ASIA China : PacificNet announced that its Chairman and CEO, Tony Tong, Victor Tong, President, and Super Wang, General Manager of PacificNet's Guangzhou 3G subsidiary, discussed its 3G strategy while attending the 3G Showcase at ITU Telecom World 2006 (http://www.ITU.int/WORLD2006/).

Inset is Tony Tong quoted.

ITU Telecom World is the largest telecom conference and expo in the world and is hosted at the AsiaWorld-Expo, Hong Kong, from December 4-8, and is sponsored by the International Telecommunications Union (ITU) and attended by all of the major telecom leaders of the world.

Commenting on the status of the long anticipated issuance of 3G licenses in China, Mr. Wang Xudong, China's minister of the information industry, announced at the ITU Telecom World 2006 that China will issue 3G licenses "very soon", and reiterated a commitment to enable operators to offer 3G services during the 2008 Olympic Games in Beijing. Mr. Zuo Xunsheng, CEO of China Netcom (CN) also declared at the ITU that China Netcom and China Telecom (CHA) could receive the 3G licenses as early as February 2007. In addition, Mr. Chen Wu, VP of China Unicom Macau Branch, announced at the ITU that Macau Unicom plans to launch 3G services in Macau in the second quarter of 2007.

With the long anticipated issuance of 3G licenses in China, the ITU Telecom World 2006 draws a lot of attention from industry leaders, telecom experts, telecom scholars, and government officials involved with 3G services. These include China's Ministry of Information Industry (MII), China Mobile, China Unicom, China Telecom, China Netcom, Huawei, ZTE, DaTang's TD-SCDMA, Qualcom, Nokia, Motorola, Samsung, NMS, and leading hardware vendors, handset providers, content providers, and value-added service provides involved in the 3G industry value-chain. 3G services enable video calls, faster data downloading speeds and mobile Internet access.

Mr. Tony Tong, Chairman of PacificNet, discussed the company's 3G value-added service offerings with the imminent roll-out of 3G services in China by its telco partners. Mr. Tong stated, "As discussed by China's leading government and telecom leaders at the ITU this week, we expect that the Chinese government will officially grant the 3G licenses within a few months and we are sure there will be 3G networks operational in the main cities before the Olympics in 2008, or even earlier. We welcome the imminent arrival of 3G services in China. No matter who gets the 3G licenses, PacificNet will benefit because we have good working relationships with all four of the major telecom operators in China: China Mobile, China Unicom, China Telecom and China Netcom."

PacificNet has been an active player involved in providing value-added telecom services, mobile games, mobile applications, and CRM services in China, the world's largest mobile user base with about 400 million mobile users. With China's anticipated 3G launch, the stakes are high and the opportunities are immense for new 3G value-added services. Telecom users in China can experience our iPACT VAS through our broad geographical presence and local VAS offerings in 27 provinces in China through our VAS operating subsidiaries including Guangzhou 3G, Clickcom, and Wanrong. We look forward to the launch of 3G services in China as we expect it will drive the demand for PacificNet's iPACT, mobile games, CRM, IVR, and VAS services. We are well positioned to capture the business opportunities in China's future 3G services market.

PacificNet recently signed an agreement with China Unicom to become one of the designated value-added short message services (SMS) providers for Uni- Info, a recently launched mobile information service to service mass market China mobile users. Uni-Info is an SMS-based information subscription and delivery-on-demand service launched by China Unicom and is now available to its GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access) phone users. Its content offerings include a wide variety of services such as entertainment and financial information, as well as interactive gaming and dating, enabling its subscribers to enjoy the convenience and access to first-hand information via SMS in over 20 cities and provinces in China.

PacificNet has also been a long term CRM service provider for China Telecom in providing Customer Relationship Management (CRM) consulting, telemarketing management and call center training services. China Telecom has selected PacificNet for multiple and on-going projects to enhance the CRM service level and telemarketing management capability of China Telecom's customer service center called the "10000 Information Hotline."

PacificNet's MOABC.com is a leading mobile internet portal in China with 11 million registered users and boasts one of the top-ranked mobile internet sites, featuring mobile social networking services (SNS), mobile games, and entertainment. This free WAP portal provides a variety of mobile internet services such as news, mobile gaming and entertainment services, mobile blogs, mobile email (Mo-Mail), Avatar and virtual pets, mobile online dating, mobile instant messaging, virtual communities, mobile social community and virtual showrooms to China's increasing mobile phone and internet user base.

"With the early success of our mobile WAP portal services in China, we believe the market potential is strong for our WAP.MOABC.COM mobile portal and community, especially in light of the impending launch of 3G services in China," said Victor Tong, President of PacificNet. "With over 11 million registered users, we believe that our fun and entertaining mobile portal and sizable user-base will contribute positively to PacificNet's overall strategy in mobile gaming and e-commerce. With China being the largest and fastest growing telecom market in the world, with over 400 million mobile subscribers, we believe that our strong experience in mobile social networking services (SNS) and mobile games will contribute positively to PacificNet's growing CRM and gaming service network in China and Macau."

According to industry reports, there are currently 151 3G license holders operating in 56 countries and 207 3G-networks globally, serving a total of 200 million 3G users worldwide. In Asia, 3G subscribers have reached a market share of 38% while 62% of the total mobile subscribers are 3G enabled in Japan and Korea, respectively. According to estimates, the total anticipated 3G market size in China will reach RMB 285 billion (US$35.6 billion) within 5 years after the launch of 3G in China, creating about 30 million new jobs annually in China's 3G services market. According to recent industry reports by CCID and DoNews, 3G Killer Apps will concentrate on the 3Gs: Games, Gambling and Girls, as mobile online games will become vastly more popular with the launch of 3G networks in China. Forecasts frequently note that online and offline mobile gaming differs greatly in terms of their service models. Online gaming uses a telecom service model earning revenues from traffic fees during play, while offline mobile gaming is simply a game application downloaded onto a handset for a small fee. The forecasts predict strong growth for WAP, JAVA and BREW, while the proportion of SMS-enabled games will drop. With over 400 million mobile phone users, China has already become the largest mobile population in the world. Moreover, the number of mobile users is still growing rapidly and has far exceeded the number of PC-based internet users, which is about 120 million, in China.

About ITU and China's 3G Standards

The International Telecommunication Union (ITU) is an international organization established to standardize and regulate international radio and telecommunications. It was founded as the International Telegraph Union in Paris in May 17, 1865, and today is the world's oldest international organization. ITU, headquartered in Geneva, Switzerland is an international organization within the United Nations System where governments and the private sector coordinate global telecom networks and services. Its main tasks include standardization, allocation of the radio spectrum, and organizing interconnection arrangements between different countries to allow international phone calls.

3G (or 3-G) is short for third-generation technology. The services associated with 3G provide the ability to transfer both voice data (a telephone call) and non-voice data (such as downloading information, exchanging email, and instant messaging) simultaneously. In marketing 3G services, video telephony has often been used as the killer application for 3G. The European flavor of 3G is called W-CDMA, a technology with the backing of Nokia and Ericsson; a version used by some U.S. carriers is called CDMA 1000x; and China's is called TD-SCDMA. TD-SCDMA (Time-Division Synchronous Code-Division Multiple Access) is a 3G mobile telecom technology standard that has been submitted to the ITU by the Chinese government. In May 2000, the International Telecommunication Union (ITU) approved TD-SCDMA as a global 3G standard. Since then, China's domestic vendors, for the first time, have control of a telecommunications industry standard, and bears the responsibility of nurturing the technology's development to compete against WCDMA and CDMA2000 1x EV-DO in China's 3G market. Domestic control of TD-SCDMA means greater autonomy and potentially lower costs for domestic vendors and operators. Currently, TD-SCDMA, WCDMA and CDMA2000 1X EV-DO, are the 3G standards to be launched in China. With the full support of the Chinese government and the TD-SCDMA Industry Alliance (TDIA), TD-SCDMA is well positioned to compete in the China 3G market.

TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) is a 3G mobile telecommunications standard, being pursued in the People's Republic of China by the Chinese Academy of Telecommunications Technology (CATT), Datang and Siemens AG, in an attempt to develop home-grown technology. On January 20, 2006, the Ministry of Information Industry of the People's Republic of China formally announced that TD-SCDMA is the country's standard of 3G mobile telecommunication.

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