Elektrobit Oyj - Company Announcement

Elektrobit (EB) to develop mobile devices for the Mexsat satellite communication system in Mexico

Stock exchange release

Free for publication on May 2, 2015 at 10.00 am. (CEST+1)

Elektrobit (EB) to develop mobile devices for the Mexsat satellite communication
system in Mexico


Elektrobit   Wireless  Communications  Ltd  (EB),  a  subsidiary  of  Elektrobit
Corporation,  and  the  Ministry  of  Mexican  Communication  and Transportation
(Secreteria  de  Comunicaciones  y  Transportes,  SCT)  have signed an agreement
regarding the development of three types of android-based L-band mobile devices:
satellite-terrestrial  smartphone, a satellite-terrestrial rugged enhanced phone
and  a satellite rugged basic phone, for  the SCT's Mexsat program. These mobile
devices will be based on EB's Specialized Device Platform, a customized Android-
based platform designed especially for public safety and cyber security markets.

The  value  of  this  development  agreement  is  approximately USD 21.9 million
(approximately  EUR  19.5 million  as  per  exchange  rate  of May 1, 2015) with
revenues  recognized gradually in 2015 and 2016 depending on the progress of the
development  work.  More  than  half  of  the  contract  value is expected to be
recognized  as revenue during 2016. The revenues  expected to be generated under
this  agreement during  2015 have already  been anticipated  in EB's outlook for
2015 and  will thus not cause changes  to the 2015 outlook published on February
19, 2015 in EB's Financial Statement Bulletin 2014.

The  development agreement includes a delivery of a small quantity of prototypes
of  the three  mobile devices.   Assuming that  the development work proceeds as
planned, these mobile phone variants are expected to be ready for actual product
deliveries  from  the  beginning  of  2017. However,  orders  for actual product
deliveries  are not included in this development agreement but remain subject to
separate agreement between the parties.

The  Mexsat  program  is  a  Mexican  Government  program  to  provide satellite
communication  services over Mexico and its patrimonial seas, including the Gulf
of  Mexico  and  the  Pacific  Ocean.  The  Mexsat System comprises two types of
services:  a  Mobile  Communications  Service  System,  served  by two dedicated
satellites   with   their   complete   terrestrial   components;   and  a  Fixed
Communications  Service System,  including one  dedicated satellite and specific
carrier  monitoring equipment. The communication system and devices are targeted
to  Mexican  government  offices  and  agencies  primarily for public safety and
defense purposes."To  have been chosen by the SCT to  develop these new mobile devices is a proof
of our unique product platforms and competence to provide small hand-held mobile
devices  with both satellite and terrestrial connectivity. The devices will have
features  from the commercial smartphones, and are based on EB's device platform
having enhanced security. Our specialized mobile device solutions with a variety
of  connectivity  options  make  EB  an  attractive  partner  for  companies and
authorities  in the public safety and  cyber security markets. Exactly for those
markets  we are also  bringing to the  market EB Tough  Mobile, a secure android
smartphone"  says  Hannu  Huttunen,  the  president  of  EB's  Wireless Business
Segment.

Under  the development agreement,  SCT and EB  have agreed that any intellectual
property  rights arising from the development work by EB will be owned by EB but
can  be utilized by SCT through a licensing agreement. The development agreement
contains  termination conditions customarily applied  in the industry, providing
for example, SCT a possibility to terminate the agreement with a short notice by
paying a ramp down fee. More about risks related to EB's business at
 http://www.elektrobit.com/investors/corporate_governance/internal_control_and_r
isk_management

Oulu, May 2, 2015,

Jukka Harju
CEO
Elektrobit Corporation

Further information:
Hannu Huttunen
President of Wireless Business Segment
Tel. +358 40 344 3507


Distribution:
NASDAQ OMX Helsinki
Principal media


Elektrobit Corporation (EB)
EB creates advanced technology and turns it into enriching end-user experiences.
EB  is specialized  in demanding  embedded software  and hardware  solutions for
wireless  and automotive  industries. The  net sales  in 2014 totaled EUR 224.1
million  and operating  profit was  EUR 16.8 million.  Elektrobit Corporation is
listed on NASDAQ OMX Helsinki. www.elektrobit.com

About EB Specialized Device Platform
EB's  Specialized  Device  Platform  is  a  versatile device platform leveraging
latest  mass  market  mobile  device  hardware  and  software  technologies. The
platform  enables  companies  to  roll-out  fully  customized  mobile devices in
various  form factors (incl. module, smartphone,  tablet and smart watch) faster
and  with lower development  risks. In 2011, EB  Specialized Device Platform was
awarded  as  "Technology  of  the  Year"  by  the Wireless Innovation Forum. The
platform  has been productized to public  safety, security, industrial and smart
watch  markets.  http://www.elektrobit.com/special_device_platform.  One  of the
major products based on this platform is the EB Tough Mobile, secure Smartphone.
http://www.elektrobit.com/EBToughMobile

About Mexsat program
The  Mexsat  program  is  a  Mexican  Government  program  to  provide satellite
communication  services over Mexico and its patrimonial seas, including the Gulf
of  Mexico  and  the  Pacific  Ocean.  The  Mexsat System comprises two types of
services:  a  Mobile  Communications  Service  System,  served  by two dedicated
satellites   (Centenario   and  Morelos  3, respectively)  with  their  complete
terrestrial components; and a Fixed Communications Service System, including one
dedicated  satellite (Bicentenario)  and specific  carrier monitoring equipment.
Satellite  Bicentenario was launched in December 2012, and satellites Centenario
and Morelos 3 are expected to be launched within 2015 and 2016.


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