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Also please note that some of the information to be discussed includes non-GAAP financial matters as defined in Regulation G. The most directly comparable GAAP financial matters and information reconciling these non-GAAP financial matters to AsiaInfo-Linkage financial results prepared in accordance with GAAP are included in AsiaInfo-Linkage earnings release, which has been posted on the Investor Relations section of AsiaInfo-Linkage website, www.asiainfo.com.Finally, please note that unless otherwise stated all figures mentioned during this conference call are in U.S. dollars I will now turn the call over to AsiaInfo-Linkage President and CEO, Steve Zhang. Steve Zhang Hello. And thank you for joining the call today. We are pleased to report another strong quarter for AsiaInfo-Linkage. During the second quarter we met net revenue on GAAP EPS guidance and exceeded non-GAAP EPS guidance. We also achieved a growth margin of almost 60% and operating margin of approximately 22%. Before I go into the details of the quarter and discuss some of the key projects we are working on, I want to first take this opportunity to highlight our closing of the Linkage merger. As you know we successfully completed our merger with Linkage on July 1st, forming the combined company AsiaInfo-Linkage. So far both front and backend integration are progressing smoothly. We are pleased with the complementary nature of our sales teams and we have identified in the catalogue 80 AsiaInfo-Linkages solutions that our sales teams are being briefed on for selling in the second half of 2010. As we have reiterated in the past the combined entity will create a leader in the IT software and solutions industry. We now both an expanded product offering, stronger R&D capabilities and complementary customer bases that will enable us to provide better class solutions and services to our clients. We have completed unification of our product catalogue with over 80 products for cross-selling and we have had success in cross-selling smaller solutions with shorter sales cycles.
For example China Mobile plan to use Jiangsu Province as the pilot site for internet data centre operation management platform. Historically, Jiangsu Mobile has been a Linkage client, so Linkage’s sales teams successfully sold Asia-Info solutions winning the agency contract up for bid, after the merger.And to give another example, Linkage’s IT service management systems which falls under the OSS product lines has been shortlisted by China Telecom headquarters and shows good potential to contribute meaningful revenue as it can be implemented nation-wide. This is only the beginning, as we are positioned to take up more cross-selling opportunities, by leveraging our sales catalogue of 80 products and solutions. We also plan to use our established au operators, our TDO model to increase contract size per customer. Now moving onto our three main customer accounts. Starting with our China Mobile account, which comprises a significant amount of our net revenue, the demand backdrop is very healthy. Despite concerns that CapEx spending is slowing down, China Mobile is still spending on IT solutions to improve its customer data analysis and sales marketing systems. We expect to sign almost all of the Next Generation 1 Phase II rollout of Version 2.0 contract by the end of the third quarter and we are busy designing the specs, together with China Mobile, for our Next Generation 2 Phase I rollout, our Version 3.0, to upgrade operator’s existing business operations support systems. We expect IT spending to remain quite stable as a portion of the CapEx budget been on top of our services versus power continues to increase. We are also benefiting from China Mobile’s OpEx budget as we continue to work closely with the sales and marketing department to help design more targeted and effective sales and marketing campaigns. Our business operation consulting team is growing nicely as the carrier is beginning to spend to gain a better understanding of its key customers. Read the rest of this transcript for free on seekingalpha.com