Charm Communications Signs Joint Venture Agreement With Leading Digital TV Operator to Explore New Media Advertising Opportunities

Joint Venture with Wasu Digital Group to Capture Potential Presented by China's Three-Network Convergence

Oct 18, 2010, 09:00 ET from Charm Communications Inc.

BEIJING, Oct. 18 /PRNewswire-Asia-FirstCall/ -- Charm Communications Inc. (Nasdaq: CHRM) ("Charm" or the "Company"), a leading advertising agency in China, today announced that it has signed a cooperation agreement to establish a joint venture with Wasu Digital Group ("Wasu"). Wasu is China's largest operator and digital content provider for cable TV, 3G mobile TV and broadband TV and a supplier of IPTV services. Wasu is also one of three national operators, alongside China Central Television ("CCTV") and Shanghai Media Group ("SMG"), to receive licenses to operate across IPTV, 3G mobile TV and broadband TV networks as part of China's three-network convergence.

The joint venture will be 49% owned by Charm and 51% owned by Wasu and will have the right to operate all advertising-related businesses across Wasu's three-network platform for 20 years. The joint venture, with Charm as its advertising agency, will seek to develop and set the advertising industry standards on these new media network platforms, including the development of advertising products, product pricing, sales strategy, promotional materials as well as the development of advertising sales and agency policies.

"With the implementation of China's three-network convergence plan, China's digital media revolution including IPTV, 3G mobile TV, and broadband TV is at an inflection point in terms of technology development, content and advertising," commented Mr. Qiang Cao, chairman of Wasu Digital Group. "As a pioneer in the development of new digital media, Wasu has grown into China's largest operator and digital content provider for cable TV, 3G mobile TV and broadband TV. As one of only three operators to have been granted the National Integrated Operation License, Wasu is at the forefront of the integration of mobile networks, cable networks and broadband networks."

"Charm has 16 years' experience in the TV advertising market and well established media agency and operations capabilities," Mr. Cao continued. "Wasu looks forward to leveraging Charm's in-depth understanding of clients, professional capabilities and expertise to take advantage of the increasing focus on new TV media that will come with three-network integration."

Mr. He Dang, founder, chairman and CEO of Charm commented, "We are seeing rapid progress towards three-network integration and we believe that this significant step forward for the industry will have a profound impact on TV, internet and mobile media. TV media is undergoing a transition from the broadcasting era into the on-demand era and our clients are undertaking ever more extensive TV media marketing campaigns and utilizing a wider variety of advertising products."

"As China's three-network convergence ramps up, this joint venture will leverage on Charm's advertising strengths and pioneer many of the industry standards in this fast-growing new media space," Mr. Dang continued.

About Three-Network Convergence

Three-network convergence is a Chinese State Council initiative to combine telecom, cable TV and internet networks to provide an integrated communications platform for voice, sound, data, image, video and other media. According to national survey statistics and data from the Ministry of Industry and Information Technology, as of August, 2010, China has 78.8 million households with digital cable TV, 118.8 million broadband internet enabled households and 823.1 million mobile phone users. According to an industry expert the three-network integration related market will reach RMB 688 billion over the next three years.

Currently the initiative is being trialed in 12 pilot cities and regions covering 30 million households which have already completed the two way integration of telecom and cable TV networks. According to China's State Council, this two-way integration will be carried out from 2010 to 2012 nationwide, with full three-network convergence being completed by 2015.

About Wasu

Wasu Digital Group is one of three operators in China to hold licenses to deliver content on several media platforms including IPTV, 3G mobile TV and broadband TV. Wasu is recognized by the industry as the first true three-network operator with businesses including landline, mobile, WiFi, WiMax, broadband, cable TV, digital TV and mobile TV, among others. Wasu's IPTV services currently reach 12 million users in over 120 cities in 23 provinces in China. It is also China's largest operator and digital content provider for cable TV, 3G mobile TV and broadband TV. In June 2010, Wasu and Alibaba Group's Taobao established a joint venture named "Wasu Taobao" to provide interactive TV shopping on Taobao stores through Wasu's digital cable network.

About Charm

Charm Communications Inc. (NASDAQ: CHRM) is a leading advertising agency in China. Charm operates its business under three brands: Charm Advertising, Charm Interactive, and Shangxing Media. Under the Charm Advertising and Charm Interactive brands, Charm offers integrated advertising agency services from planning and managing advertising campaigns to creating and placing advertisements. Under the Shangxing Media brand, Charm has established a portfolio of television advertising media resources through its exclusive arrangements with four programs on CCTV, and two satellite television channels, Shanghai Dragon TV and Tianjin Satellite TV, which includes not only advertising time but also opportunities for placing branded content. Charm's clients include well-recognized brand names in China across many industries, as well as emerging domestic leading brands. In January 2010, Charm formed a joint venture with international 4A advertising group Aegis Media, its strategic investor, to operate its brand "Vizeum" in China. For more information please go to http://ir.charmgroup.cn.

    For investor and media inquiries, please contact:

    New York

     Amanda Sham
     Brunswick Group
     Phone: +1-212-333-3810
     Email: charm@brunswickgroup.com

    Beijing

     Henry Fraser
     Brunswick Group
     Phone: +86-10-6566-2256
     Email: charm@brunswickgroup.com

SOURCE Charm Communications Inc.



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