Trunkbow Announces Partnership with Shanghai Telecommunication Engineering Co. for Development of Data Center in Shanghai
Companies to offer Cloud-Based MPS Solution and Hosted Services for Small Businesses
BEIJING, June 21, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that its operating subsidiary in China has entered into a cooperation agreement with Shanghai Telecommunication Engineering Co., Ltd ("STE") (Hong Kong Stock Exchange: 0552.HK) for the construction, management and operation of a cloud data center to be located in Shanghai, China. This data center will allow Trunkbow to extend its industry-leading MPS and MVAS services to the cloud, enabling small- and medium-sized businesses ("SMB") to utilize the Company's technology under Software application as Service ("SaaS") and Platform application as Service ("PaaS") models, further expanding the reach of its MPS solutions to a broader range of potential merchant customers.
Under the agreement, Trunkbow will invest approximately RMB180 million (US$28 million) in the 8,262 square meter data center, with STE to provide design and construction services during the initial phase of development. The Company has applied for a government-backed bank loan to finance the construction. Once complete, STE will operate the facility and provide maintenance services through a partnership with China Telecom, with hosting fees to be shared between STE and Trunkbow. We expect to offer a comprehensive suite of Trunkbow-powered, cloud-based services that will provide a hosted MPS solution for both M-commerce and point of sale-based transactions through the data center. This solution will target small- and medium-sized businesses, and will be marketed as an attractive, low-cost option enabling merchants to accept mobile payments online and offline.
"This partnership with STE represents another important step in our efforts to build Trunkbow's MPS presence among merchants and consumers in China. The shared hosting fees will provide an immediate, predictable revenue contribution, while the suite of services offered through this data center will markedly improve our merchant acquisition capabilities, particularly among the SMB market," said Mr. Qiang Li, CEO of Trunkbow. "While the benefits of MPS are clear, small businesses sometimes lack the resources necessary to develop and implement a dedicated M-commerce solution or roll out MPS-enabled terminals at brick-and-mortar locations. This new, hosted solution will make the process of deploying and managing the MPS capability significantly more cost effective, easier to deploy, manage and expand through the addition of both back-end tools and consumer-centric features such as targeted promotions and location-based services. Along with STE, we are dramatically expanding the addressable market among merchants by providing a highly customizable, off-the-shelf MPS solution that will allow them to begin offering customers the pay-by-phone option without a significant long-term commitment or sizeable upfront investment."
Trunkbow expects to begin construction of the new data center in Shanghai in the third quarter of 2012, subject to approval by Trunkbow of the construction budget, and expect to complete the facility within twelve months. Under the revenue sharing agreement with STE, Trunkbow will receive a fixed percentage of the hosting fees paid by merchants for use of the cloud services, with minimum revenue guarantees provided by STE of RMB 304.3 million (US$47.9 million) over the initial ten-year contract term. In addition, Trunkbow will receive transaction fees directly from merchants as they begin using the hosted services.
Trunkbow International Holdings (NASDAQ: TBOW) is a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in PRC. Trunkbow's solutions enable the telecom operators to offer their subscribers access to unique mobile applications, innovative tools, value-added services that create a superior mobile experience, and as a result generate higher average revenue per user and reduce subscriber churn. Since its inception in 2001, Trunkbow has established a proven track record of innovation, and has developed a significant market presence in both the Mobile Value Added and Mobile Payment solutions markets. Trunkbow supplies its mobile payment solutions to all three Chinese mobile telecom operators, as well as re-sellers, in several provinces of China. For more information, please visit http://www.trunkbow.com.
About Shanghai Telecommunication Engineering Co., Ltd
Shanghai Telecommunication Engineering Co., Ltd is a 60 year-old state-owned enterprise engaged in telecommunication construction, design and maintenance and value-added services including OSP, Digital Switching, High/Low Voltage Power supply equipment installation & renovation, HVAC, Digital Transmission, Broadband Infrastructure, Intelligent System Integration, Wireless & Mobile Telecommunication, Microwave Telecommunication, Power Distribution, IT Data platform and mobile payments. The company has over 1,000 employees, with operations in 31 provinces within China, as well as nearly 20 countries and regions in Asia, Europe, Africa, America and Australia. The Company's revenue is over 2 billion RMB per year, including 20% from overseas business.
Safe Harbor Statement
This press release contains forward-looking statements that reflect the Company's current expectations and views of future events that involve known and unknown risks, uncertainties and other factors that may cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward looking statements involve known and unknown risks and uncertainties, including but not limited to uncertainties relating to the Company's relationship with China's major telecom carriers and its resellers, competition from domestic and international companies, changes in technology, contributions from revenue sharing plans and general economic conditions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. You should understand that the Company's actual future results may be materially different from and worse than what the Company expects. Information regarding these risks, uncertainties and other factors is included in the Company's annual report on Form 10-K and other filings with the SEC.
In China: In the U.S.:
Trunkbow International Holdings
Limited The Piacente Group
Ms Alice Ye, Chief Financial
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SOURCE Trunkbow International Holdings Limited