China Business overview

Guangzhou Global Telecom, Inc. is a U.S. company that is publicly traded on the NASD OTC_BB under the ticker symbol GZGT.

Guangzhou Global Telecom, Inc. operates in China through Guangzhou Global Telecom Co., Ltd., a wholly owned subsidiary of Global Telecom Holding Limited, which is a wholly owned subsidiary of Guangzhou Global Telecom, Inc.

Current Businesses

Guangzhou Global Telecom is a retailer and distributor of wireless products and services. Operating in Guangzhou, the heart of one of China’s leading commercial and manufacturing regions, Guangzhou Global Telecom has established itself as a leading distributor, having formed partnerships with top Chinese telecom providers China Telecom, China Unicom and China Mobile as well as handset manufacturers Nokia, Rowa, Gionee, and Konka.

The company also currently owns and operates ten retail locations in Guangzhou.

The company has achieved rapid revenue growth since its inception in 2004. In 2005, its first full year in existence, Guangzhou Global Telecom had revenues of $6.7 million. Then in 2006 revenues rose by 91%, to $12.8 million. By 2009, revenues are projected to grow to more than $42 million.

Market Background

China is the world’s largest mobile telecommunications market; 500 million Chinese (37% of the population) use mobile phones. By 2010, it is projected that half of China’s 1.3 billion people will be using mobile phones.

The dollar value of the China mobile market is staggering. Academic models project a total value of $110 billion by 2013, rising to $250 billion by 2023 and $336 billion by 2030, with a subscriber base of 1.2 billion users.

Guangzhou Global Telecom: Perfectly Positioned

Guangzhou Global Telecom is leveraging its unique position in the Chinese market to maximize its advantage going forward. Building on its success as a distributor and retailer, the company is now implementing an aggressive plan to open fixed and virtual retail outlets throughout rural China. These outlets will enable the company to directly sell its current product line as well as mobile phone value-added services and consumer electronics products. Guangzhou Global Telecom’s value-added services will operate exclusively with Guangzhou Global Telecom-distributed products.

Guangzhou Global Telecom’s strategies for future growth include:

  • Opening additional retail locations in China’s underserved rural areas
  • Offering proprietary value-added services
  • Launching the Mobile Messaging Service (MMS) proprietary messaging network

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Guangzhou Office & Shop

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Wuhan Office & Shop

On June 4 ,2007 the company has received its branch business license in Hankou, Wuhan. Wuhan is the capital of Hubei province. According to the statistics, the mobile users in Wuhan were approximately 3,549,200 at the end of 2006, approximately 45.81% of the total population of 7,000,000 in the city. The mobile users increased by 31.2% in 2006. According to statistics, the coverage of mobile users in cities of China is 93%, which is higher than that of Wuhan. As a result, the company believes that it has significant room to develop the business in Wuhan. The Company is planning to seek cooperation with main telecom operators in Wuhan to achieve its quick expansion objective. The company is trying to co- operate or merge with local distributors or companies to maximize our distribution network. The company has already targeted several local retailers as potential partners. “We are extremely excited about our company's prospects with the entrance into the Wuhan market. In the past two weeks we have opened two new markets for the company and we will continue with an aggressive expansion model to capitalize on our existing industry relationships as well as on the fast growing market segments that we operate in,” stated CEO Li Yankuan. “Following the establishment of the Zhengzhou Branch, setting up the Wuhan branch is the second phase of our expansion plan, taking the company into the other provinces in China. During year 2007, the company expects to set up more branches and retailer shops in China to bolster our distribution network. With branches located in different cities around China, the company can understand, with more precision, the market response for each product and services so that we may adjust it to satisfy our customers' need. Currently, most of our revenue is generated from Guangzhou and only one brand is distributing its products through our network into the whole China region. With the expanding network, we can persuade more handsets manufacturers to deliver products through our network. Furthermore, by developing a larger infrastructure, the company will be able to sell more value added services which will increase company margins and give us a competitive advantage over smaller companies in our market,”concluded Li Yankuan.

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Zhengzhou Office & Shop

On May 21 ,2007 the company has set a branch in Zhengzhou, the capital of the Henan province in China. This branch office will operate in the Jinshui District of Zhengzhou. According to published statistics, the number of mobile phone users in Zhengzhou was approximately 4,527,000 at end of September 2006, roughly 63% of total population of the city. The mobile users increased by 1,010,000 during the nine months ended September 2006, which represents a 30% increase for year to year comparison if projected to the whole year of 2006. According to statistics, the coverage of mobile users in Zhengzhou is only 63%, compared to 93% in other major cities of China. Accordingly, the company believes that it has significant room to develop the additional business in Zhengzhou. In addition, the company is planning to work with the main telecom operators in Zhengzhou to achieve quick expansion objective. The company is also trying to co-operate or merge with local distributors or retailers to maximize its distribution network. Setting up Zhengzhou branch will allow the company to expand from Guangzhou into other cities and provinces of China. During 2007, the company expects to set up more branches and retail shops in China to enhance its distribution network. With such retailer shops located in different cities within China, we can understand, with more precision, the market response for each product and service allowing the company to correctly adjust its business model, ensuring customer satisfaction. Currently, most of the company's revenue is generated from Guangzhou and only one brand is distributing its products through our network into the whole China region. With the network, we can persuade more handsets manufacturers to deliver products through our network. Furthermore, by developing a larger infrastructure, the company will be able to sell more value added services which will increase company margins and give us a competitive advantage over smaller companies in our market.

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Shenzhen Office & Shop

Dongguan Office & Shop

Beijing Office & Shop

The company has successfully set up a branch in Beijing, the capital of China. The Beijing branch will be offering wireless products and providing value-added technology services. Beijing, as host city of the Olympic Games in 2008, is the political center of China. It has advantages in both economics and travel, with a population of 17 million, 5.1 million of which is floating. According to statistics, the coverage of mobile users in Beijing was over 100% last year. Ms. Li Yankuan, the CEO of the Company stated, “The setup of the Beijing branch is a crucial step in the integration of our business throughout China. As the capital of China, Beijing is the most developed city in Northern China. Accordingly, we have targeted the city as the most significant place for us to expand our business.”

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  In 2007   New branches:
  Before June   Zhengzhou
  June ~ August   Beijing
  August ~ December   Shenzhen and Dongguan
       
  In 2008   New distribution locations:
  January ~ March   Shanghai
  April ~ June   Wuhan
  July ~ September   Tianjin
  October ~ December   Guangxi

Guangzhou Global Telecom was established in March of 2004. It aims to be a principal distribution agent for China Telecom, China Unicom, and China Mobile, and become the largest sales and distribution centre of mobile phones, mobile phone parts and cards in China.