Telestone Technologies receive 3G order from China Ericsson

May 11, 2005

Telestone Technologies announced it has received the first $100,000 order from China Ericsson, a division of LM Ericsson, for products to be deployed in a trial 3G network project in the People's Republic of China (PRC).

This initial order, comprised primarily of passive radio frequency accessories, is the first phase of a three-year agreement between the companies to jointly develop a series of products for use on Ericsson's wireless network platforms in China and in other Southeast Asian markets.

The products, which include multi-system combiners, filters, 3G repeaters and 3G trunk amplifiers, will be tested by the companies and thereafter deployed by China Ericsson in a broad array of wireless network coverage solutions. These solutions include stadium signal boosting for the Beijing 2008 Olympics, extensive network optimization projects throughout China and Southeast Asia and the development of China Ericsson's CDMA wireless network in India.

Telestone will provide China Ericsson with technical expertise for the products, as well as ongoing maintenance and service.

"We are very excited to be working with China Ericsson," said Han Daqing, Telestone Chairman and CEO. "This agreement will permit our companies to mutually develop the most sophisticated and efficient wireless network products, including those creating leading solutions for the 3G market.

"Based upon the anticipated PRC government issuance of 3G mobile service provider licenses in 2005, we believe this agreement has the potential of generating up to $50 million in revenue for Telestone over the next three years," said Mr. Han.

Magnus Broden, China Ericsson's Director of Inbuilding Competence, stated, "Telestone, with its unparalleled R&D and service capabilities in China, is our supplier of choice for wireless network components. We look forward to working together, and to aggressively pursuing opportunities for the 3G market in China and other worldwide markets."

3G is a wireless technology that can be used to transmit text, digitized voice, video, and multimedia at data rates up to 384 kbps in a mobile environment. The China Ministry of Information Industry estimates that in 2005 the value of China's 3G network equipment industry and 3G handset industry will both exceed US$60 billion.

Telestone Technologies Corporation provides wireless technology coverage solutions and equipment to major telecom companies in the People's Republic of China. These solutions and equipment are applied in a variety of indoor and outdoor environments including hotels, residential estates, office buildings, airports, exhibition centers, underground stations, highways and tunnels. Telestone reported fully diluted 2004 EPS before extraordinary gain of $.46, an 88 percent increase in net income over 2003.