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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 $40 million with China Netcom Group (CNC) to expand the operator's existing IP-based PAS (Personal Access System) (iPAS(TM)) networks in the Shandong and Henan provinces, as well as in metropolitan Beijing.
(Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20031229/UTSLOGO )
"PAS has played an integral role in driving revenue growth for China Netcom nationwide, while market demand for traditional fixed-line telephony has decreased in the face of stiff competition from cellular service providers. Over the last two years, nearly 60 percent of new fixed-line subscribers at China Netcom are PAS users," said Simon Le, senior vice president of sales at UTStarcom China. "In a recent interview with Interfax in China, China Netcom officials repeated their commitment to providing PAS service, stating that they expected to see positive growth rates for PAS subscribers through 2008. In addition, the operator believes that they will be able to leverage existing PAS network infrastructure to deploy 3G services when licenses are issued."
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 successfully enabled users throughout China to enjoy the convenience of wireless communications. In Beijing, PAS subscribers topped 1.5 million by the end of 2004, 18 months after the service was launched in mid-2003. In the Shandong Province in eastern China, more than five million people currently subscribe for PAS service. More than 2.5 million people currently subscribe for PAS service in the Henan Province in central China, where PAS networks have been expanded four times since the service launched in 2000. Approximately 23 million of the total 65 million PAS users in China have subscribed for the service through China Netcom, which represents an 81 percent year-over-year subscriber growth rate with the operator from 2003 to 2004. UTStarcom builds more than 60 percent of China Netcom's PAS networks and provides over 55 percent of the operator's PAS handsets.
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 Netcom's ability to leverage the existing PAS network infrastructure for the deployment of 3G services, UTStarcom's ability to improve its gross margins 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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