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Press Release November 13, 2007


WILLCOM Announces PHS Business Tie-up with CNC, a Major Comprehensive Communications Company in the People’s Republic of China

WILLCOM Inc. has concluded a comprehensive agreement with China Network Communications Corporation ('CNC'; head office Beijing; Chairman of the Board of Directors Zhang Chunjiang), a major communications company in the People's Republic of China, to cooperate in the promotion of the PHS business in China.

Although PHS is a system developed in Japan, it is spreading to areas throughout Asia and even to South America with the number of subscribers topping 100 million. In China, there are 93.30 million PHS users, particularly for voice communication and SMS (Short Message Service).

Through this tie up, the companies will examine further advancing PHS, through such means as introducing data communication services, will provide technical cooperation in order to realize packet communication, and will actively work together to develop future PHS.

At the present time, WILLCOM has melded cutting-edge technologies, such as OFDM technology and MIMO technology, with the strengths of the present PHS technology, such as the microcell system, and is working to commercialize the "next generation PHS," a communication system that can realize high-speed transmission up to 20Mbps.

There are high expectations that the "next generation PHS," which is being standardized by the PHS MoU Group, a body promoting the internationalization of PHS, will succeed the present PHS system, which is spreading overseas. "Next generation PHS" is also being recommended by the International Telecommunications Union (ITU) as the technology for broadband wireless access system.

In the future, WILLCOM will strengthen its alliances with companies developing PHS business overseas, particularly CNC, and will actively work to further improve the present PHS technology and to spread the "next generation PHS" overseas.
History of CNC
December 1997 China Telecom Group Corporation launched PHS service in the city of Hangzhou, Zhejiang Prefecture, PRC.
May 2002 China Telecom Group is split. China Network Communications Group (CNC) is created with responsibility for the nine northern provinces in China, while China Telecom Group operates in the south and west of China.
February 2004 Launched PHS service in Beijing
August 2006 The total number of PHS subscribers for China Telecom Group Corporation and CNC surpassed 90 million
Outline of CNC
Company name: China Network Communications Group Corporation Co., Ltd.
Location: Beijing, People's Republic of China
Founded: May 2002
Summary of businesses: Comprehensive telecommunications businesses, including land lines, broadband, and PHS
PHS subscribers: Around 30 million (as of November 31, 2007)
Website: http://www.chinatelecom.com.cn

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