ITOCHU Corporation (“ITOCHU”) and ITOCHU (China) Holding Co., Ltd. (head office: Beijing, China; President: Nobuo Kuwayama; “ICH”) have reached a basic agreement to jointly pursue a partnership with Beijing Dixintong Electronics Communication Technology Co., Ltd. (head office: Beijing, China; Chairman: Liu Donghai; “D.Phone”), the largest retailer of mobile phones in China.

ITOCHU has operated in the mobile phone sector since the early 1990s, and offers a diverse array of services in Japan that include logistics and retail, content, and compensation for terminals, with the ITOCHU Group companies at the core. Based on the experience it has acquired in the Japanese mobile phone market, the Company will form a business partnership with D.Phone, the largest mobile phone retailer in China, aiming to develop strategic businesses in the Chinese market. It would be the first partnership by a Japanese company with a major retailer in China.

With more than 700 million subscribers, China is the largest mobile phone market in the world. It has seen tremendous growth, with a net increase of about 100 million subscribers each year. Further sales are imminent, given the adoption of 3G mobile phones and the shift to mobile phones following the termination of PHS services. The market is also likely to benefit from further economic growth backed by the proactive measures of the government and the accompanying expansion in demand.

ITOCHU intends to put its management techniques, global network, and Group capabilities to work in the rapidly growing Chinese market, aiming to contribute to the promotion of D.Phone in the Chinese market and to enhance its corporate value, while also expanding the mobile phone businesses of the ITOCHU Group.

Gist of Basic Agreement Reached

1. Provision of know-how on mobile phone retailing and corporate sales activities through partnerships with ITOCHU Group companies, and mutual use of logistics networks throughout China
2. Joint development of a mobile phone repair business in China
3. Joint development of a support business for Japanese mobile phone manufacturers entering the Chinese market
4. Exchange of human resources
5. Other businesses related to the partnership

Corporate profile of D.Phone