CITY NETWORK, INC.

CITY NETWORK, INC.

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Company Overview
City Network, Inc. designs, produces and markets a comprehensive line of broadband and wireless Internet access solutions. The company has its head office in Jhonghe City, Taiwan.
City Network is dedicated to delivering Internet broadband and communication access equipment to meet the business needs of Internet service providers (ISPs), system integrators (SI) and to a lesser degree the hospitality, residential property, telecommunication and small and medium enterprise marketplace. The company’s product line ranges from its Home PNA (Phoneline Networking Alliance) device for the residential building and hospitality market to the simple DSL bridge/modem for the home and small business user. The company also created the Hotspot solution and the Next Generation Loops (NGL) solution, both of which help companies extend their business to the carrier’s solution to meet people’s communication inquires.
The City Network shares are traded on the American Stock Exchange under the ticker symbol .
Business Summary
City Network, Inc. develops hardware and software (total solution) for broadband communication solutions. The Company provides Internet broadband communication and wireless infrastructure equipment and services for the expanding broadband marketplace. City Network is dedicated to delivering Internet broadband and communication access equipment to meet the business needs of the International Telecoms, Internet service providers (ISPs), system integrators (SI) and to a lesser degree the hospitality, residential property, telecommunication and small and medium enterprise marketplace to solve the last mile problems worldwide. The Company also created the Hotspot solution and the Next Generation Loops (NGL) solution, both of which help companies extend their business to the carrier’s solution to meet people’s communication inquires.
Description and history
City Network, Inc., incorporated in 1996, develops hardware and software (total solution) for broadband communication solutions. The Company provides Internet broadband communication and wireless infrastructure equipment and services for the expanding broadband marketplace. City Network is dedicated to delivering Internet broadband and communication access equipment to meet the business needs of the International Telecoms, Internet service providers (ISPs), system integrators (SI) and to a lesser degree the hospitality, residential property, telecommunication and small and medium enterprise marketplace to solve the last mile problems worldwide. The Company also created the Hotspot solution and the Next Generation Loops (NGL) solution, both of which help companies extend their business to the carrier’s solution to meet people’s communication inquires. The Company’s product line ranges from its Home PNA device for the residential building and hospitality market to the simple Digital Subscriber Line (DSL) bridge/modem for the home and small business user.

In 2005, City Network began the development of its construction business. The Company plans to develop and build commercial, industrial and residential buildings. It has entered into co-construction agreements for the development of land in Keelung, Taiwan and the purchase of materials and equipment related to the construction of a commercial building in Vietnam.

City Network has established business relationships with companies, such as Korea Telecom, OCC Communications in Japan and nSTREAMS in the United States. Korea Life Insurance (KLI) has contracted with the Company to establish over 1,600 branches of Wireless Local Area Network (WLAN) Internet service for KLI in Korea. In addition, through purchase orders from Easy-Up Corporation, the Company supplied and set up approximately 360 McDonald’s restaurants in Taiwan with WLAN services. Its system integrators range from small local companies to volume distributors, such as Easy-Up Corporation, to country-specific integrators, such as Terton Communications in Finland, and to international integrators, such as KWON C&C Ltd. in Korea and China Telecom in China.

Liquid Crystal Display (LCD) Panels

In 2004, City Network began the sales of LCD panels. Since the beginning of 2005, the Company has sold large volumes of 15 inch, 17 inch and 19 inch panels.

Wireless Communication Products

With the development of City Network’s IEEE802.11 WiFi and IEEE802.lx (authentication) wireless solutions, its wireless networking products allow computers and appliances to communicate through radio signals, providing added mobility and convenience. Furthermore, customers can enjoy the stability and security of the Company’s LAN products. All wireless solutions are equipped with a user verification function to maximize security and reduce outside interference.

City Network was one of the first companies in Taiwan to develop wireless products with IEEE802.1x in May 2002. Together with Easy-Up Corporation, the Company has provided solutions to Korea Life Insurance in connection with their 1600 Enterprise Hotspot Project and established Taiwan McDonald’s 365 stores Hotspot solution and the Mobile Taiwan project. The Company also extended its Wireless Hotspot solution business with China Putian.

Voice over Internet Protocol (VOIP)

In September 2004, City Network launched a wireless VoIP product. There are two models available for the market. One provides one VoIP and one public switched telephone network (PSTN) port, and the other model provides two VoIP and two PSTN ports. Both of them have two digital enhanced cordless telecommunications (DECT) Base Stations, and can be registered up to sixteen DECT phones set. Users can choose H.323 or SIP mode, which is easy to add on to the environment where co-existence with old VoIP equipment is needed.

City Network aligned with Easy-Up Corporation, one of Taiwan’s IP wireless phone service providers, to provide low cost VoIP service to end users. By connecting to the partner’s network, a user is able to save on its phone bill on GSM cellular phone calls and international calls to China, other areas of Asia, the United States and Canada. This cooperation with Easy-Up Corporation to provide VoIP services in Taiwan has been completed. In March 2006, the Company’s registration for a license to provide VoIP services in Taiwan was completed.

Asymmetric Digital Subscriber Line/ Very high bit-rate Digital Subscriber Line (ADSL/VDSL) Access Devices

The Company’s ADSL/VDSL devices provide broadband access based on Internet technologies. The ADSL 2+ and 20Mbps VDSL over Ethernet equipment allow both developing businesses as well as home users to meet their media and communication needs.

HPNA Access Devices

HPNA is a broadband network access system based on the Home PNA technology originally invented in the United States. This system can provide 1M/10 megabits per second (Mbps) broadband data access through existing telephone lines. This technology allows both voice and data to be shared by the same telephone line. Furthermore, the Company’s HPNA technology extends Internet transmission distance, allows for multiple single-line users (up to 25), and is compatible with cable, fiber, wireless and xDSL.

Fiber and Other Access Equipment

Fiber to the Building (FTTB) and Fiber to the Home (FTTH) optical fiber installed directly into a home or office was a new growth market for the Company. To meet its customer’s needs, City Network began outsourcing the Fiber solutions in 2003, and has created its own Fiber products since 2004. The Company has shipped these solutions to customers in Korea, Malaysia and Indonesia.

With City Network’s access equipment, bandwidth can be distributed efficiently to multiple end users. For developing countries, such as China, the Company’s solution of integrating wireless with existing telephone lines or cable is often much more attractive than building new infrastructure. From routers and hubs, to Personal Computer Memory Card International Association (PCMCIA) cards and Universal Serial Bus (USB) adapters, the Company provides customers with a wide range of networking products to meet all customer needs.

Global Positioning System (GPS) Module

The GPS solution was another new market for the Company in 2004. In the summer of 2004, City Network received an official purchase order of GPS modules of approximately 50,000 units, from JuYoung Electronics. In December 2004, the Company shipped, for a separate order, 65,000 advanced, high performance GPS modules and wireless blue tooth receiver units to JuYoung Electronics. In 2005, its sales to JuYoung Electronics diminished, and it is searching for other opportunities to outsource its GPS solution.

Business Line
Designs, produces and markets a comprehensive line of broadband and wireless Internet access solutions
Subsidiary

Advisor
SIMON- LIPTZ & CO.
IPO date
6/25/2002
US SIC Code
3669
Company Address

City province or state postal code
NV
Phone:
Fax:
Country address: UNITED STATES OF AMERICA
Website url: www.citynetwork.com.tw