with today’s technology. In the wireless industry, new players and technologies are emerging at a rapid pace. Many companies can deliver high speed Internet access but that is often their sole product and the delivery means is either limited, expensive or both. Some companies can deliver wireless VoIP but again, this is usually their sole product. Most companies have only one or two air interfaces. Since the Company is a technology and systems integrator and also develops its own proprietary technologies, the Company believes is has the only viable technology currently on the market and ready for deployment that utilizes 7 different air interfaces over the entire 1.0ghz to 20ghz spectrum that can provide broadband QOS connectivity to all end users and deliver virtually all marketable applications, products and services in demand today. We have identified no other company that demonstrates it can deliver the full compliment of these products and services as well as infrastructure/backhaul applications as can The Company Telecom. The Company Telecom also offers full deployment and training services for partners, network monitoring services, operating system and billing software/services, marketing services and complete product/technology support services with ongoing R&D to enable the Company and partners to maintain a market and competitive edge. The Company Telecom targets specific markets in which its system is demonstrably the optimal solution and promotes its product as a total broadband hardware and software solution, which makes the total cost of implementation and operation more competitive and a more differentiating feature of the solution. The Company utilizes an intelligent blend of standards-based and proprietary technologies and has developed firmware/software to integrate these technologies to provide a total solution for nearly all communications services, which it deems

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most cost effective and appropriate for specific market and customer needs. This includes the use of components from companies described herein as competitors. The Company Telecom is primarily engaged in the business of manufacturing, marketing, implementing, and maintaining high-speed wireless broadband access equipment and software solutions designed and configured to deliver a full compliment of available products, services and applications. Most of our competitors are substantially larger and have greater financial, technical, marketing, distribution, customer support, and other resources, in addition to having greater name recognition and access to customers than we have. Competitors in the wireless market include Vyyo, Alvarion (the merged entity of BreezeCOM Ltd and Floware Wireless Systems Ltd.), Hybrid Networks, Inc., AirSpan, Wi-Lan, Netro, and new-market entrants including, among others, Navini and IPWireless. In addition, well-capitalized companies such as Alcatel, Marconi and other vendors have, in some cases, internally developed products. While there are numerous competitors in the wireless broadband market, revenues are somewhat concentrated among a relatively small number of companies. According to a report from Strategies Unlimited, fifteen companies account for nearly 75% of the $93 billion global market for wireless equipment. The fifteen include industry stalwarts Ericsson, Motorola, Alcatel, and Nokia; manufacturers of wireless-enabling integrated circuits Texas Instruments, Agere Systems, Intersil, and Intel; developers of enabling software Qualcomm (CDMA) and Sun Microsystems (the Java programming language); leaders in wireless LANs Atheros and Cisco; key players in broadband wireless equipment Alvarion and Ensemble Communications; and consumer electronics giant Sony Corporation (cellular handsets). 28 Management believes that, with the exception of Cisco, Sun and Alcatel who now are developing wireless hardware/software for WAN’s utilizing primarily an 802.11B and 802.11A interface, most wireless broadband companies concentrate on cellular applications over a circuit based infrastructure. The Company Telecom utilizes a packetized IP based wireless medium that connects directly to fiber optic, and hence does not suffer from any of the inherent limitations of circuit-based systems. The Company utilizes it’s own proprietary technologies and other licensed technologies to bypass all current and existing infrastructures to deliver the full host of products and services with a direct fiber connection, where fiber exists, or its own wireless infrastructure where infrastructure is lacking. Participants in the wireless broadband access market and industry have not yet settled on a technology standard for equipment to serve this market. Major impediments to standardization include the fact that most members of the various industry consortia have vested interests in their embedded base already in existence, and the perception that new wireless technologies can be considered “disruptive” to systems currently being employed. Our major competitors have created or joined in consortia to promote the technology they are employing as the industry standard, which may be different from our underlying technology. However, the R&D team of 28 Author unknown, Strategies Unlimited Analyzes Fifteen Companies That Are Defining Our Wireless Future, June 24, 2002, Broadband Wireless Exchange Magazine, http://www.bbwexchange.com/news/2002/jun/strategiesunlimited062402.asp

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The Company Telecom was instrumental in the final design of CDMA and other wireless standards and their combined industry experience serves to allow a logical prediction of what new wireless standards will ultimately be agreed upon. Much of the The Company system operates on software that can be remotely upgraded as these wireless standards are announced and adopted. This allows The Company to develop and deploy technologies and equipment with a high degree of conformity with expected standards and the ability to remotely upgrade software as these standards are released. The most significant issue affecting the Company, with regard to standards, is our 4G Mobile IP phone. The company believes it can produce a Mobile phone and Internet capable computing device cost efficiently enough and close enough to evolving industry standards (within 90%+) that profits generated from an early deployment will effectively mitigate the costs of additional R&D and manufacturing to make previously sold units conform to new and differing standards. Regardless of these costs, if any, there is a significant benefit in being one of the first providers of these services and garnering significant market share prior to the emergence of other competitors who may chose to wait for issuance of these standards prior to market entry. To mitigate the risk of our competitive position becoming impaired and/or requiring significant R&D/manufacturing costs to bring deployed technologies up to standards, The Company utilizes technologies that are highly adaptable to standards currently under consideration. The Company Telecom customers are likely to compete with providers of other forms of high-speed Internet access, including DSL and cable. Telephone companies are deploying DSL, providing high-speed Internet access over existing phone wires. They are working with computer vendors to install DSL cards in PCs manufactured by those companies, thereby reducing the telephone companies' distribution costs. DSL and cable pose a competitive threat to the services offered by our customers, in markets where those services are readily available, however it is the Company’s belief that the QOS, host of services and applications and enhanced speeds currently unavailable through DSL and Cable will enable the company to effectively compete in these developed markets. To facilitate market entry, The Company Telecom is initially focused on markets where infrastructure constraints make the Company’s wireless technology solution a highly cost effective means of providing broadband services while exploring the viability of introductions into developed markets subject to proper market research and market analysis. The Company believes that the speeds, QOS and host of other services provided by The Company Telecom will effectively mitigate competitiveness from DSL and cable. Further, the The Company telecom technologies can serve as support system to cable and DSL users and also as an adjunct and/or a broadband replacement to existing Wireless LANs while utilizing existing PCMCIA cards, APIs (application programming interfaces) and APs (access points) while delivering Internet speeds and QOS unavailable from aggregated DSL and other providers. To ensure rapid growth, The Company Telecom plans to focus on target markets where alternatives are not readily available or are less cost effective, and where the Company’s solutions provide a cost effective means to meet demand for broadband services. In such a case where fiber exists to end users in a large segment of a community, the Company would simply market its variety of products and services to the existing cable company to serve as an adjunct to its existing services.

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The market for broadband wireless access systems is competitive, rapidly evolving and subject to rapid technological change. The Company Management believes the Company’s products and services are state-of-the-art in the principal competitive factors in this market:

• product performance (quality, speed) and features (quantity); • price of competitive products; • reliability and stability of operations; • ability to develop and easily implement new services and technologies; • ability to readily scale a system to support additional users and/or

applications • ability to support newly allocated frequencies; • ability to utilize multiple air interfaces as a delivery means within

designated spectrums; • competitive cost efficiency on total system costs and quick ROI; • ability to provide system integration services efficiently and cost

effectively; and • sales capability, technical support and service.

The Company Telecom Management is confident that the innovative features, adaptability, comprehensiveness, and cost effectiveness of its wireless broadband solutions position the Company very strongly against its competitors.

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SWOT ANALYSIS

SWOT ANALYSIS Strengths Weaknesses

• Innovative and strong product development capabilities with proven developers

• No evident competitive technologies • Manufacturing capabilities to control quality

of product and costs/profits • A strong and leadership oriented

management team with a proven ability to work together and execute important decisions

• Proprietary and patented components • Ability to identify best technologies for

implementation • Efficient operational prototype • Small company with highly creative and

innovative staff can develop, introduce and deliver new products to the market faster than larger companies

• Scalable business model

• Early stage operations • Initial Marketing Presence Limited in

Geographic Scope • Lack of Dedicated Business Development

Staff

Opportunities Threats • Significant opportunities for merger

and/or acquisition by many larger conglomerates

• Worldwide growth market • High profit products and services • Multiple potential revenue streams

• Mergers and acquisitions creating industry giants with significant market share present moderate to significant barriers to entry.

• Resource scarcity – Possibility of inadequate funding to build out infrastructure.

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BUSINESS STRATEGY The Company has identified the following key success drivers for the industry and has developed their business strategy to fully develop and deploy these

factors as key competitive advantages:

• Non-Line-of-Sight capability (NLOS) • Quality of Service (QoS ) • Guaranteed dedicated data rates • Full compliment of marketable services and applications • Ease-of-installation and easy scalability for additional subscribers and

applications • Complete partner network services including OS and/or OS interface • Cost effective solutions to meet all industry/market demands • Carrier class voice support (VoIP) • Packet based IP functionality with the ability to add circuit mode • Mobility • 4G IP based mobile phone Internet and computing device with data

transfer speeds unobtainable through current 3G circuit based systems • Proven R&D capabilities to ensure a technological edge • Manufacturing capabilities to control quality and minimize costs • 1gbps wireless backhaul and infrastructure solutions • Proprietary technologies with ability to integrate other technologies

Asia Pacific Telecom, Inc (The Company) utilizes an intelligent blend of standards-based and proprietary technologies to provide complete broadband connectivity to homes and businesses. These broadband solutions encompass the full spectrum of marketable applications and services as described herein and in the attached Executive Summary. There is demonstrable pent up global demand for these technologies and the first deployment of these technologies will be in China and Hong Kong. The Company Telecom, through its Hong Kong affiliate The Company 3G, is positioned to potentially become the largest foreign player in the Chinese communications industry. Although this business plan discusses deployment of these technologies in other countries as well, only revenues derived from the Chinese Internet market are factored into the attached pro forma projections. Overview of Business Strategy The Company Telecom plans to market, deploy and maintain wireless broadband networks in select markets with joint venture partners, customers including ISPs, telecommunications companies (Telco’s), and resellers including systems integrators and VARs. The Company’s initial focus is on selected markets in Asia, in which Management has longstanding business relationships. The largest of these markets is China.

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Joint Ventures in China

China was formally invited into the World Trade Organization (WTO) on November 11, 2001. China’s WTO membership was formally ratified and China became the 143rd nation to join the WTO on December 11, 2001. Because foreign companies are not yet permitted to hold majority ownership interests in telecommunication businesses in China, own broadcast rights or majority holdings in communications licenses in China (29limited to 49% foreign ownership in 2002 and raised to 50% in 2003), The Company Telecom plans to operate largely by two methods in China:

1. The Company Telecom, through its Hong Kong based affiliate, The Company 3G, Ltd. is in the process of entering into joint ventures with Chinese government approved joint venture partners and contracts for related projects in Hong Kong. Some of the Company’s planned joint venture partners are municipally or provincially owned broadband networks with access to fiber optic cable systems. The Company 3G’s Chinese partners provide Internet access services to and receive Internet access fees from their customers. The Company’s planned joint ventures will provide, install and maintain the equipment that our Chinese partners' customers require and receive installation fees and monthly maintenance fees from such customers as well as a significant share of profits. Through the broadband networks developed and implemented with the Company’s assistance, the Company’s Chinese partners intend to provide Internet access that is more reliable and faster than Chinese subscribers can obtain through dial up access or ADSL over currently existing telephone lines. The Company plans to share in ongoing revenues from the ensuing broadband services.

2. The Company Telecom, through its Hong Kong based affiliate, The Company 3G, Ltd., plans to assist subscribers in target markets in China with developing turnkey solutions to modify their existing Internet systems so they are broadband capable. In addition, The Company 3G, Ltd. will provide technical services to affiliated joint ventures and third parties. The Company 3G, Ltd. will provide a range of value added services to companies, directly or through strategic alliances with an appropriate service provider, from which significant recurring revenue streams are expected.

3. Pursuant to a request by the Bank of China, The Company Telecom has recently submitted a Proposal to provide VPN applications and wireless financial solutions. The Company has submitted an additional Proposal to unify the banks and financial institutions in Shenzhen, PRC to create a model financial center for consideration by Beijing of mass deployment to connect all banks in China through it’s existing fiber network. The Company also proposed that the Company would provide tracking and maintenance for a credit database of all its

29 Source Telecommunications Industry Association (TIA). Contact eheinema@tia.eia.org and US Information Technology Office www.usito.org

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customers as well as all bank customers, to create the first large credit-reporting agency in China. The Company and the Bank of China would jointly own this credit-reporting database.

4. Pursuant to request, The Company Telecom has already submitted a Proposal to the oil industry in China to provide VPN services, private communications services and wireless remote well monitoring services.

5. The Company is currently in negotiations with the fire department in the Guangdong capital city of Guangzhou to install a VPN and private communications network to provide a coordinated emergency response mechanism where none currently exists.

6. The Company Telecom, through its Hong Kong based affiliate, The Company 3G, Ltd., plans to immediately enter into broadband wireless business and opportunities in Hong Kong itself. The Company has identified significant market demand for these services at prices that exceed minimum revenue projections. The Company is currently in negotiations with the Hong Kong Port Authority for VoIP services to incoming ships and carriers within 25 miles of shore. (Current IP prices for these ships exceed USD $8.00per minute.) The Company is also bidding on a WAN system for the new Hong Kong convention center and is negotiating with several hotels, parking garages and the University for deployment and installation of wireless and geo-location services.

7. The Company Telecom is currently in negotiations to provide wireless local area networks (WANS) and geo-location services to numerous Hong Kong companies including the new Hong Kong Convention and Exhibit center, the Port Authority, numerous Hotels and parking facilities and numerous commercial and professional buildings.

8. The Company Telecom is also in negotiations with Hutchison Whampoa/Hutchison 3G (Telco), PCCW (Telco and mobile operator) and Tom.com (ISP) to provide complete wireless last mile and infrastructure solutions covering Hong Kong and Macau with also the possibility of partnering with one or more of these entities in Ireland, Australia, the UK and portions of Europe.

China currently has an online population of approximately 45 million people, most using slow and expensive dial-up systems. The Company Telecom’s Management believes that China's entry into the World Trade Organization and the government's commitment to expanding the use of the Internet will support the rapidly growing demand for broadband Internet service. Entry into China through Guangdong Province Of China’s estimated 45 million Internet users, demographic figures from China Internet Network Information Center (CINIC) indicate that over 3.5 million are in Guangdong Province where the Company’s joint venture with China Motion is planned. Once the second largest paging company in China, China Motion is reinventing itself as a wireless broadband provider for growth in new markets. China Motion has about 100,000 cell phone customers in its home market of Guangdong. Most of China Motions’ services are in south and east China with about

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800 retail outlets. China Motion is located in the city of Shenzhen, in Guangdong Province. Its main shareholders include Hong Kong and Mainland companies. China Motion is traded on the Hong Kong and Singapore exchanges. Subsequent Penetration of Additional Asian Markets The Company’s current relationships and the status of its negotiations indicate that it will likely commence operations first in Hong Kong by end of 2002 and in Shenzhen by the second quarter of 2003, with additional Chinese and Asian cities being sequentially deployed over the next five years. For the purposes of its current pro forma projections, the Company plans staggered deployments resulting in an average 5% per annum penetration rate into the existing Internet markets of five Chinese cities (Shenzhen, Hong Kong, Shanghai, Beijing and Taipei, total existing subscriber base 12,598,333) over a 5-year period. Based on numerous factors including pent-up demand and lack of local infrastructure to support viable and cost effective alternatives, Management believes this strategy and its associated projections to be justified and conservative. Entry into Additional Global Markets For the purposes of this plan, only initial Asian markets have been projected, and only revenue streams from broadband ISP services. Management is confident that the Company will have numerous opportunities to enter additional regional and international markets and to capture additional revenue streams as described earlier. Potential markets for the Company’s solutions exist on every continent and negotiations with other Asian cities and countries are underway. Statistics indicate and management believes the global demand for broadband services will continue to grow in the foreseeable future.

Competitive Strategy Management understands the importance of knowing precisely what the market demands and opportunities are, but also exactly who their competitors are and where they pose the largest threat. Through numerous resources the Company constantly monitors developing technologies, conducts ongoing internal and

external audits to identify where the business is most vulnerable to competition, which of their markets are in danger of overcrowding and which offer new opportunities. The Company Telecom, Inc. will employ the following strategies to capture market share and ensure continuing revenue growth:

Product Positioning The Company Telecom will differentiate its products by developing and positioning them for the growing wireless broadband market. New product innovations will be designed into the Company’s product line as they become available to maintain competitive technical advantage in the Company’s target market sector. Initially, the Company intends to enter markets where no competitive technology or company exists to ensure significant market share and profits.

Creating a Strong Brand Identity Through Co-Branding Alliances Management recognizes that a strong, quality oriented brand identity can be the single most valuable asset on the balance sheet. To achieve this end, the Company will seek co-branding and brand extension agreements with joint venture partners and manufacturers

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with strong brand identities as a way of enhancing the Company’s brand image, where such strategies will facilitate entry into regional markets or build brand identity within industry trade groups. The Company has begun negotiations with SamSung to produce the 4G Mobile IP phone.

Ongoing Monitoring of Competitive and Industry Trends

The Company Telecom plans to continually devote capital and resources toward market information systems and to gathering and analyzing market intelligence. The Company Telecom Management carefully monitors key market trends, indicators and the moves made by competitors. Through the R&D team, management believes it can maintain a technological advantage and competitive strength over other providers. Management further believes it can spot niches and trends in the market and utilize its development and manufacturing capabilities to strategically enter new markets and keep technologies and services current, competitive and marketable. If a given market shifts or a new market opens up, the R&D team has the proven ability to develop a prototype in as little as six weeks and have a finished product ready for manufacture in as little as six months.

“Best Practices” Benchmarking”

Management conducts ongoing marketing intelligence activities to identify the common traits and best practices of successful rapid growth companies within this industry as well as evaluations of where and why technology companies experience difficulties. By effectively benchmarking these traits and practices, the company can realize substantial competitive advantages and avoid the common mistakes made in early and growth stage companies. Common traits identified by management include:

• A scalable business model and infrastructure that fits with current customer demand patterns but can evolve as the market embraces the Company’s products and services and future demand patterns increase. The Company Telecom will monitor and enhance demand and ensure that infrastructure and capacity are in place to handle the demand that has been generated.

• Recognizable product innovation with an eye towards continually improving functionality, adapting to market conditions and providing profit opportunities for the Company and its partners.

• Compelling and clearly articulated vision and strong company culture that creates a genuine culture of teamwork and a collaborative, empowering workplace environment that avoids excessive internal politics and focuses employees to compete externally rather than internally. The Company utilizes an organizational technology with an employee compensation program that rewards productivity and innovation. The Company also offers a percent of profits to the developers of new technologies.

• Think big but act small – The Company Telecom Management understands the advantages of being nimble, paying attention to detail and adapting quickly to changes in demand, trends, or market conditions. The Company can and will leverage its small company advantage to capture market share by quickly developing, introducing and delivering new

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products to the market that meet current customer demands and infuse this flexibility and small company mindset into its culture and infrastructure even as the Company continues to grow.

Superior Customer Service

The The Company Telecom Management team employs a customer-centric focus on business strategy by identifying and then exceeding customer needs. Management is also acutely aware of the societal and cultural nuances of its target markets, and believes its ability to recognize and observe proper protocols while devoting significant attention to in country relationships gives the Company a distinct competitive advantage in foreign territories. The Company will work through its in-country partners and dedicate capital and resources to identifying, measuring and improving customer satisfaction levels through ongoing customer satisfaction surveys and inexpensive online customer focus groups. Further, the Company constantly seeks out individuals and groups known for honest business practices whom demonstrate significant business acumen with cultivated relationships in targeted countries.

Development of strategic alliances

Management understands that strategic alliances are an essential driver of superior growth and that building valuable relationships helps to level the playing field in competing against larger companies. The Company Telecom plans to continue its alliance intensive strategy to earn a higher return on equity and to achieve a higher market valuation. To position the Company as an attractive alliance partner, The Company Telecom will build advantaged alliance management capabilities; create the target alliance portfolio and implement alliance partnership initiatives in the following identified markets:

1. ISPs 2. Telecommunications Providers 3. Systems Integrators 4. Hardware manufacturers 5. Software developers 6. Industry Trade Groups and Shows 7. Government Agencies

Marketing Strategy The Company Telecom, Inc. will employ the following marketing and sales strategies to develop and grow their current client base:

Marketing – Direct Contact with Joint Venture Partners, ISPs, Telecommunications Providers, and

Systems Integrators

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The Company Telecom is currently in various levels of negotiation with several prospective customers and/or joint venture partners in Asia and other countries.

Targeted Advertising with Joint Venture Partners in their respective markets The Company plans to reach prospective customers in the markets of its joint ventures through the use of targeted advertising. Primary targets are affluent commercial districts for ISP services with subsequent marketing of VPN, teleconferencing and other appropriate products and services to existing and new clientele. Marketing efforts will initially focus on those qualified businesses/markets that demonstrate the need for the product and the ability to pay. Subsequent marketing efforts will scale down from this market as services are sold and more ubiquitous forms of media promotions will be utilized.

Promotions to raise awareness of broadband capability and availability in target markets The Company Telecom will work with its joint venture partners and customers, resellers, and licensees to promote awareness of the capability and availability of the Company’s solutions through various culturally sensitive promotions appropriate for the respective market. In China, The Company Telecom intends to provide broadband services to educational institutions with highly developed distance learning applications on a cost or cost-plus basis to position The Company as a culturally friendly and socially responsible business enterprise. The Company has already begun negotiations with organizations with proven distance learning applications and technologies to include as a base application in each deployed system. Through these type activities and other philanthropic endeavors, The Company recognizes it is good business to be a culturally sensitive business partner and maintain a friendly and supportive relationship with in-country businesses and governments.

Publicity to raise awareness of broadband capability and availability in target markets The Company Telecom will work with its joint venture partners and customers, resellers, and licensees to generate publicity that will promote awareness of the capability and availability of the Company’s solutions. As an example, Management plans an annual audit of the Company’s security systems where “hackers” in each country will be invited to attempt to hack into the The Company Telecom encryption and security system, with immediate and specific mitigation measures to ensure system safety.

Trade shows to build brand and raise awareness among Joint Venture Partners, ISPs, Telecommunications Providers, and Systems Integrators The Company Telecom plans to cultivate international business relationships, build its brand name and raise awareness of the Company’s solutions by selectively participating in international trade shows that draw prospective joint venture partners, customers, resellers, and licensees in the Company’s target markets.

Operations Product fulfillment and delivery

The Company has established its own framework to manufacture its own products and has developed relationships with leading manufacturers and software developers to ensure adequate and timely delivery of necessary components of The Company Telecom solutions. Customer service/support

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The Company Telecom is dedicated to the highest standards in customer service and support. The Company plans 24 hour, 7 days per week support for its global customers and joint venture partners. Further, the Company plans to deploy technical teams to all major installations to ensure quality control on the front end and prevent subsequent technical difficulties. Each country will have its own Network Operations Center (NOC) to monitor in-country operations as well as the central NOC in the US to monitor all NOC’s worldwide. Necessary replacement equipment will always be readily available as well as full redundancy measures.

Manufacturing facilities and location

The Company Telecom has identified manufacturing partners for key and proprietary components that will assure the highest quality standards. Key components will be manufactured and assembled in different locations by different and distinct manufacturing entities for additional protection of intellectual property. Manufacturing of selected components is expected to result in cost savings of 50% to 800% on key components.

RISK MANAGEMENT

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The occurrence of any of the following risks could materially and adversely affect the success of The Company Telecom, Inc. Management has identified mitigation strategies to meet these risks.

Sales Cycle Risks The sales cycle for our products is sometimes lengthy, and may be subject to a number of significant risks, including our customers' capital budget constraints and the processing time for an application for the use of licensed radio frequencies submitted to governmental regulatory agencies. Any delay or loss of an order that is expected in a quarter can have a major effect on our sales and operating results for that quarter. The same is true of any failure of a customer to pay for products on a timely basis.

Mitigation Strategy

Management believes it is mitigating these risks by cultivating joint ventures with fiscally healthy joint venture partners that may be backed by the associated governmental agencies who already have spectrum licenses or who will obtain proper licensing prior to initial deployment(s), and by delivering products that operate in unlicensed frequencies or frequencies sanctioned by the local government. Further, the Company is targeting markets for which there is government support for meeting demand for enhanced broadband communications capabilities, thereby ameliorating the lengthy sales cycle. Management has also abbreviated the sales cycle in its initial markets by investing years of relationship building with the appropriate joint venture partners and government officials. In China specifically, all services including installation fees and monthly connectivity fees are paid in advance (prepaid) and serve as a credit against future use. If/when the customers account nears depletion a friendly reminder is e-mailed to the customer and a flash page comes up upon Internet access reminding the customer to

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deposit monies. If the account is depleted, the network system automatically restricts additional service access from that account.

Competitive Risks The market for high-speed network connectivity products and services is highly competitive. On-going factors affecting our business include:

o A slow adoption rate of fixed broadband wireless (FBBW) systems by service providers. Systems operators have been cautious in their approach to the fixed broadband wireless market and they have been slow to make significant capital investments.

Mitigation Strategy Current research and industry expenditures indicate increasing and widespread acceptance of wireless broadband as a solution for markets where infrastructure constraints limit the deployment of older, wired methodologies, and project billions of dollars in market expansion. Management believes that its cost effective combination of leading edge commercial products and proprietary technologies, coupled with the ability to overlay its solutions with existing infrastructure, position the Company for rapid growth within a growth market. Management believes the industry’s lack of competing technologies and the reluctance of providers to quickly embrace wireless technologies grants the Company a unique window of opportunity.

o Constant technology change and the development of new product features. New competitors have entered and will enter the fixed broadband wireless market with new products and claims of improved functionality, new features, and different technologies.

Mitigation Strategy The Company Telecom Management believes its cost effective blend of leading edge commercial products and proprietary technologies, coupled with the ability to overlay its solutions with existing infrastructure, give the Company a technological advantage, cost advantage, and greater deployment capabilities over current competition. With the significant development capabilities of the The Company Telecom R&D team and the Company’s willingness to embrace and incorporate new technologies, Management is confident the Company can maintain a competitive position and advantage over other wireless providers and technologies. Management plans to maintain these competitive advantages by continually improving its products and responding to customer needs and feedback from actual deployments.

o Evolving industry standards. The fixed broadband wireless industry has yet to adopt industry standards and this has the potential to cause an adverse affect on equipment sales and earnings.

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Mitigation Strategy The Company Telecom plans to monitor and actively participate in standards committees affecting the fixed broadband wireless industry. Further, specific members of the R&D team have developed a significant portion of the wireless technologies these standards must incorporate and utilize. The Company believes that while evolving standards pose a threat to certain competitors that may have overly committed to an uncertain standard, the flexibility of The Company Telecom solutions technology to be adapted to emerging standards, the ability to remotely upgrade software and the ability to predict with a high degree of accuracy what these standards logically must be will provide the Company a distinct competitive advantage.

o The wireless industry competes with other technologies, including cable and digital subscriber lines to provide high-speed Internet access. The cable modem and digital subscriber line technologies avoid the principal disadvantage of most wireless systems, which requires some line-of-sight between the wireless operator's antenna and the customer's location.

Mitigation Strategy The Company Telecom has developed wireless broadband delivery solutions that are highly cost effective and demonstrably better when compared to competing technologies. The company may utilize line-of-site (LOS) for point-to-point high bandwidth infrastructure, but utilizes non line-of-site (NLOS) for all end users other than those with unusually high bandwidth requirements. The Company’s ability design and engineer a system to deliver user defined bandwidths and QoS to virtually any customer in a deployment area provides key competitive technological and business model advantages. In addition, the Company plans to initially focus on target markets with pent up demand where infrastructure does not support the widespread deployment of competing “wired” technologies.

o International sales may be subject to a number of risks, including longer payment cycles, export and import restrictions, foreign regulatory requirements, greater difficulty in accounts receivable collection, potentially adverse tax consequences, greater exposure to political and economic instability and reduced intellectual property protection. Mitigation Strategy The Company Telecom Management believes it is mitigating international business risks by cultivating relationships with the appropriate governmental agencies and joint venture partners that are favored by governmental policies. In addition, the Company sells its products directly to, and through, international subsidiaries that comply with local government policies. Further, the company shall purchase political risk insurance form entities like the Export Import Bank (ExIm) and the Overseas Private Investment Corporation (OPIC) to protect invested capital. In this manner, Management believes transfer pricing, licensing and service revenues will more readily allow the flow of funds and capital management.

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o We rely on a combination of patent, trade secret, copyright and trademark laws

and contractual restrictions to establish and protect our intellectual property rights. We cannot assure that our patents will cover all the aspects of our technology that require patent protection or that our patents will not be challenged or invalidated, or that the claims allowed in our patents may not be of sufficient scope or strength to provide meaningful protection or commercial advantage to us.

Mitigation Strategy The Company is acutely aware of the value and need for protection of intellectual property and believes its strategy of diligent containment of individual proprietary components will adequately protect its intellectual property. Further, there are certain safeguards pre-installed in each system as well as software code that makes theft of intellectual property and/or reverse engineering of hardware/software extremely difficult. The Company will initially select countries that support intellectual property rights and immediately file patents in all countries of deployment. If necessary, The Company Telecom will enter patent infringement lawsuits to enforce its rights.

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FINANCIAL PROJECTIONS Venture Capital flowing into Wireless Industry

Despite volatile and bearish capital markets and a general downturn in technology and telecommunications investing, investors are currently demonstrating their optimism regarding wireless broadband delivery with their increasing investments in this industry. In a recent report, Growthink identified 349 wireless companies that received a total of $5.3 billion in venture capital investments from more than 600 investors in 2001.30 The Company genuinely believes that its technologies and business model coupled with global demand for broadband connectivity provide a compelling investment vehicle for investors. Management Discussion of Pro forma Projections

The included financial projections factor investment capital sufficient to deploy Wireless ISP services in Shenzhen, Hong Kong, Beijing, Shanghai and Taipei (Taiwan). Each city/100,000 subscriber base system requires a relatively small overall investment, though debt may be utilized for subsequent deployments after the first city (or two) is operational. Debt, amortization and depreciation factors will positively affect the above figures. Financing of the Customer Premise Equipment (CPE’s) is possible and, should such financing be secured, first year revenues should result in a more positive net income. After the 6-month trial and organizational period, the revenues reflect deployment of one new city within each 120 to 180-day period at a 5% penetration rate per annum into the existing ISP market. The company believes the following financial Pro Formas are conservative for the following reasons: The Pro Forma does not factor any additional growth in the Chinese ISP market over the 5-year period, thought the market is projected to more than double in 2005. The Pro Forma does not factor any type of financing however, the Company has an established relationship with the Export Import Bank (ExIm) whereby ExIm will loan significant monies for international deployments on very favorable terms. Typically, the Company escrows 25% of the loan amount and ExIm finances the other 75%. This will allow sufficient capital for significant growth with minimal investor monies at risk. Political risk insurance is also purchased for each deployment that protects the initial investment capital but does not protect profits. Financing of deployment costs should result in a more positive net income than shown. The Pro Forma does not factor any revenue stream other than ISP services although each system is capable of supporting numerous other applications and services such as VoIP, Mobile and VPN applications including B2B applications, geo-location services, encrypted financial solutions such as wireless remote credit card validation and check verification and other profit

30 Growthink, 2002 Wireless Venture Capital Report, http://www.growthinkresearch.com

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generating broadband infrastructure solutions are not factored herein. Technology licensing fees and deployments in other cities and other countries/markets are not factored herein.

Management believes the pro forma projections accurately portray the Company’s opportunity to capture significant revenue streams and high rates of return through the deployment of its wireless broadband solutions. The attached Pro Forma reflects the following data:

1. Demographic and marketing data is gleaned from several industry sources including BDA, IDC, Telecommunications Industry Union (TIU), Telecommunications Industry Association (TIA), AC Nielsen Net Ratings, China Internet Network Information Center (CINIC), in-country market analysis etc. CINIC provides an in-depth semi-annual report on the Chinese Internet market including full demographic profiling. According to CINIC, as of December 31, 2001 the total Chinese ISP subscribership was 45,800,000. As of the second quarter of 2002, Nielson Net Ratings reports the total Chinese subscribership to be 56,600,000. All major market research firms project 100,000,000 Chinese Internet subscribers by the end of 2005.

2. These assumptions do not factor any additional growth in a market that is projected to increase 40% + per year through 2005. The Pro Forma factors the existing ISP market of 5 cities only with 12,598,333 current subscribers throughout the projections. (E-commerce grew at a rate of 165.1% in 2001.)

3. The Company competes only with similar last mile broadband (infrastructure) providers,

which, in China, is primarily aggregated Digital Subscriber Line (DSL) and 56k dialup. The demand for this service is strong since there exists no comparable broadband technologies in China and upload/download speeds are beyond compare to existing deployed technologies beginning at 21x faster than 56k dialup and average 3x faster than ADSL. A competitive analysis of China indicates only aggregated ADSL and the potential of Internet access via satellite and coaxial cable (WebTV) to be competitive factors.

4. The Pro Forma does not factor any additional deployments in other countries, although it

is reasonable to expect The Company will be deploying services in other countries within the 5-year projection period, as the current demand for these broadband technologies in other countries is quite high.

5. The Pro Forma does not factor equipment cost savings derived from the manufacture of

equipment in China. This should result in a deployment cost savings (CapX) of 30% to 50% or more.

6. The Pro Forma factors a tax base of 35% (US) although the rate in China for a Foreign

Invested Telecommunications Enterprise (FITE) is 16% with the potential of a time limited 0% tax base for the importation of certain new high technologies.

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The costs of deployments are shown as paid from an initial capital investment of $20,000,000 with subsequent capital expenditure costs paid from revenues. The Company has already established a relationship with the Export Import Bank (ExIm) for funding whereby ExIm will loan 75% of an amount that the Company escrows 25% for. The nature of the industry and the business model is such that it generates significant amounts of cash.

Initial investment capital should be sufficient to properly deploy according to schedule and market demand while concurrently seeking institutional financing for additional deployments. Subsequent deployments may be financed and amortized pending commitment of suitable financing. Ideal investment amount is approximately $20M to allow for the acquisition and operation of manufacturing facilities. Financial Pro Forma The Company expects to generate over $3 in profits on revenues of $46 at the end of year 1. Year 2 revenues are expected to increase substantially to $209 million. The projected net margin of 58% for year 2 will result in earnings of over $73 million. Beyond the current funding round, additional capital injections, if any, will be utilized strictly for expansion purposes, including development of additional revenue streams. The Company will be an attractive candidate for a sale, acquisition, or merger to a larger strategic partner within 24 to 48 months. Five-year financial projections are shown below:

5-Yr. Income Statement Projections Year 1 Year 2 Year 3 Year 4 Year 5

Residential Subscriptions $9,147,060 $54,679,092 $105,191,190 $166,171,590 $227,151,990

Business Subscriptions $16,464,708 $94,519,620 $215,768,982 $318,114,420 $440,075,220

Residential Activation $5,793,138 $15,854,904 $18,294,120 $18,294,120 $18,294,120

Business Activation $14,906,320 $44,718,960 $55,898,700 $55,898,700 $55,898,700

Total Revenues $46,311,226 $209,772,576 $395,152,992 $558,478,830 $741,420,030

Variable Equipment Costs $31,272,600 $83,183,520 $78,180,000 $71,925,600 $62,544,000

Operating Revenues $15,038,626 $126,589,056 $316,972,992 $486,553,230 $678,876,030

Operating Costs

Global Operations $3,180,408 $4,665,670 $5,123,454 $5,279,077 $5,451,967

U.S. Operations $2,659,346 $3,588,420 $5,962,100 $6,675,760 $7,364,340

Depreciation & Amortization $4,295,143 $5,591,905 $6,722,143 $7,281,714 $8,020,952

Total Operating Costs $10,134,897 $13,845,995 $17,807,696 $19,236,551 $20,837,259

Pretax Operating Income $4,903,729 $112,743,061 $299,165,296 $467,316,679 $658,038,771

Cumulative Income Tax Shield $0 $0 $0 $0 $0

Income Tax Expense (35%) $1,716,305 $39,460,071 $104,707,853 $163,560,838 $230,313,570

Net Income (Loss) $3,187,424 $73,282,990 $194,457,442 $303,755,841 $427,725,201

Percent Net Margin 21% 58% 61% 62% 63%

Percentage Increase Sales na 842% 250% 153% 140%

Expenses as % of Sales 80% 44% 23% 15% 10%

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$0$100,000,000$200,000,000$300,000,000$400,000,000$500,000,000$600,000,000$700,000,000$800,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

REVENUES vs TOTAL PRETAX COSTS

Gross RevenuesTotal Pretax Cost

APAC REVENUES vs COSTS

Projected Valuation Analyses With successful execution of its business plan, a valuation analysis reveals a projected worth of approximately $1.7 billion at the end of year 3 and $3.9 billion in year 5 using an EBIT multiple of 6. Alternatively, a valuation of the Company using present value of discounted cash flow methodology (50% discount) equals $134 million:

Valuation Based on PV of Future Cash Flows = $134,592,652

Based on a discount rate of: 50%

$5,687,430 $62,925,177 $159,224,209 $269,033,878 $384,117,538

$31,462,588 79,612,104 134,516,939 192,058,769

$39,806,052 67,258,469 96,029,385

$33,629,235 48,014,692

$24,007,346

The following is a summary of potential capitalization totals and per share stock value utilizing various multipliers. Estimated capitalization is noted using an EBIT multiplier, while per share pricing is projected utilizing a range of price-earnings multiples:

EBIT MULTIPLE METHOD:

Projected Capitalization

Year 1 Year 2 Year 3 Year 4 Year 5

EBIT Multiple

6 $29,422,376 $676,458,367 $1,794,991,774 $2,803,900,073 $3,948,232,624

8 $39,229,835 $901,944,490 $2,393,322,365 $3,738,533,430 $5,264,310,166

10 $49,037,293 $1,127,430,612 $2,991,652,956 $4,673,166,788 $6,580,387,707

12 $58,844,752 $1,352,916,735 $3,589,983,548 $5,607,800,145 $7,896,465,248

14 $68,652,211 $1,578,402,857 $4,188,314,139 $6,542,433,503 $9,212,542,790

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P/E MULTIPLE METHOD:

Price per Share

Year 1 Year 2 Year 3 Year 4 Year 5

P/E Multiple

6 $0.51 $11.73 $31.11 $48.60 $68.44

8 $0.68 $15.63 $41.48 $64.80 $91.25

10 $0.85 $19.54 $51.86 $81.00 $114.06

12 $1.02 $23.45 $62.23 $97.20 $136.87

14 $1.19 $27.36 $72.60 $113.40 $159.68

Capital Plan and Estimated Use of Proceeds The Company is seeking $20 million in initial outside investment capital in exchange for a 40% equity stake in the Company. Use of proceeds will be utilized primarily for fixed asset purchases related to deployment of the The Company solution in selected cities, and the necessary operating expenses to bring the Company to full commercialization.

Legal & Accounting1%

Fixed Assets75%

Working Capital9%

Offering Costs10%

Marketing5%

APAC ESTIMATED USE OF PROCEEDS

Amount Percent Total Proceeds $20,000,000 100%less Offering Costs $2,000,000 10%Net Proceeds $18,000,000 90% Operating Expenses Marketing $1,000,000 6%Legal & Accounting $250,000 1%Fixed Assets $15,000,000 83%Working Capital $1,750,000 10%Total $18,000,000 100%

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EXIT STRATEGY The Company devoutly believes in the long-term viability and investment value of the Company, business plan and model. However, it is also the Company’s goal to identify exit strategies and additional financing opportunities within two to three years through successful execution of this plan. Management intends to work actively with investors to choose among several strategies, including sale, acquisition, or merger, in addition to the potential for an IPO or reverse merger when market conditions are attractive: A. Initial Public Offering (Traditional or Direct) The strategy associated with initial funding is to combine state-of-the-art broadband wireless “last mile” solutions expertise in the deployment of its systems with large regional ISPs in order to maximize long-term opportunities. Management believes that revenue will be generated from all lines by Q-2 2003, allowing management to then more accurately forecast revenues over the next two to three years. The Company believes The Company will be well positioned to consider an IPO filing during the Q-1 or 2, 2004 period. At the discretion of the Company’s Board of Directors, the Company shall review and consider becoming a publicly traded entity via a reverse merger with a qualified listed “shell” company. B. Merger/Acquisition Management believes many merger and/or acquisition opportunities will arise throughout the next 24 months. Should the appropriate buy-out or partnership be presented that positively effects shareholder value, The Company will encourage its’ Board of Directors to thoroughly review such an option, however, such an option is solely up to the discretion of the Company’s Board of Directors.

CONCLUSION The Company Telecom, Inc. offers investors an opportunity to profit from the Company’s planned penetration of expanding global markets for last mile wireless broadband and infrastructure solutions. The Company is positioned to immediately meet this increasing market demand by delivering innovative and proprietary software applications, hardware, and services through a unique and proven business model. Based on the attached financial projections, management is confident that the Company represents sound business investment and the potential for an exceptionally attractive return.

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Appendix 1: Management Team Michael Patrick xxx, Chairman and CEO Mr. xxx first gained experience in the wireless communication industry in 1994 as an investor and participant in IVDS (Interactive Video Data Spectrum) licenses secured to deploy wireless Internet access, remote medical monitoring and wireless utility meter reading. Representing the Chinese, Mr. xxx was approached by Mr. Steven Tieu in September of 1999 to consider the engaging in the Chinese communication market. Since that time, Mr. xxx has traveled extensively in China and has been solely responsible for all negotiations, due diligence research, selection of counsel, all US/Chinese Contracts and Agreements, selection of Company alliances, advisors and management, technological research and selection of technologies, preparation of documents, etc. and all other work product as necessary to bring this enterprise to the point of immediate viability. With the other Company Directors, Mr. xxx will oversee the selection of additional key management for the Company and be responsible for current operations and deployment of telecommunication related services in China and internationally. Mr. xxx will retain the position of Chairman and shall hold the position of CEO, until such time as a suitable replacement is identified and selected. Mr. xxx has been trained and is fluent in the organizational management technology of Management by Statistics and is also responsible for the organizational and administrative structure of the Company. Mr. xxx also has extensive experience in real estate development. Gillian yyy, Vice Chairman, President and Chief Technology Officer Mr. yyy has substantial international communications and computer related technical skills and experience with a strong entrepreneurial and management background. Mr. yyy currently owns a computing and networking consulting firm named “Quality Computer Solutions.” Mr. yyy is a leading Wireless Architect, Researcher, Developer, Engineer, Programmer, Consultant etc. performing services for major companies and labs including Lucent Technologies Bell Labs Innovations. Formerly employed by AT&T, Mr. yyy serves as a Wireless Data Architect specializing in Third Generation (3G) GGSN/PDSN and VoIP network interfaces. For Lucent/Bell, Mr. yyy generates Architecture and Requirements (TR45.4-6 and RFC’s) from development and testing through deployment to create hardware and software for “realtime” Internet applications, IP wireline and wireless interfaces, as well as developing next generation IWF’s and Fiber Optic network interfaces, Packet Switching Unit interfaces and interfaces to define wireline to wireless infrastructure support and protocols. Mr. yyy has served as a Program Manager for an R & D team to coordinate standards for 3G technologies impacting voice and data with IP and mobile IP infrastructure based on WAP and other protocols. Mr. yyy also served as a Project Manager to deliver and deploy 5ESS/AUTOPLEX Wireless platforms in 12 undeveloped international markets including Russia, India, Peru and Brazil and was a Wireless Test Architect for TDMA and CDMA environments establishing services in Brazil, Korea, Thailand, Panama, Russia, China and 8 other countries. Mr. yyy is also a Black Belt in Karate and owns 6 martial arts schools. David yyy, Chief Information Officer Mr. yyy provides extensive telecommunications experience to the Company with Progressively responsible experience leading business growth as well as corporations’ internal IT needs, with activities including international negotiations, strategic planning, business development, systems and product research and development, project management, reengineering, staffing, budgeting,

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and continuous improvement initiatives. Mr. yyy has overseen staff as large as 200 and budgets as large as $75m and is technically competent in virtually all aspects of wireless and circuit based system hardware and software with international management and deployment experience. Mr. yyy has served as the Chief Technology Officer for Telecom One as well as the Chief Information Officer for AT&T Wireless. Mr. yyy holds a Bachelors of Commerce degree from McGill University, Montreal, Canada and an associates Degree in Computer Science, McGill University, Montreal, Canada. Mr yyy has serves on the technical advisory boards of NirvanaSoft, Inc., CirrusDigital Inc and CrucianGlobal, Inc. and his other training includes PeopleSoft Systems; Oracle Financials; Cisco Networks; Nortel Networks; Microsoft NT Network Design; Financial Management; Software Process Reengineering; Defining Corporate Strategies; University of Pennsylvania Management Seminars; Socratic Management and Selling Techniques and Public Speaking. Robert yyy, Chief Security Officer Mr. yyy has been employed by Lucent Technologies since 1996. His numerous areas of expertise include Performance Engineering, Architecture and Configuration Planning of Computer Systems, Data Networks & Wireless Infrastructure (cellular, PCS, metropolitan Internet access) and extensive programming experience with expertise in the numerous operating systems and languages of the industry (C, C++, UNIX, Linux shell, IS-95 CDMA, IS-54/IS-136 TDMA etc.) Mr. yyy is qualified as a Senior Architect, Developer, Analyst and educator in the computer and/or communications systems arena and his professional qualifications include Management, Systems Engineering and Hardware and Software engineering. At Lucent, Mr. yyy is a Wireless Architect whose responsibilities include all future releases of AUTOPLEX/FLEXANT IS-95 CDMA data subsystem architecture, coordinating product management, developers and architects in Core IP packet data and UMTS RNC reviews, wireless systems analysis etc. and also had the lead MTS position responsible for performance, functionality and reliability testing for XWD WaveACCESS 3500 Wireless Internet Access System, a metropolitan cellular IP-data overlay for accessing the Internet at 1.5 bps in the international 3.5 GHz band. Mr. yyy has extensive experience in computers and all aspects of wire and wireless technologies and applications. Mr. yyy holds two patents for “Location-Based Paging for Mobile Telephone Units,” “Time-based Paging for Mobile Telephone Units” and is the co-inventor of a pending patent for “A Method and Apparatus for Measuring Network Performance and Stress Analysis.” Previous to Lucent Technologies, Mr. yyy spent 14 years with AT&T Bell Laboratories and for 5 years was AT&T’s primary representative and participating member of the Transaction-Processing Performance Council (TPC), a global industry consortium. At AT&T Mr. yyy proposed, architected and managed development of a performance certified memory board for the 3B2/600 “Falcon” (USAF $1.7 billion contract) and provided performance analysis on products for Hughes Aircraft. Previous to AT&T, Mr. yyy was employed Texas Instruments Semiconductor Group for 5 years. Mr. yyy is an Executive Member of the PCI Industrial Computer Manufacturers Group (PICMG) and is Charter Member of AT&T Bell Laboratories Performance Standardization Committee. Mr. yyy holds a Masters Degree in Electrical Engineering with concentration in microprocessor applications and digital design with a GPA of 3.8/4.0. Steven Tieu, - President Asian Marketing/Chief Liaison Officer – Asia Mr. Tieu has been engaged in the business of manufacturing in China and import/export trade with China since 1989, maintaining residences in Shenzhen and in the US. While engaging in

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the trade business, Mr. Tieu has established relationships with many powerful and influential people and organizations in China. Mr. Tieu is responsible for first envisioning this business plan and introducing Mr. xxx to all the necessary Chinese contacts to implement successful US/Chinese negotiations and operations. Mr. Tieu is a proven expert in Chinese business culture, affairs and relations and Mr. Tieu’s key industry contacts, relationships and profound negotiating skills were invaluable to the culmination of this enterprise. Mr. Tieu will be responsible for all continuing liaisons, negotiations and relations with China. Mr. Tieu fluently speaks several languages including Chinese Mandarin dialect, Chinese Cantonese dialect, Japanese, Vietnamese, French, Spanish and English. Qinghe (Jennifer) yyy, Vice President Asian Marketing/Asian Support Officer Ms. yyy is an experienced senior technical Executive with combined experiences in PSTN, SDH Transmission, DATA, ATM, ADSL and IP Network Systems including Broadband, Multiple Access application integration. Formally of ANDA Networks of San Jose, CA where she was the manager of Application Support Services and International Business Development and senior Application Consultant for International Business Development, her responsibilities included application design, pre-sales technical support, set-up of demonstration systems and demonstrate the same in Lab and field trials and Technical Support for International sales including Latin America, Mainland China and Taiwan. Ms. Sander has served as the Deputy Chief Engineer and Chief of the Computer Center for China Telecom in Suzhou, China where her responsibilities included analysis and management of technical plans, applications, and bids (established) in IP core network (ISP), Broadband backbone, access products, and computer integrated projects such as IN, Call Center, Network Management System, management of software and hardware maintenance and applications and integration of projects such as billing systems, business systems, OA, Call Center(s) etc. Ms. yyy holds a Bachelor of Science Degree from Nanjing Institute of Post and Telecommunications and a Bachelor of Science Degree in Communication and Information Systems, from Suzhou University, Jiangsu, China. Ms. yyy is Fluent in Mandarin, Cantonese and English and can perform highly technical English/Chinese and Chinese/English translations and can accurately perform, communicate and verify telecommunications related technical document translations. Michelle van yyy, President - European Marketing/Chief Liaison Officer – Europe Michelle brings a proven track record in launching and leveraging assets in international markets, with experience in identification and analysis of strategic content and E-commerce partners, deal structuring and negotiation, and new product development and launch. Michelle has held management positions responsible for business development, venture capital and new media operations, corporate development and investor relations, and communications, with Hollinger Digital, Inc. and the American Enterprise Institute in Europe and the US. Michelle holds a BA degree in Western European Studies from the College of William and Mary, and earned honors at the Institute for American Universities in Avignon, France. Paresh yyy, Market Analyst Paresh has experience in operations management, marketing, sales, sales consulting, and financial analysis for technology, entertainment and financial firms. He holds a Bachelors Degree in Business Administration from Loyola University, and an Associates Degree in Marketing form Watterson College.

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Appendix 2: Proforma Financial Statements

5-Yr. Income Statement Projections Year 1 Year 2 Year 3 Year 4 Year 5

Residential Subscriptions $9,147,060 $54,679,092 $105,191,190 $166,171,590 $227,151,990

Business Subscriptions $16,464,708 $94,519,620 $215,768,982 $318,114,420 $440,075,220

Residential Activation $5,793,138 $15,854,904 $18,294,120 $18,294,120 $18,294,120

Business Activation $14,906,320 $44,718,960 $55,898,700 $55,898,700 $55,898,700

Total Revenues $46,311,226 $209,772,576 $395,152,992 $558,478,830 $741,420,030

Variable Equipment Costs $31,272,600 $83,183,520 $78,180,000 $71,925,600 $62,544,000

Operating Revenues $15,038,626 $126,589,056 $316,972,992 $486,553,230 $678,876,030

Operating Costs

Global Operations $3,180,408 $4,665,670 $5,123,454 $5,279,077 $5,451,967

U.S. Operations $2,659,346 $3,588,420 $5,962,100 $6,675,760 $7,364,340

Depreciation & Amortization $4,295,143 $5,591,905 $6,722,143 $7,281,714 $8,020,952

Total Operating Costs $10,134,897 $13,845,995 $17,807,696 $19,236,551 $20,837,259

Pretax Operating Income $4,903,729 $112,743,061 $299,165,296 $467,316,679 $658,038,771

Cumulative Income Tax Shield $0 $0 $0 $0 $0

Income Tax Expense (35%) $1,716,305 $39,460,071 $104,707,853 $163,560,838 $230,313,570

Net Income (Loss) $3,187,424 $73,282,990 $194,457,442 $303,755,841 $427,725,201

Percent Net Margin 21% 58% 61% 62% 63%

5-Yr. Balance Sheet Projections Year 1 Year 2 Year 3 Year 4 Year 5

Current Assets

Cash $1,632,102 $57,407,585 $206,739,649 $465,398,882 $838,359,699

Accounts Receivable, net $2,472,103 $20,809,160 $52,105,149 $79,981,353 $111,596,060

Other Current Assets $412,017 $5,202,290 $17,368,383 $33,325,564 $55,798,030

Total Current Assets $4,516,223 $83,419,035 $276,213,181 $578,705,799 $1,005,753,789

Fixed Assets

Furniture & Equipment $20,402,000 $26,150,000 $31,555,000 $36,910,000 $42,265,000

Depreciation & Amortization $4,295,143 $9,887,048 $16,609,190 $23,890,905 $31,911,857

Net Fixed Assets $16,106,857 $16,262,952 $14,945,810 $13,019,095 $10,353,143

Other Assets

Other Assets, Misc. $206,009 $1,734,097 $4,342,096 $6,665,113 $9,299,672

Startup costs, net $0 $0 $0 $0 $0

Total Other Assets $206,009 $1,734,097 $4,342,096 $6,665,113 $9,299,672

Total Assets $20,829,088 $101,416,084 $295,501,087 $598,390,007 $1,025,406,604

Current Liabilities

Notes Payable $0 $0 $0 $0 $0

Accounts Payable $833,005 $1,138,027 $1,463,646 $1,581,086 $1,712,651

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Commission Payable $1,202,744 $3,199,238 $3,006,803 $2,766,259 $2,405,442

Accrued Liabilities $110,091 $142,283 $198,662 $224,758 $246,615

Total Current Liabilities $2,145,841 $4,479,548 $4,669,111 $4,572,103 $4,364,709

Non-Current Liabilities $0 $0 $0 $0 $0

Owners' Equity

Paid In Capital - Investors $15,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000

Paid In Capital - Founders $500,000 $500,000 $500,000 $500,000 $500,000

Accumulated Retained Earnings $3,187,424 $76,470,414 $270,927,856 $574,683,697 $1,002,408,898

Total Owners' Equity $18,687,424 $96,970,414 $291,427,856 $595,183,697 $1,022,908,898

Total Liabilities & Owners' Equity $20,833,265 $101,449,962 $296,096,967 $599,755,800 $1,027,273,607

5-Yr. Cash Flow Statement Projections Year 1 Year 2 Year 3 Year 4 Year 5

Cash Flow From Operations

Net Income/Loss $3,187,424 $73,282,990 $194,457,442 $303,755,841 $427,725,201

Plus Depreciation Charges $4,295,143 $5,591,905 $6,722,143 $7,281,714 $8,020,952

Minus Change in Accounts Receivable ($2,472,103) ($18,337,057) ($31,295,989) ($27,876,204) ($31,614,707)

Minus Change in Other Current Assets ($412,017) ($4,790,273) ($12,166,093) ($15,957,181) ($22,472,466)

Plus Change in Current Liabilities $2,145,841 $2,333,707 $189,563 ($97,008) ($207,395)

Plus Change in Non-Current Liabilities $0 $0 $0 $0 $0

Plus Depreciation & Amortization $4,295,143 $5,591,905 $6,722,143 $7,281,714 $8,020,952

Net Cash Flow from Operating $11,039,430 $63,673,177 $164,629,209 $274,388,878 $389,472,538

Purchases of Property & Equipment ($20,402,000) ($5,748,000) ($5,405,000) ($5,355,000) ($5,355,000)

Net Cash Flow from Investing ($20,402,000) ($5,748,000) ($5,405,000) ($5,355,000) ($5,355,000)

Cash Flows from Financing Activities

Cash Received from Borrowing $0 $0 $0 $0 $0

Net Cash Received from Investors $15,000,000 $5,000,000 $0 $0 $0

Net Cash Flow from Financing $15,000,000 $5,000,000 $0 $0 $0

Net Cash Flow $5,637,430 $62,925,177 $159,224,209 $269,033,878 $384,117,538

Cash Available at beginning of period $50,000 $1,632,102 $57,407,585 $206,739,649 $465,398,882

Net Cumulative Cash Flow $5,687,430 $64,557,279 $216,631,794 $475,773,526 $849,516,420

Performance Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Quick Ratio 0.761 12.815 44.278 101.791 192.077

Current Ratio 2.105 18.622 59.158 126.573 230.429

Gross Margin 0.325 0.603 0.802 0.871 0.916

Net Margin 0.069 0.349 0.492 0.544 0.577

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Appendix 3: Detailed Expenditure Projections YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Variable Equipment Costs

New Subscribers (Residential) $17,200,200 $39,402,720 $37,526,400 $34,399,200 $28,144,800

New Subscribers (Small Businesses) $14,072,400 $43,780,800 $40,653,600 $37,526,400 $34,399,200

Operating Costs

Rent/Lease Office Space $180,000 $189,000 $198,450 $208,373 $218,791

Office Supplies/Maintenance $24,000 $25,200 $26,460 $27,783 $29,172

Utilities $48,000 $60,000 $63,000 $66,150 $69,458

Phone $72,000 $90,000 $66,000 $60,000 $60,000

Insurance $48,000 $75,000 $93,750 $117,188 $146,484

Connection to WWW $715,008 $2,100,000 $2,400,000 $2,400,000 $2,400,000

Legal $30,000 $31,500 $33,075 $34,729 $36,465

Automobile Allowance $200,000 $100,000 $100,000 $100,000 $100,000

Miscellaneous $96,000 $120,000 $120,000 $120,000 $120,000

Market Research/Support (5) $96,000 $120,000 $180,000 $210,000 $240,000

U.S. Operations

Advertising/Promotions $50,040 $75,000 $100,000 $125,000 $150,000

Equipment Maintenance $1,008 $5,000 $10,000 $10,000 $25,000

Translation Services $5,000 $15,000 $50,000 $75,000 $100,000

Rent/Mortgage $60,000 $120,000 $180,000 $180,000 $180,000

Utilities $7,500 $13,000 $18,000 $18,000 $18,000

Phone $10,000 $12,000 $15,000 $18,000 $20,000

Travel Expenses $40,000 $80,000 $150,000 $225,000 $250,000

Insurance $40,000 $75,000 $80,000 $80,000 $80,000

Political Risk Insurance (15k per M) $390,000 $75,000 $400,000 $100,000 $0

Misc. Legal/Risk Mitigation $100,000 $100,000 $100,000 $100,000 $100,000

Patent/Copyright Allowance $24,960 $50,000 $100,000 $150,000 $150,000

Security Budget $10,000 $60,000 $100,000 $150,000 $200,000

Misc. $100,000 $150,000 $200,000 $250,000 $300,000

Salaries and Benefits

Employee Benefits & Taxes (22% Salaries) $629,748 $813,890 $1,136,394 $1,285,668 $1,410,694

General Management $375,000 $393,750 $413,438 $434,109 $455,815

Finance and Marketing $240,000 $252,000 $264,600 $277,830 $291,722

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Operations $755,000 $792,750 $832,388 $874,007 $917,707

U.S. Organization $1,492,490 $2,261,000 $3,655,000 $4,258,000 $4,747,000

Total Operating Costs $37,112,354 $91,437,610 $89,265,554 $83,880,437 $75,360,307

Expenditure Summary YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Variable Equipment Costs $31,272,600.00 $83,183,520.00 $78,180,000.00 $71,925,600.00 $62,544,000.00

Global Operations $3,180,408.00 $4,665,670.00 $5,123,453.50 $5,279,076.93 $5,451,966.92

U.S. Operations $2,659,345.80 $3,588,420.00 $5,962,100.00 $6,675,760.00 $7,364,340.00

Total Operating Costs $37,112,354 $91,437,610 $89,265,554 $83,880,437 $75,360,307

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Appendix 4: Proforma Capital Expenditures

CAPITAL EXPENDITURE, DEPRECIATION AND AMORTIZATION SCHEDULE

Leasehold Equipment,

Improvements Software Furn. & Fix. Computers Total 7 Years 3 Years 5 Years 3 Years Per Year

Purchases Year 1 $120,000 $1,575,000 $18,620,000 $87,000 $20,402,000

Purchases Year 2 $45,000 $1,025,000 $4,580,000 $98,000 $5,748,000

Purchases Year 3 $25,000 $250,000 $5,000,000 $130,000 $5,405,000

Purchases Year 4 $25,000 $250,000 $5,000,000 $80,000 $5,355,000

Purchases Year 5 $25,000 $250,000 $5,000,000 $80,000 $5,355,000

Depreciation/Amortization

Year 1 $17,143 $525,000 $3,724,000 $29,000 $4,295,143

Year 2 $23,571 $866,667 $4,640,000 $61,667 $5,591,905

Year 3 $27,143 $950,000 $5,640,000 $105,000 $6,722,143

Year 4 $30,714 $508,333 $6,640,000 $102,667 $7,281,714

Year 5 $34,286 $250,000 $7,640,000 $96,667 $8,020,952

Year 6 $34,286 $166,667 $3,916,000 $53,333 $4,170,286

Year 7 $34,286 $83,333 $3,000,000 $26,667 $3,144,286

Year 8 $17,143 $0 $2,000,000 $0 $2,017,143

Year 9 $10,714 $0 $1,000,000 $0 $1,010,714

Year 10 $7,143 $0 $0 $0

Total Thru 10 Years $236,429 $3,350,000 $38,200,000 $475,000 $42,254,286

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Appendix 5 – Schematics of Technology and Platform

Key Platform ComponentsIn-building CPE

Base Station, control channel/port for router, D H CP, AAA, L2 sw itch.

W ireless L ink: 2.4 GH z in phase 1;3.5 G H z in phase II

H ub end

Spoke end

Base station Antenna

External

radio

Rem ote station Antenna

Sw itch

Internal radio

A H ub configuration (e.g., D i W ang Building) C-M ISP Functions(CRM , B illing, Tier 1 APAC Tier 2 NO C NO C)

…

Public InternetBackhau l R adios

Backhaul H ub

Backhaul H ub

Data

Control

D ata

Control Data

VPN

Subscribers’ PCs

Standard: Fixed access

Access Point (2.4 / 5.8 G Hz)

In-building Base Station

Subscribers’ Lap-

tops

O ptional: Access Points,In-building, 2.4 / 5.8 G H z:

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H u bre la y

H ub

H ub

H ub

E ndH u b

E nd S po k e

R ela y S p ok e

E nd S p o k e

IS P & P O P

3-10 m bps C P E , on sm a lle r bu ild ings (P 2M )

430 + m bpsB ackhau l, (P 2P )

O p tiona l: A ccess P o in ts ,2 .4 / 5 .8 G H z

O p tiona l: W ireless LA NFo r sub scrib e r’s P D A s, lap tops

S im p le w ire E th ern et

A P A C 3G B asic P h ase 1 A rch itectu re O v erv iew

T w o -L evel H u b an d S p oke T op o logy I llu stra tion

Feed er H ub

E nd S po k e

E nd S p o k e

E nd S p o k e

E nd S p o ke

• H ub to H ub w ire less

• H ub to sp oke C P E rad ios

R ela y S p o k e

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H igh Level C osting: a sim ple tw o-level hub & spoke topology

H ub

H ub

H ub

H ub

H ub

H ub

H ub

H ub

H ub

A ssum e:1.) 20 ,900 subs spread ou t equa lly;2 .) 128 m bps m in im u m B W floor;3 .) aggreg ated services;4 .) N o rep ea ters/u nique solu tions

requ ired .5 .) C ost in U .S .D .6.) U .S lab or is :

$422,7277.) N o R F

com p lex ities8 .) C onservative

10 %pene tra tionest.

$ 15 5,520 $ 15 5,5 20

$15 5,5 20

$ 15 5,5 20

$ 15 5,520

$15 5,520

$15 5,5 20

1 2

3

4

56

7

8

$155,5 20

$ 15 5,5 20

9IS P & P O P

O ther Equ ipm ent: $320 ,000

C osts :8 H & S , 1 F eeder H ub

W ith spoke :$1 ,399 ,680O ther equ ipm ent:

$320 ,000U .S . O pera tions expense : $422 ,727

T ota l: $2 .46M

N otes :

1 .) U S costs d im inish over tim e2.) H ig her penetration ra tes

like ly in dense com m erc ia lareas, w ill reduce costsdram atica lly;

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Appendix 6: The Company 3G Applications Description with Partial List of Market Applications Wireless ISP – High Bandwidth wireless “Last Mile” or “Last Kilometer” connectivity to all Homes and Businesses. Can be fully deployed and operational in a few weeks with significant cost savings over wire line and optical fiber. The list of applications shown below is not complete. With wireless broadband connectivity to all homes and businesses, market applications and services can be customized to the demands of the market. It is anticipated additional revenue generating services and applications will be developed once large-scale broadband infrastructure is in place.

1. Description of Last Mile/Kilometer Services: a. From 64kbps to 3.2Mbps (1.5 E1/2 T1 Lines) dedicated and guaranteed

Internet upload and download speeds to all homes and businesses. Does not get slower as more users are added. Quality of Service (QOS) through CIR/MIR

b. 200% - 300% faster than ADSL c. 16 to 25 mile range / 26 kilometers to 40 kilometers range d. 100% connection to all homes and businesses in the city or area e. Multi T1/E1 aggregation points f. High Bandwidth Wireless Local Area Networking (W-LAN) for business

users. g. Mobile with PCMCIA wireless card h. Line-of-Sight (LOS) and Non-Line-of-Sight (NLOS) capabilities

2. Description of possible Last Mile/Kilometer Markets and Applications:

a. Web Hosting Services b. Applications Service Provider (ASP) services c. Airports for ISP and LAN Services d. Convention Centers and Exhibit Halls for ISP and LAN Services e. Government Buildings for ISP and LAN Services f. Educational Institutions for ISP and LAN Services and Remote Education

(Distance Learning) applications g. Police car mounted mobile Internet access and remote mobile data base

information retrieval (check license plates, Drivers License numbers, passport numbers, personal records form computer in police car)

h. Full security encryption for protection

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3. Description of Voice over Internet Protocol (VoIP) Markets and Applications: a. Call originations from home or business to Public Switched Telephone

Network (PSTN) for domestic and international termination b. Call terminations to Mobile Phones (PSTN to Mobile) c. Mobile Phone termination to home/business (Mobile to VoIP) d. Video Teleconferencing e. Low Cost domestic and international call origination and termination

4. Description of possible Virtual Private Network (VPN) Applications:

a. Private and secured Point-to-Point audio, video and data transmissions. b. Secured and encrypted military and governmental communications c. Financial Transactions such as wireless Automated Teller Machines (ATM),

wireless remote credit card, debit card and check verification terminals. d. Aggregated database retrieval for Banking institutions to verify bank accounts

and electronically funds from one bank to another. e. Secure E-Commerce transactions f. Private video teleconferencing – VoIP over VPN

5. Description of possible Streaming Media Markets and Applications:

a. Movie streaming and downloads b. Sports Events (Olympic events) c. Television Broadcasts d. Custom news and sports search capabilities with browser. (Set your browser

to search the Internet for audio and video news, sports, etc. for viewing later) e. Music Streaming and downloads (faster than ADSL) f. Internet Radio applications g. Emergency alert services h. Live video for monitoring in home, business, on the streets, customs check

points, medical monitoring, construction sites, schools, retail centers, parking garages etc.

i. All audio and video can be streamed in real time or downloaded and viewed later.

j. Purchase music and movies over the Internet and write to a CD or hard drive.

7. Description of possible Security Applications: b. Visual Security for Military, Police, Medical, Government, Traffic, Customs

Offices, Business and Residential. Cameras can be hardwired for electricity or wireless with solar power and battery.

c. Remote sensing such as retinal (eye) scan for high security clearance. d. Break-in alert for homes, business, government etc. including passive sensors

(open door, step on floor) and motion sensors (call your mobile phone or call police automatically)

e. Seismic sensors for earthquakes f. Full remote equipment monitoring and remote activations for energy (monitor

and on/off) Air Conditioning (monitor on/off), Water (monitor on/off) etc. g. Remote computer and network monitoring h. Firewall and data traffic filtering

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8. Description of possible wireless Geo-Location Markets and Applications:

a. Small inexpensive geographic location device. b. Establishes a GPS location without using a GPS system – inexpensive to use. c. Can locate people, automobiles, emergency vehicles (police, fire ambulance

etc.), shipping containers etc. d. Automobile theft market e. Equipment theft market (Construction equipment, computers etc.) f. Freight Industry - Locate shipping containers anytime anywhere g. Monitor deliveries and postage h. Small sensors can sense water levels in reservoirs, lakes, flood control and

sewer treatment. i. Locate sewage blockages. j. Locate empty parking spaces in large parking garages or indicated when

garage is full k. Military and governmental applications

9. High Bandwidth “Backhaul” Applications:

a. Point-to-Point Wireless backhaul in at 1gbps (500 E1 lines) with range up to 25 miles with research for range up to 80 miles

b. Backhaul can be used where fiber does not exist for high bandwidth connections to cities and communities. Can replace fiber optic and is less expensive to install.

c. Use backhaul to go around bottlenecks in cities and between cities. Helps reduce traffic on existing wire lines and increases infrastructure capacity.

d. Extra bandwidth can be resold to third parties e. Backhaul can be used as an aggregator for all forms of data traffic - aggregate

DSL and relieve bottlenecks f. Very fast installation and deployment.

10. Technical Description:

a. Multiple air interfaces on frequencies from 1.0GHz to 20GHz spectrum b. 802.11B c. 802.11A d. 802.11G e. 802.11E f. 802.11.16 g. MMDS h. OFDM i. Proprietary equipment and software unavailable from any other vendor.

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Appendix 7: Selected Chinese Internet Market Data from the China Internet Network Information Center (CNNIC) www.cnnic.net.cn

Monthly Income per Capita: (RMB)

Below 500 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 24.8% 24.1% 16.5% 8.2% 4.6% 2.6%

3001-4000 4001-5000 5001-6000 6001-10000 More than 10000 No Income

2.7% 1.3% 0.7% 0.6% 0.9% 13.0%

Main Access Locations:

Home Office School Internet Cafe

Public Library

Mobile Access Others

62.1% 43.3% 21.8% 17.3% 0.7% 0.9% 0.5%

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Access Expenditure:

Public Expense Users' Own Expense Both 10.1% 77.1% 12.8%

Actual Expenditure per Month: (RMB)

Less than 50 51-100 101-200 201-300 301-400 401-500 Over 500 44.3% 30.1% 18.7% 4.1% 1.2% 0.9% 0.7%

Note: The telephone fee was included, while daily telephone communication fee was not included.

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Internet Users' Satisfaction

¡¡ Excellent Satisfied So so Unsatisfied Disappointed Transmit Speed 3.5% 25.6% 38.4% 21.9% 10.6%

Expenditure 4.3% 17.4% 35.3% 28.7% 14.3% Security 1.6% 14.5% 46.2% 28.6% 9.1% Abundance of Chinese Information

5.1% 39.5% 40.7% 11.9% 2.8%

Authenticity of the Content 1.7% 21.0% 50.2% 21.7% 5.4%

Appropriate Content 2.6% 24.3% 50.1% 17.8% 5.2%

Protection of Privacy 2.7% 18.9% 44.9% 25.1% 8.4%

Easy to Operate 9.6% 45.2% 36.5% 6.9% 1.8%

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Monthly income of Internet users The results of the tenth CNNIC survey show that 86.6% of Internet users have a monthly income no more than RMB 2,000, only 13.4% above RMB 2,000, and 37.8% below RMB 500 (including no income users) (see Fig 2-14). Low-income groups remain the majority of Internet users, which may be related, to a large extent, to the high proportion of student users.

Compared with the same period last year, users with a monthly income of RMB 2,000 and below have increased from 84.1% to 86.6%, whose absolute number has increased from 22.287 million to 39.663 million with an increase of 78% (see Fig. 2-15 and Fig. 2-16). The growth of low-income ones is obviously faster than that of high-income ones. These statistics of users' educational background indicate that the Internet is more and more widespread. It is no longer a privilege of people with higher education and medium/high income but a tool accessible by ordinary people with basic education and so-so income.

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Users' occupation

The results of the tenth CNNIC survey show that student users account for the highest proportion of 26.2% among Internet users, followed by professionals (17.5%), assistants such as clerks (13.2%), and employees of the trade and service sector (12.0%). Soldiers and people engaged in agriculture, forestry, husbandry and fishing are of the lowest proportions, both around 1% (see Fig. 2-17).

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It should be noted that compared to January 2001, student users have increased considerably from 4.703 million to 12 million, the percentage of whom has increased from 20.9% to 26.2% (see Fig 2-18). It is highly possible that the growth is closely related to the construction of campus LAN and the rise of various types of Internet schools and long-distance education.

Sources of Internet access charges

The results of the tenth CNNIC survey show that 77.1% of Internet users get online at their own expenses, while only 10.1% at public expenses, and 12.8% using both (see Fig. 3-6). Paying at one's own expenses is still the major mode for Internet access.

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According to the statistics of the CNNIC surveys, Internet users at their own expenses have a higher proportion than those at public expenses, and their contrast becomes increasingly more obvious as time goes by. The former has risen substantially from 44.0% four years ago to the current 77.1% with 33 percentiles increased; while the latter has dropped gradually from 35.0% to 10.1% with 25 percentiles decreased (see Fig. 3-7). This should be somewhat related to the change of Internet access places: most people get online at home; correspondingly, paying at one's own expenses becomes the major paying method for Internet access.

Actual monthly Internet expenses

The results of the tenth CNNIC survey show that the majority of Internet users spend less than RMB 100 per month on Internet access, among whom people spending less than RMB 50 have the highest proportion, reaching 44.3% (see Fig. 3-8). Generally speaking, people do not spend much money on Internet access.

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Compared with the same period last year, people spending RMB 100 and less per month on Internet access have increased from 67.9% to 74.4%, while those spending more than RMB 100 per month have decreased from 32.1% to 25.6% (see Fig. 3-9). People with low Internet expense have an increasingly higher proportion, which may have certain relation with better time control by Internet users and the decrease of Internet access charges.

Purposes of Internet access

The results of the tenth CNNIC show that 47.6% people visit Internet mainly for obtaining information, closely followed is for entertainment (18.9%) and making friends (14.9%) (see Fig. 3-14). Obtaining information is still the primary purpose for Internet access.

It should be addressed that, compared with the same period last year, the proportion of people getting online primarily for obtaining information has risen from 42.9% to 47.6% with 5 percentiles increased (see Fig. 3-15), which may be the result of the Internet's characteristics, i.e. being open, convenient, interactive, rich in information, and diversified in services

Reasons for use Broadband: High speed 59.8% Low cost 7.4% 24 Hours a day logon 5.5% Attractive services such as VOD 2.0% Available in office 24.6% Others 0.7%

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Reasons for users not to use Broadband: High preliminary charges 37.1% The technique still not mature 3.7% Unstable 1.8% Lacking application services 3.9% 24 hours a day logon increases Security Hidden trouble 1.0% No such conditions (including no connection available) 47.1% Others 5.4% Users' intention of applying for Broadband connection: Within 1 Month 2.2% Within 1-3 Months 3.9% Within 3-6 Months 7.1% Within 6-12 Months 12.6% After 1 Year 13.8% Unknown/not clear/Hard to say 60.4% No such Intention 0%

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