China VoIP & Digital Telecom announced it has acquired Hangzhou Zhongfang a Voice-over Internet Protocol Services provider based in the Zhejiang Province. The acquisition will expand the Company’s reach into Zhejiang and other southern provinces in the People’s Republic of China.

Under the terms of the agreement, Jinan will acquire existing VoIP infrastructure from Zhongfang to facilitate future VoIP sales and services in the Province. The acquisition will also provide a platform for Jinan Yinquan to develop and expand its VoIP business in adjacent southern provinces.

Jinan Yinquan, is a rapidly growing technology company that offers VoIP services in the People’s Republic of China.

In addition to producing and distributing VoIP hardware, Zhongfang also provides VoIP phone services in Zhejiang Province primarily to telephone cafes in 4 cities in Zhejiang Province. According to Li Kunwu, President and CEO of China VoIP & Digital Telecom Inc., this new agreement formalizes an existing working relationship between the two companies.

“We have been working with Zhongfang for over three years,” said Kunwu. “They were an ideal acquisition candidate for us to expand our market into Zhejiang Province which has a population in excess of 50 million people with per capita disposable income growing at a rate as high as 10.4 percent annually. We are also big proponents of the Internet café concept and Zhongfang has established a solid base of business in this burgeoning market segment. We anticipate this agreement will significantly increase our annual revenue but is also a significant step forward in our nationwide expansion plans.”

Prior to this acquisition, Jinan Yinquan has been servicing three provinces and 19 cities with Shandong Province its primary base of operations. Short- and long-term plans call for the expansion throughout China.

The Company’s proprietary NP Soft Switch IP telephone system enables users to access Voice over the Internet Protocol (VoIP) services allowing customers to use the system to make telephone calls to anyone in the world at a much lower cost than standard telephone rates.

Jinan Yinquan recently announced its new electronic fax system for enterprise business customers in partnership with China Tie Tong. Available across Shandong Province, the electronic fax service is an Internet-based fax solution that will enable enterprise businesses to send and receive faxes using existing email accounts. Unlike traditional faxing, electronic faxing is convenient, cost-effective, secure, integrated and automated.

v China Tie Tong is one of the six largest basic telecom operators in China. The company, which has 31 provincial branches and 316 municipal branches, employs approximately 72,000 people. Its high-speed backbone optical transmission network consists of five fiber loops covering most of the cities in China’s 31 provinces and a distance of 52,000 kilometers. During the period of 2001 to 2005 annual revenues have grown by 30 percent while fixed-line subscribers increased from 1.35 million to 16.4 million. By the end of 2005 the company had 2 million Internet subscribers and assets of 53.3 billion RMB. (For more information, go to www.chinatietong.com)