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ALAMEDA, Calif., Jan 19, 2005 /PRNewswire-FirstCall via COMTEX/ -- UTStarcom, Inc. (Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions and services, today announced that it has signed contracts valued at approximately $120 million with China Telecom Corporation (CTC). These contracts will expand the operator's existing IP-based PAS (Personal Access System) (iPAS(TM)) networks in the Jiangsu, Zhejiang and Sichuan provinces in China.
(Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20031229/UTSLOGO )
"Over the last several months, China Telecom officials have publicly reiterated that they will continue to invest in PAS even when 3G licenses are issued, as it is viewed as a complementary service to 3G that will target a different demographic," said Ying Wu, chief executive officer and chairman of UTStarcom China. "Although we have seen a slowdown of operator investment in new PAS networks in China, the continued market demand for PAS services drives the necessity for additional expansion of existing network capacity as represented by this contract. We believe the demand for affordable wireless telecommunications service in China, especially with the urbanization of the western provinces over the next 10 years, will continue to drive the growth of PAS in the future."
As the company recently noted, there have been several changes in the structure of the telecom industry in China over the last several months, including restructuring of the management teams at the major operators and centralization of procurement procedures. These changes were implemented late in the fourth quarter of 2004 and have lengthened the time it takes to achieve final acceptance and revenue recognition.
PAS has become a mainstream telecommunications service in China with more than 65 million subscribers currently. PAS networks have been deployed in almost all major cities in China's 31 provinces, autonomous regions and municipalities by the two major fixed-line operators in China, China Telecom and China Netcom. In 2004, UTStarcom collaborated With China Netcom and China Telecom to achieve short message service (SMS) interconnectivity for nationwide PAS service in China, and interconnection with cellular networks is ongoing and has been partially achieved in certain regions. UTStarcom continues to develop innovative PAS technologies, including PIM card-embedded PAS handsets that store user information and make service management more efficient.
PAS Wireless Access Solutions
Field proven in the fastest growing telecom market in the world, UTStarcom's PAS solutions offer subscribers citywide wireless voice and data services at affordable price points. Using UTStarcom's IP next-generation softswitching technology, the PAS solution is designed to enable operators to extend their fixed-line networks with feature-rich wireless services, rapidly expand networks to meet increased subscriber demand, and seamlessly integrate broadband and future 3G technologies into their service portfolios.
UTStarcom's PAS and iPAS(TM) (IP-Based Personal Access System) services offer service providers and subscribers unique and attractive advantages over competing wireless services. For operators, PAS is designed to provide a two-to-three year return on investment (ROI), increased average revenue per user (ARPU), and the ability to support new applications and diversified value-added services. For subscribers, PAS is designed to provide affordable mobile telecommunications service with an array of features. Besides high-quality voice service, UTStarcom PAS users enjoy short messaging service (SMS), C-MODE based web browsing, 64Kbps wireless Internet access, and location-based services.
UTStarcom's proven expertise in IP technology and its mSwitch(TM) converged next-generation softswitching platform give it an advantage over other global telecom vendors. Using UTStarcom's converged switching platform, operators can deploy iPAS, 3G, and wireline/broadband services side-by-side utilizing a common switching infrastructure to address a wide range of user needs and interests. With more than 55 million lines of next-generation softswitching deployed throughout Mainland China and Taiwan, Vietnam, Thailand, Africa, and Latin America, UTStarcom is the worldwide leader in IP core networking.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions and international service and support. The company sells its wireline, wireless, optical and switching solutions to operators in both fast growth and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient end-to-end IP networks. Founded in 1991 and headquartered in Alameda, California, the company has research and design operations in New Jersey, China, and India. UTStarcom is a FORTUNE 1000 company.
For more information about UTStarcom, visit the company's Web site at www.utstar.com.
Forward-Looking Statements
The foregoing statements regarding, without limitation, the deployment of UTStarcom's products in China, growth rates for PAS subscribers, China Telecom's continuing investment in PAS, the urbanization of China over the next ten years, UTStarcom's ability to improve its gross margin and decrease product costs and operators' return on investment, increased average revenue per user and value-added services related to PAS are forward-looking in nature and are subject to risks and uncertainties that may cause actual results to differ materially. These factors include rapidly changing technology, possible downturns in the telecommunications market in China and worldwide, the termination of contracts, partnerships or alliances and other uncertainties such as changes in governmental regulation and licensing requirements and economic and political stability in China and worldwide. UTStarcom also refers readers to the risk factors identified in its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the Securities and Exchange Commission.
SOURCE UTStarcom, Inc.
Chesha Kamieniecki, Senior Manager of Investor Relations, of UTStarcom, Inc., +1-510-749-1560; or media, Stephanie Gallagher of Engage PR, +1-510-748-8200, ext. 213, or stephanie@engagepr.com, for UTStarcom, Inc.
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