Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that it has signed a formal strategic partnership agreement with Tianyi e-Commerce Limited, a wholly owned subsidiary of China Telecom, for the development and marketing of China Telecom's Bestpay m-commerce payment application. Under the agreement, Trunkbow is to provide application development and support services for the Bestpay mobile application, which was rolled-out to China Telecom's nearly 28 million 3G subscribers across mainland China beginning in August 2011.
Trunkbow receives revenue from the Bestpay application on a per-transaction basis, according to government-stipulated terms that vary by industry, and range from 2-4% of the gross value of the end-user's total transaction. In addition, the Company will receive individual commission payments from specific merchants for sales generated through the Bestpay application.
Since the launch of the application, Trunkbow has signed an agreement with a group of online retailers, allowing for the purchase of movie tickets at over 270 theaters nationwide via users' mobile phones. The Company is also negotiating the terms of potential cooperation agreements with several nationwide quick-service restaurant chains and utility providers, which will allow users to pre-order fast food meals or pay utility bills any time, anywhere.
The nationwide launch of the Bestpay mobile application allows China Telecom's 3G subscribers to complete online transactions, including the payment of telephone and other bills, purchase of lottery, movie and event tickets and online gaming "point cards," as well as checking transaction records and account balances using Trunkbow's secure, phone-based application. The Bestpay application is pre-installed on China Telecom's Android-based Tianyi 3G handsets, while users of other devices can download the app either over the air or through China Telecom's website.
Trunkbow and Tianyi will collaborate on the development and expansion of the Bestpay merchant network, as well as marketing of the Bestpay application and service platform to China Telecom's 3G mobile subscribers. In addition, Trunkbow will work with merchants on the development of m-commerce payment applets to further enhance the user experience. These applets will be designed to process specific types of transactions or transactions for specific online and physical merchants, allowing end users to customize Bestpay to most effectively meet their individual needs. Under a separate technology partnership, the Companies have collaborated on the development, beta testing, launch and ongoing support of the core Bestpay application, and will continue working together to support the overall Bestpay ecosystem.
"This agreement provides us with financial contributions through revenue sharing with both China Telecom and individual merchants, while also signifying an important milestone for our MPS business, as it marks the first deployment of our technology with a carrier on a national scale," said Mr. Qiang Li, CEO of Trunkbow. "In addition to our traditional role as an application provider, we will work closely with China Telecom to market Bestpay and drive adoption of the technology through the establishment of partnerships with device manufacturers, retailers and others who can help us best reach 3G mobile users. Smartphone adoption is on the rise in China and tech-savvy consumers are migrating to m-commerce in growing numbers. With first mover advantages and a strong partnership with China's third largest mobile telecom provider, we are in an advantageous position to capitalize on this growth trend."
Mr. Li added, "The national roll-out of Bestpay, which has already been activated on more than 300,000 handsets and processed RMB 6 million of transactions significantly improves Trunkbow's position with regard to merchant acquisition. Our POS-based mobile payment platform is already deployed in 24 provinces through all three major wireless carriers, and with the addition of nationwide application coverage to China Telecom's 28 million 3G subscribers, the benefits of MPS technology, and our solution in particular, immediately become more attractive to merchants. Having taken this important step to expand our MPS footprint, we plan to aggressively ramp our merchant acquisition efforts through the establishment of partnerships with retailers and others. We believe that this strategy will significantly contribute to the expansion of our recurring revenue base, providing Trunkbow with greater stability and visibility in our MPS business, while giving the Company access to a virtually limitless market."
About Trunkbow
Trunkbow International Holdings (NASDAQ: TBOW) is a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in PRC. Trunkbow's solutions enable the telecom operators to offer their subscribers access to unique mobile applications, innovative tools, value-added services that create a superior mobile experience, and as a result generate higher average revenue per user and reduce subscriber churn. Since its inception in 2001, Trunkbow has established a proven track record of innovation, and has developed a significant market presence in both the Mobile Value Added and Mobile Payment solutions markets. Trunkbow supplies its mobile payment solutions to all three Chinese mobile telecom operators, as well as re-sellers, in several provinces of China. For more information, please visit www.trunkbow.com.