Cogo Announces Design Wins for New PTN Network at China Mobile

SHENZHEN, China, March 22 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading platform services provider for the technology and industrial sectors in China, today announced embedded solution design wins within the deployment of China Mobile's new Packet Transmission Network  ("PTN").  Cogo already has PTN solution design wins with several leading domestic telecom equipment manufacturers.

PTN is China Mobile's next-generation technology based on Internet Protocol ("IP") and will replace the operator's existing SONET network.  It is designed to address the continued increase of data traffic by solving bottlenecks on the back-end.  China Mobile anticipates that the growth of TD-SCDMA (3G) subscribers will accelerate data traffic in 2010 and beyond.  USB Modems, net-books, e-readers, mobile home gateways and video surveillance systems are also expected to increase data traffic.

In the first quarter of 2010, China Mobile began deployment of its PTN network with domestic telecom equipment vendors, winning the majority of the total contract value. To date, China Mobile is the only mobile operator in China to begin its PTN deployment; however, China Unicom and China Telecom are expected to follow suit over time. Various estimates indicate that ultimately, the three mobile operators will spend around RMB 3bn ($440m) to deploy their PTN networks nationally.

"We are proud to work hand in hand with some of our oldest and strongest partners in China, including ZTE and Huawei, for the deployment of China Mobile's cutting edge network," commented Jeffrey Kang, CEO of Cogo.  "We believe that the deployment of the PTN network for China Mobile will be a key driver in generating revenue growth for our telecom equipment business in 2010."

"The economic environment in China has continued to improve in 2010, and we are very encouraged by our business pipeline for the first half of this year, "added Mr. Kang.  "We continue to believe that Cogo's overall revenue growth will accelerate meaningfully in 2010 versus 2009 and we expect to see our operating margin expand.  We anticipate new revenue opportunities across all of our business segments, most notably in the areas of Auto Electronics and Smart Meters. Our growth will also be driven by an improved 3G handset environment and the expected HDTV roll-out."

About Cogo Group, Inc.:

Cogo Group, Inc. (Nasdaq: COGO) is a leading provider of customized module and subsystem design solutions in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Cogo leverages these relationships and combines their IP to create designs that Cogo then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Cogo focuses on the telecommunications equipment, digital media and industrial applications end-markets for their embedded solutions while also offering business and engineering services to their large telecommunications equipment vendor customers. Over the last fifteen years, Cogo has grown its customer list to include over 1,400 manufacturers across the telecommunications equipment, digital media and industrial applications markets, covering both multinational Chinese subsidiaries and Chinese domestic companies.

Safe Harbor Statement:

This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in telecommunications equipment businesses and businesses with ZTE and Huawei, which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.

SOURCE Cogo Group, Inc.