-- Intense competition, weak profit growth

The following table shows key indicators of the three carriers' business performances in the third quarter of this year. Main indicators of China's three carriers' operating performances in Q3, 2009 China Mobile China Telecom China Unicom Operating revenue (bln yuan) 114.064 52.194 38.492 EBITDA (bln yuan) 57.824 20.217 14.53 EBITDA margin (%) 50.7 38.7 37.7 Net profit (bln yuan) 28.606 2.98 1.872 Net profit rate (%) 25.1 5.7 4.9 Mobile service subscribers (mln) 508.37 46.78 142.8 (Source: Quarterly report of the telecom operators)

China Telecom reported operating revenue of 154.75 billion yuan in the first three quarters, up 15.3 percent year on year. Its EBITDA and net profits were respectively 65.57 billion yuan and 11.39 billion yuan, down 3.9 percent and 33.9 percent from the same period last year.

According to BOCOM International Holdings (BOCOM International), China Telecom's significantly fallen net profit was induced by sharply increased costs for network operation support and sales management, a repeat from the first half.

The following Chart 1 shows key indicators of China Telecom's operating performance in the first three quarters.

China Unicom achieved operating revenue of 114.93 billion yuan from January to September, including 111.82 billion yuan from communications service, accounting for 74.1 percent of the total in 2008. The profit was 9.34 billion yuan, representing 1.19 times of 2008's total.

China Unicom and Spanish telecom operator Telefonica de Espana signed a share swap contract valuing one million US dollars on September 6. By the third quarter of this year, the recognized fair value of swap contract triggered by the growth of Telefonica's share price was 960 million dollars, which greatly contributed to the carrier's performance growth.

The following Chart 2 shows key indicators of China Unicom's operating performance in the first nine months.

Both China Telecom and China Unicom saw their net profits lower resulting from their scale construction of mobile networks this year. Besides, with the intensification of industrial competition, the telecom operators' sales and market promotion expenditures are continuing to increase.

Brokers held that with the continuous investment into 3G business and equipment depreciation, the carriers' profits will continue falling until 2010. In comparison, operating revenue shows telecom operators' improved performances, and that the three maintained stable growth.

Another factor to have dragged down the performances of China Unicom and China Telecom was the Personal Handyphone System (PHS) which is gradually fading from the market. According to statistics released by the Ministry of Industry and Information Technology, China lost 2.35 million PHS subscribers in September, hitting a historical high in a single month.

Since China Telecom didn't reveal individual department performances, BOCOM International showed worries about the deterioration of the carrier's fixed-phone service and sluggish mobile phone business.

China Mobile returned to smooth performance after a second quarter drop. The telecom giant respectively registered operating revenue and net profit of 326.98 billion yuan and 83.94 billion yuan in the first three quarters, up 8.9 percent and 1.8 percent year on year. The firm's net profit rate remained high at 25.7 percent.

The following Chart 3 shows major indicators of China Mobile's operating performance in the first nine months.

The year-on-year growths of China Telecom's operating income in quarter terms were respectively 15.1 percent, 14.5 percent, and 16.4 percent; while China Mobile's operating income grew 8.9 percent on year in the first half and remained stable over the first three quarters.

China Mobile's average revenue per user (ARPU) dropped to 75 yuan from 90 yuan earned a few years ago, and usage per minute declined from 0.154 yuan per minute in the first half to 0.153 yuan from January to September.

According to an S&P report, the decline was induced by rapid growth of the user base in low-price rural regions, and pricing pressure from competitors' expanding market shares. In the third quarter of this year, China Mobile cut international roaming fees, as well as those in Hong Kong, Macao, and Taiwan, with the average price more than halving.

Industrial competition among telecom operators has become increasingly intense under high market concentration. Intensified competition is making it more difficult for firms to achieve high profitability. But in the long run, competitive pressure will force firms into innovating, exploiting market potential, enhancing industrial chain cooperation, and increase the efficiency of management, operations and marketing. This will help the telecom industry enjoy longer-term prosperity.

-- 3G effects starting paying off

China Mobile's average additional users per month in the first three quarters of this year reached 5.68 million, taking the industries' lead. But since subscribers to its paramount 3G services merely increased to 1.66 million by the end of September, it might be difficult for the carrier to hit the yearend target of three million users.

The telecom giant depends on its existing resources to boost its homegrown TD-SCDMA (TD) 3G business. BOCOM International said China Mobile's promotion of the OPhone operating system and the online application store Mobile Market aims at protecting the user base.

Shenyin & Wanguo Securities pointed out that because of TD's disadvantage in 3G networks, few great handsets, and slow network construction, high-end users will migrate to other 3G networks. China Mobile will continuously leak market share to the other two firms.

China Unicom's 3G business was not taken into consideration as the business was rolled out on October 1. The firm's general manager Lu Yimin said on October 30 that its 3G user base exceeded one million in one month.

Guosen Securities held that since a number of key mobile phone sales channels are selling 3G cell phones, including the iPhone, China Unicom's additional 3G users will increase faster with the entire industry's help, and its 3G user base is likely to top three million by the yearend. Meanwhile, China Unicom is expected to attract some mid- and high-end users, raising its average ARPU.

But Guotai & Junan said that China Unicom's iPhone service package's high prices and lacking WiFi functionality may deaden user passions.

China Telecom added 7.5 million mobile service subscribers in the third quarter, boosting the total number to 46.78 million. At present, the carrier's share in terms of additional users increased from 12 percent in January to around 30 percent in September, showing a prosperous trend. But in comparison with the first half, China Telecom's ARPU in the third quarter was slightly down, and the minutes of usage (MOU) declined 0.4 percent on quarter to 330 minutes, revealing that the net additional users are mostly of low-end.

Broker reports said that the robust growth of China Telecom's new subscription counts are due to its outstanding marketing capacity and bundling sales strategy, but the telecom operator is disadvantaged in cell phones in terms of the price and models, and weak third-party sales channels may obstruct its CDMA services from developing further.

-- Growth of value added services slows

Since 3G value added services lack popular applications, and competition of 2G value added services is becoming increasingly intensive, the development of such services faces new challenges.

Statistics show that China Mobile's value added service subscribers were 459 million, about the same as last year. Because of fierce competition in the additional user market and a large user base, the user number growth of China Mobile's value added services such as wireless music and multimedia messaging slowed. This may dry up business revenue and force it to develop new growth points.

But the usage of China Mobile's text messaging services increased 12.9 percent year on year, achieved continuous growth on the basis of an already great user base, but no other value added service is capable of matching the success of text messaging services.

China Unicom's local fixed-phone users rebounded from net loss of 482,000 in August to a net growth of 508,000, representing the effectiveness of the carrier's bundling service strategy.

Securities broker Mainfirst said that China Unicom's wireless cell phone service revenue increased 10 percent quarter on quarter from July to September, higher than the 9 percent of China Mobile. The former's MOU and ARPU of the service respectively increased 7.3 percent and 1 percent on year, comparing to China Mobile's 6 percent and negative 8 percent over the same period, indicating that China Unicom's strategy for acquiring high-end users has taken effect.

Update to Shareholders

    --  China M & A Strategy- As previously announced, the Company recently
        acquired Sino Beyond Limited, a Hong Kong company. This company will be
        utilized to acquire additional companies in China. CHVC has also engaged
        Hong Kong accounting firm, BDO Limited, to certify the company's value
        so that it can engage targeted acquisitions in China.
    --  Technology Solutions required for CandidSoft Contract Deployments-
        Beijing CandidSoft Technology Co. Ltd. has signed an agreement with
        Borde Solutions Pte. Ltd. of Singapore whereby Borde shall supply the
        Borde - Hybrid Wireless Solution to CandidSoft's broadband connectivity
        provider for the Company's government and large enterprise contracts.
        The Borde system is an integrated edge device to provision wireless
        access and connectivity including QoS, Filtering and Virus/Spam. The
        device supports wired cable connectivity as well as wireless 3G and WiFi
        or WiMax. Borde's devices are currently being evaluated and certified by
        China Unicom Ltd. After this approval, the Company will apply for
        China's MII certification as well.  The Company expects this device to
        enable use of China Mobile and China Unicom's 3G wireless networks as
        well as resolve many China internet quality issues that the Company has
        experienced in the past. This device does not replace the Company's use
        of InterEdge Technologies VoIP end devices used for SKY O/A Office
        Automation with integrated Digital Voice.
    --  Large Logistics Company Focus- During 2009, CandidSoft has focused on
        providing solutions to large logistics companies because of its success
        during the first phase of its agreement with previously announced
        SuperBig Logistics Co. The Company is currently in the final planning
        stage of Phase 2 of the SuperBig Enterprise IT Modernization Contract,
        which is projected to be $10 Million in revenue and has also signed a
        Letter of Intent with Wantong Logistics, another large Chinese logistics
        company.
    --  Advance to the OTCBB- CHVC as a fully reporting company is being
        sponsored by a Market Maker to become approved for quotation on the
        OTCBB market. The Company is currently working through the OTCBB
        approval process.
    --  Q-Chat teleconferencing application- This application that was developed
        by CandidSoft for China Unicom's (CUC) SCDMA cellular network in GuangXi
        Autonomous Region and previously announced on March 03, 2009, continues
        to support over 400,000 users. To date, CUC has not expanded this
        application into other markets.

    --  China Contract Installations - The Company has experienced major delays
        in installation of its contracts, due primarily to the China Netcom and
        China Unicom merger, which was completed in May of this year. CHVC
        remains optimistic that with the support agreements signed with China
        Unicom and China Mobile, as well as the agreement with Borde Solutions,
        that it will be in a much better position to overcome the many obstacles
        it has experienced during this year. Based on this positive direction,
        CHVC believes that it will start realizing additional revenue from its
        contracts sometime in December of this year.

China Voice Holding Corp. ("CHVC") is a U.S. publicly-traded holding company headquartered in South Florida with a portfolio of next-generation communications products and services doing business in the People's Republic of China. Through its subsidiaries, the Company provides Voice over Internet Protocol ("VoIP") telephone services, office automation, wireless broadband, unified messaging, video conferencing, mobility services and other advanced voice and data services in China, where the Company has obtained full legal status as a licensed telecommunications company. CHVC's focus is on providing its innovative and proprietary voice and data solutions to government agencies and large enterprises in China. China Voice Holding Corp. trades Over-the-Counter and is listed in the Pink Sheets under the symbol "CHVC". CHVC has become a fully reporting company and files required financial and disclosure reports with the SEC. The Company is progressing through the process for quotation on the OTCBB and expects to move to this market in the near future. Additional information may be found at www.chvc.com.

Forward-Looking Statements

The foregoing, including any discussion regarding the Company's future prospects, contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve numerous risks and uncertainties, including, but not limited to risks and uncertainties associated with economic conditions in the telecommunications industry, particularly in the principal industry sectors served by the Company; risks and uncertainties inherent in the operation of businesses outside the United States; changes in customer requirements and in the volume of sales to principal customers; the ability of the Company to assimilate acquired businesses and to achieve the anticipated benefits of such acquisitions; competition and technological change; and the ability of the Company to control operating costs and maintain satisfactory relationships with existing and potential vendors. The Company's actual results of operations may differ significantly from those contemplated by any forward-looking statements as a result of these and other factors, including factors that may be set forth in the Company's anticipated filings with the Securities and Exchange Commission.

    China Voice Investor Contact:
    The Eversull Group, Inc.
    Jack Eversull
    972-378-7917 or 972-571-1624
    972-378-7981 (fax)
    jack@theeversullgroup.com
    ir@chvcmail.com

SOURCE China Voice Holding Corporation

http://www.chvc.com

"mInfo is delighted to have been selected after such a rigorous evaluation process to deliver and operate this important capability in China Mobile's SNS offering," said Alvin Wang Graylin, mInfo, CEO. "We will work diligently to deliver a highly intuitive and effective search experience for both China Mobile and its vast pool of subscribers."

In winning the 139 partnership, mInfo had beaten out other notable contenders which included both giants of the internet search space and mobile focused search providers. mInfo has proven once again that it has the most advanced mobile search technology with the deepest execution capabilities in its field. mInfo has offered mobile search services in China for over four years, and has separated itself as the clear market leader based on a recent report from leading analyst firm Analysys International.

mInfo was also selected by China Telecom earlier this year to power its 118114 QuanNengSou (Omni-search) service. Last year, BOCOG had also called on mInfo to deliver its official mobile search platform for the 2008 Olympics.

About 139.com

139.com is a subsidiary of China Mobile Ltd. focused on building a reliable mobile internet home where every mobile subscriber can freely share and communicate with each other in a trusted environment.

139.com is designed to optimize the user experience of the SNS community while accessing it through a wireless phone. It certainly provides basic SNS function like personal space, photo sharing, joining groups and developing relationships, as well as mobile-only functions that are not available through standard internet SNS sites which utilize the unique capabilities of China Mobile's advanced wireless network. Our users will even receive special access to freely message each other via mobile messaging (SMS/MMS), free high- capacity network drives to store information, live mobile chat, exclusive content and mobile contact management, etc. We will open the door to a new world of mobile community for China's wireless generation.

About mInfo(R) Inc.

mInfo Inc. is a leading provider of mobile search services to China's 720 million wireless subscribers and the leading provider of mobile pull- advertising solutions for branded and SME advertisers throughout China. mInfo operates both the mInfo and Guanxi(TM) brands of search services. mInfo delivers advanced mobile search solutions on all three major carriers in China via SMS, WAP, Instant Messenger, and embedded clients. mInfo's mobile search services are based on patent-pending natural language and personalization technologies, making its services truly intuitive to use and its search results highly relevant. mInfo was founded in early 2005 and headquartered in Shanghai, with offices in Beijing, Guangzhou, Chengdu, and Seattle. For more information, please visit: http://www.minfo.com .

SOURCE mInfo Inc.

http://www.minfo.com

A Sino Market Research report indicates that the high-profile debut of OPhone serves as clear evidence China Mobile has further tightened its control over the industry chain by extending its reach into up-and-downstream of the industry.

And the rally in TD handset sales reflects that China Mobile is seeing a breaking point in TD marketing and portrays as a major stride forward for the Chinese carrier's long-term strategy.

Samsung, ZTE, and CoolPad were the top three suppliers of TD handsets to China Mobile in September. It is worth noting that Chinese domestic TD handset makers' market shares exceeded 55%.

Led by ZTE and CoolPad, Chinese TD handset makers have come a long way in improving the cost performance and increasing the selection of their TD mobile phones in the past year.

In September alone, handset makers such as CoolPad, Samsung, Lenovo, and ZTE came up with some ten TD models, providing China Mobile subscribers with more choices.

Gu Yong, director at the marketing department of CoolPad, expects China Mobile's TD handset sales to reach 500,000 by the yearend.

China Mobile launched TD-SCDMA trial operations in early April 2008 and attracted 52,000 subscribers as of July 1. However, of that number, only 8,000 were substantial subscribers whereas the remaining were trial users provided by China Mobile with SIM cards, TD-SCDMA handsets and subsidies for communication charges.

China Mobile has started to contact local mobile phone stores to open sales channels for TD terminals and more than 400 sales outlets in Beijing and more than 160 stores in Shenyang will soon participate in sales of TD-SCDMA terminals.

Reflecting heightened competition in the mobile landscape, China Mobile said it will continue to increase its investments in sales channels, customer service, network optimization and research and development to enhance its competitiveness.

(USD 1 = CNY 6.83)

Source: www.hexun.com (October 28, 2009)