China VoIP & Digital Telecom announced that as a result of the political riot on July 5 in Urumqi, the capital of the Xinjiang Uygur Autonomous region, the country issued an order in July 2009 to block VoIP services, which may be difficult to continue. The government has not removed the order to resume services.

Mr. Li Kunwu, CEO of the company, said: “The indefinite block of VoIP services is a political need at this time and we cannot change the government’s policy. CVDT is considering discontinuing the VoIP service and focusing on providing the virtualization solutions and services.”

In addition, Mr. Li added, “While the block that happened this time is a special issue, it is beyond our expectations that the government has not lifted the order to resume VoIP services. As a result, the company's telecom service business has suffered tremendously. We hope that all investors understand that the company’s future VoIP operations are facing great uncertainties and challenges.”