Velatel Global Comm. (fka VELA)

[Krisandtilly]

China: 350,000 Lte Base Stations
Planned for 2014;

How does this impact VelaTel’s 75% owned communications tower fuel cell maker VN Tech?

Since VelaTel’s VN Tech mobile tower fuel cell is

a) The ONLY one approved by both ZTE and the Chinese Ministry of Industry & Information (MIIT)

b) Fully tested and approved by China Mobile and approved as a Communications Industry standard

c) VN Tech is a PRC domiciled subsidiary of VELA

d) MIIT has “requested” that critical base transmission towers (BTSs) have off-grid power back-up without traditional short lived battery back-up…

…It is logical to assume VELA subsidiary VN Tech SHOULD see significant purchase orders from this giant deployment. China Mobile network will be the largest 4G LTE network yet seen -- the operator has more than 700 million existing customers on 2G and 3G networks.

Investors Use “Vie ”
to Structure Telecom Investments.
mobile services will further allow internet content
providers to supply faster and more innovative services
to internet users which will in turn attract more
internet users and commerce via the mobile internet
platform in China. Consequently, foreign investors
are increasingly active in the VATS sector in China.
Internet content provider services cover internet
information services, e-mail service, bulletin board
service and the like. Internet content provider
services supplied for profits are classified as a VATS
and are subject the VATS permit requirement and
foreign ownership restriction, although, as discussed
above, the VIE structure has been commonly used
by foreign investors in relation to the VATS sector.
Conclusion
The Chinese telecommunications industry is one
of the fastest developing markets in the world.
Due to restrictions on foreign investments in the
Chinese telecommunications industry, foreign
investors have adopted the VIE structure to
pursue business opportunities despite the legal
risks associated with such VIE structure.
LTE services are being developed by China Mobile
in China, although it is expected that the full
scale of investments in the LTE service will not
be effectuated until China Mobile, China Telecom
and China Unicom have captured satisfactory
investment returns in relation to 3G services. Given
that LTE will likely be classified as a BTS, it will be
difficult for foreign investors to penetrate into the
Chinese LTE service. However, LTE services are
expected to further nurture the development of
the VATS, particularly in the mobile internet sector
in which foreign investors have actively pursued
business opportunities through the VIE structure.
Jun Wei
Partner, Beijing
T [phone]
[e-mail]
“Given that LTE will likely
be classified as a BTS, it will be
difficult for foreign investors
to penetrate into the Chinese
LTE service”