09:38 NW MOBILE<00862> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. NEW WORLD MOBILE HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 862) CONTINUING CONNECTED TRANSACTION A Master Agreement was entered into between NWPCS and NWT on 19 May 2005 in relation to the provision of the Services by NWT to NWPCS. NWT is a wholly-owned subsidiary of NWD, which is in turn the controlling shareholder holding approximately 71.81% interest in the issued share capital of the Company. Accordingly, NWT is regarded as an associate of NWD and the entering into of the Master Agreement constitutes a continuing connected transaction for the Company and is subject to announcement, reporting and annual review requirements, but is exempt from independent shareholders' approval requirements under the Listing Rules. INTRODUCTION Reference is made to the announcement of the Company dated 2 June 2004 ("Announcement") wherein the Company announced that New World PCS Limited ("NWPCS"), a wholly-owned subsidiary of the Company, had entered into various agreements with New World Telecommunications Limited ("NWT"), an indirect wholly-owned subsidiary of New World Development Company Limited ("NWD"), in relation to the provisions by NWT of interconnection, transmission, traffic routing and other related services such as wholesale international direct dial services, local and international transmission links services at various transmission speed, and porting and dipping service for mobile number portability (the "Services") to NWPCS for the period up to 30 June 2006. On 19 May 2005, a Master Agreement for Telecommunications and Interconnection Services ("Master Agreement") was entered into between NWPCS and NWT for the provision of the Services for three years from 1 June 2005 to 31 May 2008. MASTER AGREEMENT Date : 19 May 2005 Parties : NWPCS and NWT Term : Three years from 1 June 2005 to 31 May 2008. NWPCS is not bound under the Master Agreement to place any order with NWT for any of the Services. Each order, if placed by NWPCS and accepted by NWT, will constitute a separate legal binding contract between the parties provided that the term of each order shall not exceed the term of the Master Agreement. Price : The price for each order will be mutually agreed by NWPCS and NWT and will be determined in accordance with (i) the then comparable market rate; (ii) the then applicable rate of the Services used by NWPCS; (iii) the rate of the Services as published by NWT at Hong Kong Government Gazette; or (iv) the rate as determined by the Office of the Telecommunications Authority. Fixed recurring charges will be invoiced by NWT to NWPCS monthly in advance. Charges measured on usage basis will be invoiced by NWT monthly in arrears. Annual cap : The value of Services provided by NWT for the years ended 30 June 2003 and 2004 amounted to approximately HK$99.1 million and HK$78 million respectively. The expected maximum aggregate annual value ("Cap") for the Services to be provided by NWT for each of the two years ending 30 June 2005 and 2006 under the previous agreements will not exceed HK$71 million respectively, which had been disclosed in the Announcement. It is expected that the Cap for the Services to be provided by NWT for each of the two years ending 30 June 2007 and 2008 under the Master Agreement will not exceed HK$8,400,000 respectively, unless NWT offers very attractive pricing. The Company will re-comply with the relevant disclosure and approval requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") if the Cap is exceeded. The Cap for the two years ending 30 June 2007 and 2008 is determined by reference to the amount of Services provided by NWT to NWPCS in preceding years and the reduction of prices for the Services as a result of market competition.