Weida Communications, Inc. (OTC Bulletin Board: WDAC.OB), a U.S. managed telecommunications operator in China, announced today that Guangzhou Weida Communications Technology Co., Ltd., of which it has control and a majority profit-sharing interest, has been selected by the Forest Fire Prevention Office of the State Forestry Administration of China as the designated services provider for its nationwide emergency communication system.
During the next two years, Weida will provide the Forest Fire Prevention Office with mobile satellite equipment in the form of three trucks and approximately 180 mobile VSAT backpack units. The trucks will be outfitted with a complete telecom network that will be used when the system is out for a sustained period of time. Weida is to begin developing the system this month, with initial completion scheduled for May 2005. Upon completion, the contract, which includes the sale and leasing of satellite equipment, could generate annual recurring revenue of approximately $1.2 million a year over the next three years.
During emergency situations, ground communication is frequently damaged and disrupted, and therefore, reliable and effective VSAT communication is vital to coordinate involved parties in an effort to reduce life and economic losses. The Forest Fire Prevention Office’s current system, which has not been upgraded in over 12 years, uses outdated two-way radio communication. Weida will provide an upgraded communication system that can send and receive voice, data, Internet and two-way video, which allows for monitoring and assessing emergency situations more effectively. Under the new system, the Internet is utilized to transfer medical data, dispatch equipment requirements and critical information in a more efficient and effective manner. Additionally, Weida will equip the fire towers throughout China with video surveillance devices to more efficiently monitor activity 24 hours a day.
“We selected Weida, over four satellite equipment and service providers, because it was the only company in full compliance with our requirements. Coverage and innovation are important factors for our organization and we believe that Weida, with its technology and experience, is best able to meet these demands,” said Mr. Du YongSheng, head of the Forest Public Security Department of the State Forestry Administration, PRC. “Weida’s products and services were chosen for a number of reasons, including cost-effectiveness, faster setup and connection, more stable performance, higher transmitting speed, user-friendly operation, video broadcasting and a nationwide network. We look forward to working with Weida and believe that the introduction of VSAT technology will prove to be an important one.”
“This is a significant corporate milestone for Weida, as it allows the company to build a solid base to expand in China’s emergency communication market,” said Mitchell Sepaniak, chief executive officer of Weida. “Weida is extremely proud to be working with the Forest Fire Prevention Office and we are pleased to satisfy the requirements of the organization. Our experience and knowledge in the Chinese emergency system played a major role in this contract award. The Company’s breadth of product and service offerings continues to pay dividends as demand for VSAT telecommunications in China continues to be gaining momentum.”
About the State Forestry Administration of China
Equivalent to the U.S. National Parks and Forestry Department, the State Forestry Administration of China is the national government agency of China responsible for policy making and regulating with regard to forestry eco-system environment growth and protection; preparing national forestry development strategy, and managing state forestry fund.
About Weida Communications, Inc.
Weida Communications, Inc. is a U.S.-managed telecommunications services provider that operates in China. The Company holds a majority profit-sharing interest and control of the only private company in China holding a license for bi-directional very-small aperture terminal (VSAT) satellite communications, which provides an attractive telecommunications solution in China with its exploding demand for telecommunications in both dense urban areas and the most remote locations. Weida’s satellite operations in China provide ground-based equipment and related services to support government and corporate applications, including broadband Internet access, remote meter monitoring and mission-critical data back-up systems. For more information, visit the Weida Communications, Inc. Web site at http://www.weida.com/.
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations of the management of Weida Communications, Inc. (the Company) only, and are subject to a number of risk factors and uncertainties, including but not limited to the need for equity financing in order to consummate the acquisition of a legal ownership interest in Guangzhou Weida, limited operating history, Weida Communications’ historical and likely future losses, uncertain regulatory landscape in the People’s Republic of China, fluctuations in quarterly operating results, the Company’s reliance on the provision of VSAT-based communications services for the majority of its revenues, changes in technology and market requirements, decline in demand for the Company’s products, inability to timely develop and introduce new technologies, products and applications, difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel, loss of market share, and pressure on pricing resulting from competition, which could cause the actual results or performance of the Company to differ materially from those described therein. We undertake no obligation to update these forward- looking statements. For a more detailed description of the risk factors and uncertainties affecting the Company, refer to the Company’s reports filed from time to time with the Securities and Exchange Commission, including the information about risk factors provided in Item 1, “Business,” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004, filed with the SEC on October 12, 2004.