CellStar Reinforces Strategic Partnership With Investment in Arcoa Communications - Company Business and Marketing

Cambridge Telcom Report, Jan 10, 2000

CellStar Corporation Wednesday announced that it has made an equity investment in Arcoa Communications Co., Ltd., the largest telecommunications retail store chain in Taiwan. This follows the strategic alliance agreement between CellStar and Arcoa signed in April 1999. Under this agreement, CellStar serves as the primary supplier of Motorola-licensed handsets and accessories to Arcoa's retail stores.

"This investment, which constitutes 3.5% of Arcoa's outstanding stock, is an important step for both CellStar and Arcoa. CellStar intends to concentrate its efforts on increasing market share in both cellular handset and activation business in Taiwan. We believe Arcoa's leading position in activation services will be beneficial to CellStar's expansion there," said A.S. Horng, chairman and chief executive officer of CellStar (Asia) Corporation Limited.

Established in 1981, Arcoa Communications Co., Ltd. is the largest telecommunications retail chain in Taiwan with more than 400 stores currently and plans to increase that number to 600 stores in 2000. Arcoa provides comprehensive activation services for major wireless operators in Taiwan. Arcoa's institutional shareholders also include Hikari Tsushin, China Development Industrial Bank, and Central Investment Company, among others.

For Arcoa, CellStar's investment will provide necessary capital to both upgrade and extend its retail store network. Furthermore, working as a team, Arcoa will continue to benefit from CellStar's global expertise in value-added logistics and after-sales services focused on customer needs. For example, retail customers are able to return their handsets for maintenance and repair at any of Arcoa's stores, with the work done by CellStar.

CellStar is a leading global provider of distribution and value-added logistics services to the wireless communications industry, with operations in Latin America, Asia-Pacific, North America and Europe. CellStar facilitates the effective and efficient distribution of handsets and related accessories from leading manufacturers to network operators, agents, resellers, dealers and retailers. In many of its markets, CellStar provides activation services that generate new subscribers for its wireless carrier customers. For the year ended November 30, 1999, the Company had sales of more than $2 billion. Additional information about CellStar may be found on its web site at www.cellstar.com.