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November 28, 2012

VelaTel Acquires Hong Kong-based China Motion Telecom

VelaTel Global Communications has revealed that it is paying nearly $5.8 million to acquire 100 percent of the capital stock of China Motion Telecom (HK) Limited.

Hong Kong-based mobile virtual network operator (MVNO) China Motion has over 125,000 customers. The company earned $12 million in revenue and $2 million in EBITDA during its fiscal year which ended on March 31, 2012.

As an MVNO, China Motion will gain bulk access to mobile wireless network services from other carriers at wholesale prices. The company markets and delivers the services to retail customers using its own billing support systems, customer service and sales personnel.

VelaTel believes that by acquiring China Motion it will be able to supplement several long term strategic goals. The company intends to first leverage China Motion's access to wholesale voice and data services, which use the wireless network resources of incumbent carriers, to begin deployment of its projects in mainland China for state owned companies NGSN and China Aerospace.

Additionally, the company expects that China Motion's experience and personnel in sales and marketing, customer service and billing solutions provides a platform to serve not only the NGSN and China Aerospace projects, but also VelaTel's expanding networks in Peru, Croatia, and Montenegro.

The company also sees this acquisition as a great opportunity to create tremendous synergies with its Europe-based subsidiary Zapna, which also focuses on long distance and roaming solutions that cater particularly to the frequent international traveler.

“Our management and our investors are very pleased with the China Motion acquisition,” said Colin Tay, president at VelaTel, in a statement adding that not only are the financial terms very favorable from the standpoint of purchase price compared to enterprise value; the real value comes from the synergies with the other divisions and the operational experience that China Motion provides.

VelaTel acquires spectrum assets through acquisition or joint venture relationships. It provides capital, engineering, architectural and construction services related to the build out of wireless broadband telecommunications networks.

Earlier this year, the company’s subsidiary VN Technologies completed an initial round of test trials commissioned by China Mobile (News - Alert).

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Edited by Jamie Epstein
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