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For Immediate Release
Hong Kong, January 28, 2002 - TOM.COM LIMITED ("TOM", stock code: 8001) announced today that it has established two joint ventures -- CERNET Information Technology Company Limited (CJV) and CERNET Online Limited (COL) with CERNET Corporation (CERNET Corp), pursuant to an agreement entered into last year. CERNET Corp is the commercial arm of China Education & Research Network (CERNET). This partnership is an important step in the process of building TOM's telecom value-added services (VAS) platform.
TOM will contribute registered capital of RMB60 million for a 51% stake in CJV, and registered capital of RMB3.7 million for a 37% stake in COL. The joint ventures will engage in telecom VAS as permitted by Mainland regulations.
The cooperation includes production, distribution and sales of CERNET dial-up ISP access cards, branding and marketing CERNET ISP services and exploring telecom VAS opportunities such as the potential of broadband and wireless Internet access. Revenue of the joint ventures will come from the sales of pre-paid dial-up access cards, monthly access subscriptions and other value-added services. It is targeted that the joint ventures will generate an aggregate revenue of not less than RMB240 million (approx. HK$226 million) over five years.
CERNET Corp is licensed to operate IP connectivity and other value-added services using the CERNET backbone. It has just launched an Internet dial-up access service in December 2001. The service is currently available in Beijing and aims to reach 16 cities in 2002 and 36 cities in 2003.
CERNET is China's largest educational Internet backbone and provides the biggest education-related information network. Its Internet network is the second largest in China, consisting of a 25,000-kilometre fiber optic Internet backbone reaching 160 cities in China. Some 900 universities and scientific research organisations are members of CERNET. One million terminals in China are hooked up to the network, with users of over 7.5 million people.
In the wake of China's accession to the World Trade Organisation (WTO), CERNET is looking at ways to commercialise its broadband infrastructure, taking advantage of its unique broadband network and broad user base.
TOM Chief Executive Officer and Executive Director Sing Wang said, "CERNET Corp brings to the joint venture an enormous user base and technological know-how. We look forward to exploring a wide range of new telecom VAS opportunities with CERNET Corp. The partnership signifies that TOM is making further inroads into China's vast telecom VAS market."
CERNET Corp CEO Professor Wu Jianping said: "TOM will be our preferred partner in developing future telecom VAS services. It is a good opportunity for us to combine TOM's management and marketing expertise with CERNET's own infrastructure and technological know-how. The partnership will be a strategic step for the commercialisation of CERNET itself, a process which will unlock the vast resources reserve of our network and benefit our users."
TOM launched its Internet access card "TOMNET" in June last year, which has proved to be a huge success. The "TOMNET" card underlies the strength of TOM in branding, marketing and online strategy. TOM aims to build a TOM-branded telecom VAS platform through partnership with telecom operators and ISPs to provide services such as Internet access, VoIP, wireless data and application service provider. This platform can also be used as a new distribution channel for TOM's content aggregated from its online, sports and print operations.
It is estimated that in 2004, China's total ISP revenue will be about US$7.2 billion, with dial-up revenue representing 60% of total ISP revenue. An estimate in 2001 indicated that dial-up users in China's business sector were growing at a compound annual growth rate (CAGR) of 38% while the CAGR for households was 71%. China is also expected to be the world's largest wireless market with 2005 revenue estimated at US$3.8 billion.
(Notes to Editors)
About CERNET
China Education & Research Network (CERNET) was established in 1994 to be a nation-wide Internet backbone for China's Ministry of Education, Qinghua University and nine other universities. CERNET consists of four components: the nation-wide Internet backbone network, a regional network, a provincial network and a network for schools. The network provides comprehensive education-related information including examination results, statistics on student enrolment in mainland tertiary educational institutes and a data bank facilitating academic research. CERNET is also developing new services such as a virtual library, online distance learning, online admission services, placement and recruitment services for the academic sectors.
CERNET has been developing its high-speed Internet backbone since 1999. The 2.5G high-speed network is currently operational linking 36 cities: such as Beijing, Wuhan and Guangzhou; and from Wuhan to Shanghai via Nanjing. Construction of high-speed links with other cities has already started.
(http://www.edu.cn; http://www.cernet.com)
About TOM.COM LIMITED
TOM.COM LIMITED (TOM) is a joint venture between Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd. and other strategic investors. TOM was listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong in March 2000 (stock code: 8001).
TOM has pioneered the cross media strategy, building a portfolio of online and offline media assets through acquisitions and organic growth. Its goal is to be the industry leader in each of its four business segments - sports marketing, outdoor media, print media and Internet portals. TOM is also building a strong platform to offer telecom value-added services.
(http://corp.tom.com/about/en/index.shtml)
For press enquiries:
Rachel Chan, TOM.COM LIMITED
Tel: (852) 2121 7810
Fax: (852) 2127 7576
Email: rachelc@hk.tom.com
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