Contec Innovations Inc.
TSX VENTURE : BUZ

Contec Innovations Inc.

September 07, 2005 09:01 ET

Contec Signs C$400K Hornet Sales Agreement in China

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 7, 2005) - Contec Innovations (TSX VENTURE:BUZ), a provider of mobile Internet infrastructure software, today announced that Beijing-based King CenturyTone Technology Co. Ltd. ("KCTone"), has chosen Contec's Hornet™ product in a software and services deal valued at approximately C$400,000.

KCTone, a unit of Guangdong Zhongjin Asset Management, will use Hornet, a powerful and flexible mobile service delivery platform, to manage and deliver operator-branded mobile and web-based portal service offerings to a Chinese mobile network operator's subscriber base. Both consumer and enterprise markets will be targeted with the new services, expected to be rolled out later in 2005.

"We have been laying the foundation for operator deployments of Hornet in China for almost 18 months and this sale marks our first major success in that key market," stated Perry Quan, Contec's President. "We look forward to making this first big customer win a cross-China success. It is also great to be involved in the newly emerging mobile enterprise applications, something Hornet is well suited to provide."

The agreement provides KCTone with certain performance-based options to contract additional Hornet systems from Contec for rollouts of the operator's portal applications across additional provincial markets within China. In November 2004, Contec announced a partnership agreement with Guangdong Zhongjin Asset Management to establish a trial installation of Contec's Hornet in China; the subsequent trial and testing was successfully completed earlier this year.

Market overview

The Chinese mobile market, the world's largest, is dominated by two major cellular operators, China Mobile and China Unicom. These operators provide services to a total subscriber base of over 350 million currently and add new subscribers at a rate of approximately 5 million per month. In addition to the cellular providers, wireline incumbents China Telecom and China Netcom each operate extensive limited-mobility networks within the country and are widely expected to participate in 3G deployments.

Monthly text messaging traffic in China is now over 30 billion text messages per month and growing. In addition to providing person-to-person text messaging, value-added messaging, multi-media messaging, Java downloads and mobile Internet access are now being widely deployed in China. Mobile value-added service providers have grown rapidly in the last 5 years leveraging the existing cellular networks and now generate more than US$4 billion a year in annual revenue. As they share in the service revenue as well as collect data traffic revenue, this now represents a significant and growing component to both cellular operators' total business. Contec's Hornet delivers a flexible and scalable application hosting solution that meets these operators' requirements to quickly develop and roll-out branded services to a subscriber base already receptive to mobile data services. In addition, all the Chinese operators have expressed interest in solutions to manage and control the more than 10,000 existing value-added service providers. Hornet is also well-positioned to address this important requirement.

ON BEHALF OF THE BOARD OF DIRECTORS OF CONTEC INNOVATIONS

Don Lay, CEO

About Zhongjin

Guangdong Zhongjin Asset Management Co., Ltd. has been involved in a broad range of businesses, including corporation commissions, asset management, investment consulting, taking a variety of enterprises public and financial consultant services.

Recently initiatives have seen Zhongjin launch a project together with a mobile operator to develop capabilities for wireless data Value-Added Services and electronic business management.

About Contec Innovations

Contec accelerates the growth of the mobile Internet by enabling mobile service providers to capitalize on new data services. Contec's core product, the Hornet™, is an open, carrier-class mobile services delivery platform capable of hosting multiple mobile applications in a secure, scalable environment allowing service providers to generate new revenues by efficiently deploying reliable and compelling data applications. Founded in 1999 and headquartered in Vancouver, Canada, Contec is listed on the TSX Venture Exchange under the symbol "BUZ". For more information, visit www.contec.ca.

The statement made in this press release may contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from the Company's expectations. Hornet™ is a trademark of Contec Innovations Inc.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of the content of the information contained herein.

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