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Sunday partners with Huawei on 3G

December 18, 2003

Sunday Communications and Huawei Technologies today announced Heads of Agreement for the supply of equipment and the provision of financing to assist with the roll out of Sunday's third generation (3G) mobile telecommunications business.

"This is tremendously exciting news for both Sunday and Huawei, representing a partnership between two young and dynamic companies," said Bruce Hicks, Group Managing Director, Sunday Communications Limited. "Huawei has excellent technology that is truly among the world's best and we feel very comfortable working with the management, which is internationally minded and committed to high standards. Huawei's proximity to Hong Kong in Shenzhen means that we will enjoy a very close working relationship on technology development and product introduction, giving Sunday a significant edge over its rivals in developing creative, tailor-made services and bringing them to market quickly."

The Heads of Agreement was signed between Huawei and Mandarin Communications Limited, a wholly owned subsidiary of Sunday. The Heads of Agreement cover a supply contract outlining principal terms of equipment supply, and facilities for the financing of Sunday's 3G network, the final terms of which agreements remain to be finalized. In addition, the Heads of Agreement provide for a loan to be made to enable Sunday to repay its existing vendor and bank loans.

The supply contract is expected to cover the entire end-to-end WCDMA solution needed for the 3G launch, including WCDMA wireless access network, core network, 3G mobile intelligent network, 3G mobile data service platform and applications. Huawei will be the sole supplier and main contractor of equipment for Sunday's 3G network.

Sunday's 3G platform will be based on the GSM standard currently in use in Hong Kong and most markets around the world. It can also be extended to cover 3G technology based on the TD-SCDMA standard that is under development by Huawei, the 3G technology based on the TD-SCDMA standard which receives support from the Chinese government.

The financing associated with the supply contract will support Sunday's 3G roll out requirements. As such, the financing will give Sunday the flexibility to roll out its 3G services at the time and in the manner it sees as most appropriate, according to market realities. Details of the financing will be announced at a later date.

Having a close partnership with a major domestic player in mainland China also fits with Sunday's strategy for this market, where the company envisions many longer-term opportunities. In March 2002, Sunday opened a facility in Shenzhen, where Huawei is based, that now employs over 200 people, around one third of its total workforce. The company has also been active in the evolution of the Closer Economic Partnership Arrangement (CEPA) that has opened some initial avenues for Hong Kong-based telecommunications operators to enter the mainland China market.

Huawei expects to realise considerable synergies from the agreement. "We are delighted to be working with Sunday on 3G. Sunday is a dynamic company. The partnership represents an ideal opportunity for us to develop our 3GSM platform, as we pursue our goal of becoming a global leader in networking and telecommunications equipment," said Huawei's Chairwoman, Sun Yafang. "We will leverage our worldwide resources to help Sunday roll out its 3G service to satisfy the needs of customers and the industry. Given our high quality, reliable network and ability to roll out services quickly, we believe that we can enhance the competitiveness of Sunday in Hong Kong."

In making the announcement, Sunday also reaffirmed its intention not to roll out 3G before late 2004. "Sunday has maintained a consistent strategy on 3G that has proven to be right in line with market developments," said Mr. Hicks. "With Huawei, we are confident of having the right partner to be able to lead the industry in Hong Kong when we do launch -- in product innovation, consumer choice and value for money."

 


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