Arch Digital Holdings Ltd c/o ARC Advisors SC 13D/A Funtalk China / Arch Digital Holdings Ltd c/o ARC Advisors ownership change

Exhibit B

March 25, 2011

The Board of Directors

Funtalk China Holdings Limited

21/F, Block D, The Place Tower

No.9 Guanghua Road, Chaoyang District

Beijing, China 100020

Dear Sirs and Madams:

We, ARCH Digital Holdings Ltd. (“ARCH”), Capital Ally Investments Limited (“Capital Ally”), GM Investment Company Limited (“GM”), Sinowill Holding Limited (“Sinowill”), which is controlled by Mr. Kuo Zhang, chairman of the board of directors of Funtalk China Holdings Limited (the “Company”), Huge Harvest Enterprises Limited (“Harvest”), which is wholly owned and controlled by Mr. Dongping Fei, chief executive officer of the Company, Kingstate Group Limited (“Kingstate”), which is wholly owned and controlled by Mr. Hengyang Zhou, executive president of Beijing Funtalk Century Technology Group Company Limited, an indirect wholly owned subsidiary of the Company, and Trend Focus Limited, which is wholly owned and controlled by Mr. Francis Kwok Cheong Wan, senior vice president of corporate investor relations of the Company (“Trend Focus”, together with ARCH, Capital Ally, GM, Sinowill, Harvest and Kingstate, the “Consortium Members”), are pleased to submit this preliminary non-binding proposal to acquire all of the outstanding ordinary shares of the Company not already owned by the Consortium Members in a “going-private” transaction (the “Transaction”).

We are very interested in the Company and are prepared to make a proposal that will be attractive to the Company’s public shareholders, subject to the terms and conditions set forth below.

1. Consortium Members

The Consortium Members have entered into a consortium agreement, dated March 25, 2011 (the “Consortium Agreement”), pursuant to which the Consortium Members would form an acquisition vehicle for the purpose of pursuing the proposed Transaction on an exclusive basis for the next twelve months.

The Consortium Agreement also obligates the Consortium Members to (i) vote for the proposed Transaction and not take any action inconsistent with it and (ii) not transfer any of their respective shares in the Company. The Consortium Members currently own, in the aggregate, 46,458,314 ordinary shares, or approximately 77.13% of the outstanding shares of the Company (excluding outstanding warrants and options of the Company).

2. Offer Price

We are prepared to acquire all of the outstanding shares of the Company not already owned by the Consortium Members at a price per ordinary share of $7.10 in cash (the “Offer”). Although this proposed Transaction does not represent a change of control, this Offer represents a premium of 34.0% to the average closing price of the Company’s shares during the last 30 trading days. We believe that this price is highly attractive and is in the best interest of the Company and its public shareholders and would be welcomed by them. We believe that this Offer presents a compelling opportunity for public shareholders to participate in a premium-priced liquidity event given the limited liquidity of the Company’s shares.

3. Process

Given Mr. Kuo Zhang, Mr. Dongping Fei, Mr. Hengyang Zhou and Mr. Francis Kwok Cheong Wan’s involvement in the proposed Transaction, we expect that the Company’s Board of Directors would establish a special committee of independent directors to consider the proposed Transaction (the “Special Committee”). We also expect the Special Committee to retain independent advisors, including an independent financial advisor, to assist it in its work.

In considering our offer, you should be aware that we are interested only in acquiring the outstanding shares of the Company not already owned by the Consortium Members, and that we do not intend to sell our respective stakes in the Company to a third party.

4. Due Diligence

We are ready to move expeditiously to complete the proposed Transaction as soon as practicable. We have engaged Citigroup Global Markets Asia Limited (“Citi”) as our financial advisor and Cleary Gottlieb Steen & Hamilton LLP and Conyers Dill & Pearman as our legal counsel and believe that, with the full cooperation of the Company, we can complete our due diligence investigation, which would include, but not limited to, business, legal, accounting and tax due diligence typical for a transaction of this nature, within approximately four weeks of the date that we gain access to the necessary documentation and personnel. We would expect to be granted full access to the Company’s management as well as brief meetings with the Company’s key suppliers and customers.

5. Financing

We intend to finance the proposed Transaction with a combination of debt and equity capital. We are in discussions with several investment funds which have expressed serious interest in providing financing to the Consortium Members. We are confident that commitments for the required debt and equity financing, subject to terms and conditions set forth therein, will be in place by the time the definitive documentation for the proposed Transaction is executed.

6. Required Approvals

We have already received all requisite internal approvals to submit this proposal.

7. Definitive Documentation

Assuming our satisfaction with the results of our due diligence investigation, we would concurrently negotiate definitive documentation for the proposed Transaction. We would expect that such documentation would contain terms customary for transactions of similar size and nature, including customary representations and warranties, covenants, termination provisions and closing conditions. We would also expect that such documentation would include customary deal protection procedures and provisions, including a no-solicitation covenant.

8. Confidentiality

The Consortium Members will, as required by law, promptly file amendments to their respective Schedule 13Ds to disclose their participation in this proposal and the Consortium Agreement. However, we are sure you will agree with us that it is in all of our interests to ensure that we proceed in a confidential manner, unless otherwise required by law, until we have executed definitive documents or terminated our discussions. Any written news releases by the Company or us pertaining to the proposed Transaction shall be reviewed and approved by the Company and us prior to their release, subject to any requirements of law.

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In closing, we would like to express our commitment to working together to bring this proposed Transaction to a successful and timely conclusion. We are available at any time to discuss the terms of our proposal or to respond to any questions that may arise. If you would like to discuss any of the matters outlined above further, please contact Allan Liu of ARCH at +852 9160 7082, Kuo Zhang of Sinowill at + 86 1390116562 or Colin Banfield of Citi at +852 2501 2006. We look forward to hearing from you.

This letter represents only a preliminary non-binding proposal by us to engage in the proposed Transaction on the terms and subject to the conditions set forth above. Our proposal is expressly subject to the satisfactory negotiation and execution of appropriate definitive documentation and the other matters referred to herein. This letter does not constitute a binding commitment and any such binding commitment only will be set forth in the definitive documentation (and no oral agreements will be deemed to exist). Either the Consortium Members, on the one hand, or the Company, on the other hand, may at any time prior to the execution of definitive documentation decide not to pursue the proposed Transaction. We consider this letter and the matters set forth herein confidential and expect the Company to treat them as such and not to disclose them to any third party without our prior written consent unless otherwise required by law.

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Sincerely,
By:	/s/ Rachel Chiang
For and on behalf of
ARCH Digital Holdings Ltd.
By:	/s/ Kuo Zhang
For and on behalf of
Capital Ally Limited
By:	/s/ Kam Yuen
For and on behalf of
GM Investment Company Limited
By:	/s/ Kuo Zhang
For and on behalf of
Sinowill Holding Limited
By:	/s/ Dongping Fei
For and on behalf of
Huge Harvest Enterprises Limited
By:	/s/ Hengyang Zhou
For and on behalf of
Kingstate Group Limited
By:	/s/ Francis Kwok Cheong Wan
For and on behalf of
Trend Focus Limited

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