3/16/00 - Signs Agreement To Provide Internet And Wireless Service To China
GALAXY ONLINE INC ( "GOLI-Z") - Signs Agreement To Provide Internet And Wireless Service To China
Galaxy OnLine Inc. ("GOLI") signed a Memorandum of Agreement with I-Tec Communications ("I-Tec"), Guangdong Advanced Technology Development Co., Ltd. ("GAT"), and Pinnacle Technology, Ltd. Co. ("PT"), to form a joint venture company in the People's Republic of China. The primary focus of the company is to: * Provide high speed and traditional Internet service throughout China * Provide satellite coverage for government and private voice, data and video communications * To implement a voice over IP infrastructure for improved communication within China * To jointly explore other e-commerce opportunities in China
GOLI has signed a memorandum of agreement to acquire 45% of the outstanding shares of Calgary, Alberta based I-Tec, a privately held international business services company specializing in business support services for local and traveling business persons. As part of the transaction, GOLI will gain a 50+% share of the voting rights in the Company. GOLI will issue 312,000 shares to the shareholders of I-Tec on completion of the transaction. Purchase price payable for the shares shall be $250,000. The transaction between GOLI and I-TEC is completely at arms length.
GOLI / ITEC will be the provider of communications technology that will allow high-speed satellite, wireless, and landwire Internet access. The agreement calls for I-Tec to be the marketing arm of Internet access services by GOLI in China. "This opportunity allows GOLI / ITEC to provide the technology and management operations to help China achieve their goals for rapid but controlled deployment of Internet services in-country. We are honored to become a participant in this important mission," stated Glen Kaiser, President of the GOLI / ITEC joint venture.
GOLI / ITEC's China based partners bring considerable experience and expertise to the joint venture. Guangdong Advanced Technology ("GAT"), a privately Chinese owned and based corporation, specializes in the marketing of technology and technology services. Pinnacle Technology ("PT"), a privately Chinese owned and based corporation, engages in the business of providing technology related services in China and has extensive experience and goodwill with several infrastructure providers. GAT and PT, as part of the agreement, will form a wholly Chinese owned company that will perform their obligations under the agreement to provide Internet service in China via satellite, wireless and landwire.
A joint venture company will be formed with 49% owned by GOLI and 51% owned by the Chinese Companies. GOLI opened an office in Hong Kong on February 28, 2000, in affiliation with "mwired", a Montgomery-Watson Company. GOLI will open two additional offices in the next 30 days in Beijing and Guangzhou, in the province of Guangdong. "The Guangdong Province is home to 50% of China's total number of Infotech and Telecom businesses. As a regional communications hub, Hong Kong plays an active, complementary role in China's information technology sector. Direct local representation is critical to the success of our international business strategy," said Dan Shaffer, Director of Marketing for GOLI.
GOLI / ITEC will be responsible for all business relationships in China, maintaining contacts with various established partners and ensuring that the contracts are completed. GOLI will be the provider of technical and management support for Internet and wireless phone services in China. The services include providing Internet Backbone connectivity for the existing infrastructure, cellular phone systems, Virtual Private Networking (VPN) for government and private organizations, Voice over IP (VoIP), International banking services, and additional telecommunications services as deemed appropriate.
GOLI / ITEC, pursuant to the Agreement, will initially install two Internet POPs (points of presence). The first POP will be placed in the Guangdong Province, and the second POP will be located in Beijing. Both points of presence are to be installed and operating pursuant to the Agreement by September 30, 2000. The service will be "Content Filtered" per government specifications and be delivered via high-speed and traditional dial-up Internet service. High speed fixed wireless capabilities will be utilized by applying the Internet access technologies supplied by Moby Dark, which Galaxy OnLine Inc has agreed to acquire. "The integration of the current four core products from Moby Dark into the GOLI China ISP strategy provides the capability for expanding our coverage areas in a quick and efficient manner. The fixed wireless product can provide DSL comparable speeds, regardless of the quality of the existing telephony infrastructure. The integration of fixed wireless and satellite technology together allows us to completely bypass the existing telephony infrastructure and provide rapid penetration into both rural and metropolitan areas. As a value added service, both traditional voice traffic and Internet services can be provided from the same fixed wireless technology," said Jim Eiteljorg, Chairman of Galaxy OnLine Inc.
High Technology in China
The following information was paraphrased from information prepared for the Canadian Embassy in Beijing by BDA (China) Limited. The complete work can be viewed online at canada.org.hk.
China is the world's third-largest telecom market and enjoys the fastest growth. Every year, China's network increases more than the equivalent of the entire Canadian network. By the end of 1998, subscribers surged from 85 to 110 million including 25 million mobile phone users, for a national penetration rate of 10.64 percent, with 27.7 percent in urban areas. In 1999, total switching is estimated to increase by 23 million lines to exceed 150 million. The government's objective for the year 2000 is to have 170 million lines with a national penetration rate of 13 percent, and reaching between 35 to 40 percent in urban areas. By 2020, teledensity is expected to top 40 percent.
It is estimated that China will spend more than $50 billion over the next five years on telecommunications and network infrastructure. The traditional telephone infrastructure sector will remain a pillar of Canadian exports to China, particularly in the context of the rapid development of the GSM network, trunk lines and rural telecommunications.
South China, including the provinces of Guangdong, Fujian and Hainan, as well as the Guangxi Autonomous Region, is one of the most economically dynamic regions in China. With a population of over 160 million, South China has been the recipient of over 50 percent of the foreign investment into China over the past 20 years. The region boasts almost half of the nation's imports, and the highest income levels in the country, making it an enticing market for exporters and investors. All of the five national Special Economic Zones (SEZs) are located in South China. SEZs were set up by the central government not only to attract investment, but also to provide experience with experimental policies. Guangdong province has one of the most advanced distribution systems in the country, with a thriving retail sector. Guangdong is the wealthiest consumer market in China and is the province with the highest income levels, the most cellular phones, the most privately owned automobiles, the greatest volume of imported products, and the greatest amount of foreign investment. South China is the destination of 47 percent of the nation's total imports. The Pearl River Delta region, centered around the provincial capital, Guangzhou (formerly known as "Canton"), and anchored by Macau and Hong Kong, includes over 10 highly industrious cities, each with populations equal to or greater than that of Toronto.
About Galaxy OnLine
Galaxy OnLine Inc., d.b.a. Galaxy Internet, (http://www.galaxyinternet.net) is an Internet Access and Services provider specializing in delivery of high quality Internet access to rural and metropolitan areas. Galaxy Internet also provides a co-branded "Powered by Galaxy" connectivity solution for technology companies, media companies, school systems, and entrepreneurs. Moby Dark, a Galaxy OnLine Inc. Company, is focused on the state of the art research and development of wireless solutions and other embedded products. The "MDZ Wireless Router" provides high-speed wireless TCP/IP connectivity. Moby Dark's "LIFE.stre.am" provides high-resolution video and MP3 quality audio over the Internet with substantially smaller bandwidth requirements than competing solutions. Galaxy OnLine is positioned through partnerships with top level hardware, software, and infrastructure companies to offer affordable high speed internet access via bi-directional satellite, wireless, and traditional landwire.
Galaxy OnLine Inc. is presently in the process of installing ISP "Points of Presence" in the Midwest, Southeastern states, Ontario, and China offering service to many areas that until now had limited or no Internet access available. The Company plans to make Internet access available to additional regions in the US, Canada, China, Caribbean, and Central and South Americas. Galaxy OnLine Inc. has 55,093,118 shares outstanding and is currently quoted on the Canadian Dealing Network (CDN) under the symbol GOLI, (CUSIP 36318D102).
This press release was prepared by Galaxy OnLine Inc., which accepts the responsibility as to its accuracy. No regulatory authorities or similar body have approved or disapproved the information contained herein. The Company relies on litigation protection for "forward looking" statements.
For a copy of the map contact the company. TEL: (416) 861-1031 Galaxy OnLine: Glen Kaiser President / COO 390
Ken Taylor Board Member and
Advisor TEL: (317) 802-3985 Dan Shaffer Director of Marketing / Investor
Relations E-mail: dshaffer@galaxyinternet.net Internet: galaxyinternet.net Internet: home.galaxyinternet.net
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