Deploying The Largest Broadband

Network in The World!

ChinaTel Group, Inc. History

• In June of 2008 ChinaTel Group entered into Agreements to purchase 49% of CECT- Chinacomm– ChinaTel also entered into Service and Equipment Agreements– CECT-Chinacomm owns 3.5GHz Spectrum in 29 of China’s Largest

Metropolitan Cities• In July of 2008 ChinaTel financed and launched a WIFI Mesh

network in Beijing– This allowed CECT to renew 3.5GHz Spectrum in 29 of China’s Largest

Metropolitan Cities• In March of 2009 ChinaTel acquires Perusat, which owns 2.5 GHz

Spectrum in Peru• In May of 2010 ChinaTel entered into Stock Purchase Agreement

with Isaac Organization for up to $640 million in stock and warrants• In August of 2010 ZTE and China Tel sign Memorandum of

Understanding for global strategic partnership

Corporate Structure

Financial Structure

ChinaTel’s WiMAX Evolution Route

ChinaTel’s LTE Evolution Route

Market Opportunity in China

Sources: CIA, EIU, City Mayor Statistics, and IMF

PopulationPopulation

2001-2006 GDP CAGR

2001-2006 GDP CAGR

GDPGDP

2006-2010E CAGR

2006-2010E CAGR

($ in trillions)

CECT Chinacomm Deployment Plan

• Network Feasibility for all 12 cities• Radio Frequency (RF) Engineering for all 12 cities

– Topographical and geographical coverage completed• Site Acquisition for all 12 cities

– 3 sites per search ring (Primary, B candidate, and C candidate)– Lease templates for primary candidates completed

• Construction Drawings for all 12 cities– Templates for all Primary candidates completed

• 2 Completed NOC(Network Operation Centers) in Beijing & Shanghai

• Switches and Data Centers are engineered but not built for all 12 cities

12 City (Phase I) Deployment Update for

CECT Chinacomm

12 City Deployment Completion Schedule

2010 2011 2012 2013 2014

Subscriber Revenue 0 63,638,400 192,231,360 270,804,600 367,836,000

Government Projects 0 6,000,000 20,000,000 30,000,000 40,000,000

Corporate Customers 0 7,500,000 20,000,000 30,000,000 40,000,000

12 City Deployment Revenues

2010e 2011e 2012e 2013e 2014e

(Users) (Users) (Users) (Users) (Users)

Phase 1

Beijing 0 142,000 351,000 480,000 656,000

ShangHai 0 162,000 400,000 546,000 747,000

ShenZhen 0 74,000 182,000 249,000 340,000

GuangZhou 0 87,000 216,000 295,000 404,000

NanJing 0 64,000 159,000 218,000 298,000

Sub Total 0 529,000 1,308,000 1,788,000 2,445,000

WuHan 0 72,000 178,000 244,000 333,000

ChongQing 0 47,000 117,000 159,000 218,000

Harbin 0 86,000 212,000 290,000 397,000

Xian 0 72,000 179,000 244,000 334,000

XiaMen 0 21,000 52,000 71,000 98,000

Sub Total 0 298,000 738,000 1,008,000 1,380,000

QingDao 0 66,000 163,000 223,000 305,000

KunMing 0 54,000 133,000 182,000 249,000

Sub Total 0 120,000 296,000 405,000 554,000

Total 0 947,000 2,342,000 3,201,000 4,379,000

12 City Deployment Subscribers

2010 2011 2012 2013 2014

Subscriber Revenues $0 $63,638,400 $192,231,360 $270,804,600 $367,836,000

Government Projects $0 $6,000,000 $20,000,000 $30,000,000 $40,000,000

Corporate Customers $0 $7,500,000 $20,000,000 $30,000,000 $40,000,000

Total Revenue $0 $77,138,400 $232,231,360 $330,804,600 $447,836,000

% Growth     201.06% 42.45% 35.38%

Operating Expenses

Cost of Service (IDC Costs and Technology-related Costs)

$2,490,000 $16,280,000 $17,304,000 $18,668,000 $20,716,000

Salaries & Non-wage Labor Costs $1,707,300 $22,302,216 $31,625,245 $45,932,942 $60,115,313

Direct Marketing & Sales Expense $318,192 $15,909,600 $48,057,840 $67,701,150 $91,959,000 Reseller Program Commissions $164,187 $16,418,707 $67,088,745 $86,386,667 $128,006,928 User Device Promotion Costs $296,300 $3,555,600 $3,555,600 $3,555,600 $3,555,600 Rental Expenses $670,000 $2,225,000 $3,024,000 $4,199,000 $5,660,000 Implementation Costs $28,762,091 $24,501,041 $0 $0 $0 Office Administration Expense $170,730 $2,230,222 $3,162,524 $4,593,294 $6,011,531 Sales Related Expense $108,000 $360,000 $360,000 $360,000 $360,000 Rent BTS/NOC $993,600 $2,016,000 $2,016,000 $2,016,000 $2,016,000 Other Operating Expense $1,512,000 $2,633,000 $2,338,000 $3,130,000 $3,693,000

Costs Before D&A $37,192,400 $108,431,385 $178,531,954 $236,542,653 $322,093,373 EBITDA ($37,192,400) ($31,292,985) $53,699,406 $94,261,947 $125,742,627 EBITDA Margin   -40.6% 23.1% 28.5% 28.1%Depreciation & Amortization $7,908,355 $9,121,367 $9,121,367 $10,555,332 $12,108,795 % of Revenues   11.8% 3.9% 3.2% 2.7%Operating Income (EBIT) ($45,100,755) ($40,414,353) $44,578,039 $83,706,614 $113,633,833 Operating Margin   -52.4% 19.2% 25.3% 25.4%

Interest Expense $4,500,000 $4,500,000 $4,500,000 $3,500,000 $2,500,000 Income Before Income Taxes ($49,600,755) ($44,914,353) $40,078,039 $80,206,614 $111,133,833 % of Revenues   -58.2% 17.3% 24.2%

Income Tax Expense $0 $0 $0 $6,442,386 $27,783,458

Income Tax Rate 25% 25% 25% 25% 25%

Income Before Dividends and Extraordinary Items ($49,600,755) ($44,914,353) $40,078,039 $73,764,228 $83,350,375 % of Revenues   (58.2%) 17.3% 22.3% 18.6%

Net Income Available to Shareholders ($49,600,755) ($44,914,353) $40,078,039 $73,764,228 $83,350,375 % of Revenues   -58.2% 17.3% 22.3% 18.6% % Growth     (189.2%) 84.1% 13.0%

12 City Deployment Income Statement

12 City Deployment CAPEX2010 2011 2012 2013 2014

1.BTS (960 sites, 1980 sectors)

$26,452,800 $0 $0 $0 $0

2.CPE (10440 units - Indoor & Outdoor)

$4,392,776 $3,714,224 $0 $0 $0

3.Backhaul (576 pairs) $2,218,715 $0 $0 $0 $0

4.ASN (12 Units) $1,558,119 $0 $0 $0 $0

5.AAA (650K users, 4 sites)

$1,253,801 $221,259 $0 $0 $0

6.Subscriber License (650K users, 4 sites)

$780,576 $137,749 $0 $0 $0

7.Network Management System (4 sites)

$1,624,565 $286,688 $0 $0 $0

8.Core Network $8,208,238 $0 $0 $0 $0

9.System Integration $9,532,480 $0 $0 $0 $0

10.Installed Material $4,767,680 $0 $0 $0 $0

11.Network Operation Center (4 sites)

$677,861 $406,717 $0 $0 $0

12 AP Manager(For CPE)

$1,000,000 $0 $0 $0 $0

13 Optical Layer Equipment

$13,524,053 $5,863,483 $0 $0 $0

14 Call Center $2,500,000 $1,500,000 $0 $0 $0

18 Spares $591,889 $0 $0 $0 $0

19 Network Maintence       $14,339,651 $15,534,622

Annual CapEx $79,083,552 $12,130,120 $0 $14,339,651 $15,534,622

Perusat Deployment Plan

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Ending Subscribers 5,000 38,650 192,331 400,655 616,642 833,630 1,025,689

% Growth 673% 398% 108% 54% 35% 23%

Net Adds 5,000 33,650 153,681 208,324 215,987 216,988 192,058Monthly ARPU Net Subscriber $15.22 $15.91 $16.07 $21.23 $22.12 $21.23 $20.46

% YOY Change 4.5% 1.1% 32.1% 4.2% (4.0%) (3.7%)

EBITDA/Sub. ($) ($1,152.13) ($218.66) ($31.60) $97.04 $132.53 $135.09 $132.42

Cum. CapEx/Sub.($)

($894.34) ($427.07) ($149.22) ($100.96) ($81.25) ($73.31) ($68.30)

Perusat Financial Forecast

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Subscriber Revenues $913,461 $7,377,515 $37,098,561 $102,052,276 $163,707,314 $212,410,097 $251,806,200

Total Revenue $913,461 $7,377,515 $37,098,561 $102,052,276 $163,707,314 $212,410,097 $251,806,200

% Growth   707.6% 402.9% 175.1% 60.4% 29.7% 18.5%

Operating Expenses

Cost of Service (IDC Costs and Technology-related Costs) $1,468,699 $7,531,871 $29,990,062 $47,212,230 $61,585,151 $75,692,107 $88,456,154

Salaries & Non-wage Labor Costs$697,554 $1,085,886 $1,961,600 $2,033,409 2,043,917

$2,043,917 $2,043,917

Direct Marketing & Sales Expense$2,235,000 $3,924,313 $3,762,000 $3,694,800 $4,732,000 $5,163,000 $5,535,000

Reseller Program Commissions $114,016 $703,420 $3,017,160 $2,975,260 $3,192,298 $2,950,923 $2,707,759

Promotion Costs $562,000 $656,000 $656,000 $721,600 $793,760 $873,136 $960,450

Rental Expenses $453,000 $540,000 $632,000 $732,000 $878,400 $1,054,080 $1,264,896

Implementation Costs $326,000 $324,000 $356,400 $392,040 $431,244 $474,368 $521,805

Other SG&A Expense $835,844 $1,063,279 $2,801,511 $5,410,103 $8,329,480 $11,540,044 $14,490,227Other Operating Expense (One-time Expenses)

$0 $0 $0 $0 $0 $0 $0

Costs Before D&A $6,674,113 $15,828,768 $43,176,733 $63,171,441 $81,986,251 $99,791,575 $115,980,208

EBITDA ($5,760,652) ($8,451,253) ($6,078,172) $38,880,835 $81,721,063 $112,618,522 $113,825,992

EBITDA Margin -630.6%  -114.6% -16.4% 38.1% 49.9% 53.0% 53.9%

Depreciation & Amortization $223,585 $1,026,542 $2,135,284 $3,118,952 $3,877,178 $4,522,643 $5,067,757

% of Revenues  24.5% 13.9% 5.8% 3.1% 2.4% 2.1% 2.0%

Operating Income (EBIT) ($5,984,237) ($9,477,795) ($8,213,456 $35,761,883 $77,843,885 $108,095,879 $130,758,235

Operating Income Margin  -655.1% -128.5% -22.1% 35.0% 47.6% 50.9% 51.9%

Interest Expense/Financing $1,567,711 $824,169 $729,098 $888,498 $1,030,246 $1,204,580 $1,239,007 Total Other Expense (Income) $1,567,711 $824,169 $729,098 $888,498 $1,030,246 $1,204,580 $1,239,007 % of Revenues 171.6% 11.2% 2.0% 0.9% 0.6% 0.6% 0.5%

Income Tax Expense $0 $0 $0 $0 $3,584,764 $20,171,748 $25,477,877

Income Tax Rate 30% 30% 30% 30% 30% 30% 30%

Income Before Dividends and Extraordinary Items

($7,551,948) ($10,301,963) ($8,942,554) $34,873,386 $73,228,875 $86,719,550 $104,041,350

% of Revenues -826.7%  -139.6% -24% 34.2% 44.7 % 40.8% 41.3%Net Income Available to Shareholders

($7,551,948) ($10,301,963) ($8,942,554) $34,873,386 $73,228,875 $86,719,550 $104,041,350

% of Revenues  -826.7% -139.6% -24.1% 34,2% 44.7% 40.8% 41.3%

Net Income Available to Shareholders

($7,551,948) ($10,301,963) ($8,942,554) $34,873,386 $73,228,875 $86,719,550 $104,041,350

% of Revenues -826.7% -139.6% -24.1% 34.2% 44.7% 40.8% 41.3%

% Growth     110.0% 18.4% 20.0%

Perusat Income Statement

2010 2011 2012 2013 2014 2015 2016BTS-Equipment, Install, RF Planning (727sites)

$2,378,517 $7,135,551 $6,184,144 $5,042,456 $4,519,182 $5,470,589 $3,853,198

CPE Units $531,000 $3,870,000 $16,956,000 $22,311,000 $19,690,000 $17,130,000 $16,386,000

Local Microwave-Equipment, Install, Design (909 radios) $629,313 $1,887,938 $1,636,213 $1,334,143 $1,195,694 $1,447,418.75 $1,019,486.25

WIMAX System Equipment-Core, Billing, Spares, Warranty $1,353,863 $1,286,131 $2,692,946 $3,499,014 $3,911,937 $4,043,035.15 $4,013,040.47

Offices and Data Center $0 $1,500,000 $1,680,000 $1,800,000 $0 $0 $0

Vehicles$75,000 $225,000 $0 $75,000 $25,000 $50,000 $50,000

Frequency Acquisitions $0 $5,000,000 $0 $0 $0 $0 $0

Annual CapEx+CPE Terminals $4,967,693 $20,904,62

0 $29,149,302 $34,061,612 $29,341,813 $28,141,843 $25,321,724

Projected Capital Expenditures + CPE Terminals

Strategic Partnerships

Summary• CECT-Chinacomm has both the 3.5GHz

spectrum licenses and the business license to

deploy fixed Broadband technology in 29 cities

in China representing 50% of Chinese GDP

• ChinaTel through Perusat owns 2.5GHz

spectrum licenses for 7 cities in Peru

• 4th Generation Broadband presents an

opportunity for investors to ride the next wave

of capital investment that service providers

will deploy globally  

• The Broadband market in China is projected to

grow almost seven-fold and three-fold in Latin

America between 2009 and 2011.

Disclaimer

China Tel Group, Inc (the “Company”) is an emerging growth company

involved in the planned development and deployment of

telecommunications infrastructure. This presentation covers a number

of aspects of the business with which they are currently engaged. This

presentation is for informational purposes only and does not

constitute an offer or solicitation. Furthermore, all information

contained in this presentation is believed to be accurate and

constitutes confidential information of the Company. Any

reproduction or distribution of this presentation, in whole or in part,

or the divulgence of any of its contents without the written consent of

the company is strictly prohibited.

Safe Harbor Statement

This presentation may contain forward-looking statements or information. Forward- looking statements

or information include statements regarding the expectations and beliefs of management. Forward-

looking statements or information include, but are not limited to, statements or information with respect

to known or unknown risks, uncertainties and other factors which may cause the actual results,

performance or achievements of the company to be materially different from any future results,

performance or achievements expressed or implied by such forward-looking statements or information.

Forward-looking statements or information are subject to a variety of risks and uncertainties which could

cause actual events or results to differ from those reflected in the forward-looking statements or

information, including, without limitation, risks and uncertainties relating to obtaining financing to meet

the Company’s current or future plans and other risks and uncertainties. Accordingly, readers are advised

not to place undue reliance on forward-looking statements or information. The Company does not

undertake any obligation to release publicly revisions to any “forward-looking statement,” to reflect event

or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events,

except as is required under applicable securities laws.