Yangtze Telecom Corp.

Yangtze Telecom Corp.

July 25, 2005 19:18 ET

Yangtze Telecom Provides Corporate Updates

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 25, 2005) - Yangtze Telecom Corp. (TSX VENTURE:SMS) (the "Company") has decided to exit the SMS business to focus on the Credit Management, and Distance Learning businesses of its subsidiary China United Telecom Technology Company Ltd. ("UTT"), and the Voice Information Services business of its subsidiary Wuhan Chengxi Information Technology Co. ("Chengxi"). Due to unexpected regulatory changes in China since early 2004, the SMS business of Chengxi has incurred serious losses over the past fiscal year and such losses have continued to be incurred. The board of the directors of the Company unanimously approved Chengxi's immediate exit from SMS to focus on its other existing lines of business. The Company is also looking for new acquisition opportunities within the telecom industry in China, which ranks No. 1 in the world with over 700 million telephones in operation and 100 million Internet users across the country. UTT exited from the SMS business earlier this year to focus on its high potential Credit Management business, and Distance Learning.

Paul Deng, the Chairman and CEO of the Company, commented, "while it was sentimentally difficult to get out of the SMS business after committing resources and working so hard at it, we realized it was not in Yangtze's or the shareholders' best interests to continue with an unprofitable business that could not be turned around. Management will now be able to devote more time and resources to its other exciting and promising businesses as well as consider new acquisitions."

About Yangtze Telecom Corp.

Yangtze Telecom Corp. is focused on developing and implementing business and consumer applications utilizing a combination of voice, the Internet and wireless data communication technologies. The significant applications developed to date are the Credit Management System, Distance Learning business and Voice Information Services.

Paul Deng, Chairman and CEO

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of, the contents of this press release.

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