Customised module to drive Chinese set-top boxes: News from Comtech

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Comtech Group has signed an agreement to supply a new customised module design solution to a leading digital and IPTV set-top box (STB) OEM in China. The agreement provides that the OEM will incorporate Comtech's new customised module solution in 500,000 STB units in 2007. This new STB solution is intended to provide more functionality and user-friendly features with competitive pricing as compared with other products currently in the market.

Management estimates this agreement can generate approximately US $15 million revenue in 2007 and expect to begin shipment in Q1 2007.

'We have been involved in the digital media business since the end of 2005 and the digital and IPTV market is the first area we are focusing on', commented Jeffrey Kang, Chairman and Chief Executive Officer of Comtech.

The Chinese market has over 150 million analogue CATV subscribers and the number of consumers switching to digital technology started increasing substantially during the fourth quarter of 2005.

Industry experts estimated the total number of digital subscribers to be more than 10 million by the end of 2006, and will increase to over 60 million by 2008.

Growth is expected to be fueled by government mandates for digital broadcasting for the 2008 Beijing Olympics.

'We continue to expand the number of customised module solutions we offer for all major OEM customers in this high growth market', commented Jeffrey Kang, Chairman and Chief Executive Officer of Comtech.

'Because we are seeing significant capital expenditure spending in Beijing Olympic related business in China this year and expect the same to be true next year, we are confident about our business outlook in 2007 and believe our digital and IPTV set-top box business will be a strong and visible growth driver in 2007'.

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