PowerPoint Template

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• Corporate Presentation
• NASDAQ UTSI
• August 2011

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Disclosure Forward Looking Statements
This investor presentation contains
forward-looking statements, including statements
regarding the Company's strategy to reduce
operating expenses, ability to achieve
profitability, investment in selective products
and certain geographic regions, diversification
of business and customer base, transition to a
new business model and anticipated or assumed
future financial results. Forward-looking
statements are based on current expectations,
estimates, forecasts and projections about the
Company, the Companys future performance and the
industries in which the Company operates as well
as on the Company management's assumptions and
beliefs. These forward-looking statements are
only predictions and are subject to risks and
uncertainties related to, among other things, the
ability of the Company to realize anticipated
results of operational improvements, increase
bookings, successfully transition to a new
management team and headquarters location and
execute on its business plan, as well as risk
factors identified in its latest Annual Report on
Form 10-K, as amended, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, as filed
with the Securities and Exchange Commission.
Therefore, actual results could differ materially
and adversely from the Company's current
expectations. We undertake no obligation to
update these forward-looking statements to
reflect events or circumstances occurring after
the date of this investor presentation. The
Company is in a period of significant transition
and in the conduct of its business is exposed to
additional risks as a result. This investor
presentation also includes financial guidance and
information about the Company previously
disclosed during the Company's 2009 and 2010
earnings conference calls, restructuring
announcements on December 18, 2008 and November
9, 2009 and other filings with the Securities and
Exchange Commission. Such guidance and
information reflects the Companys information
and expectations as of those dates and this
presentation is not intended to confirm or update
that information and expectations.
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Agenda
Corporate Overview
Market Dynamics Growth Strategy
Financial Overview and Outlook
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CORPORATE OVERVIEW
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Company Introduction

• A leading provider of interactive, IP-based
  network solutions in iDTV, IPTV, Internet TV and
  Broadband for cable and telecom operators
• Technology and services expand and help modernize
  communications networks, giving operator
  customers the capability to provide their
  subscribers with interactive communications
  experiences while opening up increased revenue
  opportunities for operator clients
• The new service business represents a business
  model innovation that leverages UTStarcoms
  current core technology and management background
  to generate more recurring, higher margin
  returns.

Share Price 1.37 (as of July 30, 2011) Shares
Outstanding 156.1 m Market Cap 213.9 m (as of
June 30, 2011) Legal Counsel Wilson Sonsini
Goodrich Rosati Auditors Price Waterhouse
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Investment Highlights

• Focused on achieving breakeven in 2011
• Strong existing relationships with leading
  telecom, cable and media players in China and
  across the rest of Asia
• Well positioned to benefit from Chinas Three
  Network Convergence policy and development
• Diversifying business model into high-margin new
  service business (Operation Support Business)
  with recurring revenues
• Diversifying customer base to broaden profit
  opportunities
• Strong cash position and no debt

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Our Positioning and Growth Strategy
A leading provider of interactive, IP-based
network solutions in iDTV, IPTV, Internet TV and
Broadband to cable and telecom operators
Strategy 1 Return to China
Strategy 2 Telecom and Cable in Parallel
Strategy 3 Equipment AND Service

• Enables focus on Chinese and Asian markets
• Leverage Three Network Convergence (TNC) policy
  in China
• Senior management close to client decision-makers
• Improved internal communication lower costs

• Core IP technology applied across different
  networks
• Strong competitive edge and opportunity with both
  telecom and cable operator

• Demand for interactive services creates
  opportunity for equipment AND services revenues
  with higher margin earnings
• New service business model moves UTStarcom up the
  value chain and closer to interactive TV operators

Our existing telecommunication equipment
products, RollingStream technology and sales
channels are the foundation of new service
business, which taps a major opportunity in video
content services over the broadband network and
internet.
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RollingStream Technology
SOLUTION AND VALUE TO CUSTOMER PRODUCTS OR SERVICE PROVIDED TARGET CUSTOMERS
RollingStream Technology provides customers market -leading interactive TV solutions RollingStream enables operators to provide IPTV, iDTV, Internet TV, mobileTV, video information and other industrial applications. Hardware includes Infrastructure Components Terminals 1.Telecom operators 2. Cable operators 3. TV stations and content license holders who, in China, run broadcast control platforms
Video Storage and Streaming Servers
OSS
IP STB
Dual-mode STB
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Broadband and NGN Solutions
SOLUTION AND VALUE TO CUSTOMER PRODUCTS OR SERVICE PROVIDED TARGET CUSTOMER
Broadband Solution provides high bandwidth network infrastructure for communications networks PTN MSTP G/E-PON 1.Telecom operators 2. Cable operators
NGN Solution Provides a multi-service IP-based soft switch system for voice, data, mobile and multimedia operations 1.Telecom operators 2. Cable operators
TN725
TN705
NetRing 4K
NetRing2500
BBS 4000
ONU
Media Gateway
Call server
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• Market Dynamics Growth Strategy

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Chinas Three Network Convergence a growth
catalyst for UTStarcom

• Three Network Convergence (TNC) is the Chinese
  government policy dedicated to integration of
  telecom, broadband and cable TV networks
• Three Network Convergence related market will
  reach RMB 688B over the next three years,
  including RMB 249B on equipment and network
  buildout and RMB 439B from interactive media user
  demand

Pilots concluded and expansion drives ahead
Focused on cable / teleco two-way entrance
National Implementation
Pilots Conducted
Policy Launched
20132015
2010
20102012
Source iChina Research Center, 2010.4, Analysis
of Market Size, Industry and Region for
Three-Network Convergence and policy directives
issued by Chinas State Council.
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Strategy 1 Opportunities in Other Asian Markets
Market Focus Area UTStarcoms Achievements
South Asia Focused on IPTV and Broadband IPTV Cooperate with MTNL, BSNL, Bharti, SLT and other leading South Asia operators to secure our market leading position Exploring a joint venture with local partner in India with better government relations and local market support to retain and extend leading position in IPTV sector Received the first Purchase Order of IPTV systems from TOT in Thailand in the fourth quarter of 2010 Broadband Currently have more than 30 market share
Japan Focused on Broadband 50 of SoftBank Broadband (SBB)s MSTP transmissions. SBB is currently Japans 3rd largest telecom operator Preferred PTN supplier of next generation IP transmission equipment for SBB Received sizable orders of PTN product from Japan following the successful completion of previously disclosed field trial in 2010
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Strategy 2 Parallel Growth Opportunities
Service Cable Telco

• TNC will increase opportunities with cable and
  telecom operators because of infrastructure
  investment
• Our Broadband, RollingStream video platform and
  mSwitch NGN solutions help meet the TNC needs of
  both sectors

Interactive video services
4million (iDTV)
6.7million (IPTV)
Broadband service
lt5million
gt100million
Bi-directional network percentage
lt25
100
Voice services
none
gt1 billion
TV and Digital TV service
187 million 88 million
none
Source SARFT Report January 2011 and UTStarcom
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Strategy 3 Our Operational Support Services

• RollingStream platform allows our clients to
  provide end-to-end solutions including, video
  content service and other value added services
  like on-line gaming, on-line shopping and video
  phone service through their networks
• Cable network operators need partners that can
  provide continued technological and operational
  support services for these platforms
• Operational Support Services (OSS) expands our
  revenue stream with higher margin, recurring
  revenues

Equipment Sales Related Service Business
Enterprise Operators
TV and Cable Operators
Telecom Operators
IP Signage Platforms
iDTV Platforms
IPTV, Internet TV Platforms
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An Overview of the New Service or Operational
Support Services Business
Content Producers /Providers
Ad Management Solutions
RollingStream Video Platform
VAS Solutions
Content Distribution
Internet TV Platform by Stage Smart
Acquisition
Mobile TV Subscriber Base
IPTV/iDTV Subscriber Base
Internet TV Subscriber Base
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iTV.cn Internet TV for Chinese outside China
Q2 2011
Q3 2011
Q4 2011
Launched non-commercial trial
launch subscription service to distribute content
globally

• Non-commercial trial underway in 300 households
  mostly in North America
• Integrated multi-screen viewing from a single
  managed platform
• Time and location shifting
• Reliable HD streaming
• Multi-language programming
• Value-added interactive service, such as
  distance-learning, gaming and e-commerce

Education
Social
Shopping
Gaming
Radio
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• Financial Overview and Outlook

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Second Quarter 2011 Highlights
Strong Financial Performance Effective Cash
Management

• Net Income of 11.6 million, or basic earnings
  per share of 7 cents UTStarcoms first
  profitable quarter after 24 consecutive loss
  making quarters
• Revenues of 92.5 million, a 26.4 / 19.3
  million increase, compared to the same period of
  2010
• Gross profit margin of 37.6, compared to 31.3
  in same period of 2010 and 31.1 in Q1 2011
• Operating income of 9.7 million
• Positive operational cash flow
• Cash balance of 316.4 million in cash, cash
  equivalents, and short-term investments

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Revenue Trend and Significant Items

• 92.5 million in Q2 2011, a 26.4 or 19.3
  million increase, compared to 73.2 million in Q2
  2010 and a 50.9 or 31.2 million increase when
  compared to Q1 2011.
• 1H 2011 total revenue was 153.8 million, an 0.1
  or 0.2 million decrease, compared to1H 2010

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Booking Trend in Q2

• Without PAS deferred revenue, book-to-bill ratio
  for the second quarter was 0.85.
• With the PAS deferred revenue, book-to-bill ratio
  was 0.64.
• Actual booking amount increased from Q1 2011
  however book to bill ratio dropped due to
  significantly higher revenue in Q2 2011.

US (mm)
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Gross Profit Increased

• Gross margin for the second quarter of 2011 was
  37.6 as compared to 31.3 in the second quarter
  of 2010 and 31.1 in the first quarter of 2011.
• Gross profit was 34.8 million in the second
  quarter of 2011 compared to 22.9 million in the
  corresponding period of 2010.

US (mm)
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Continued Progress in Cost Cutting
US (mm)
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Quarterly Profit Achieved
Operating income of 9.7 million
US (mm)
Net income of 11.6 million
US (mm)
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Segment Reporting
US (mm)
Revenue by Segment Revenue by Segment Q2 2011 Q2 2010
Equipment Sales Equipment Sales 81.3 62.6
Service Sales Equipment-based 11.1 10.6
Service Sales New OSS-based 0.1 -
Total Total 92.5 73.2
Revenue by Segment Revenue by Segment 1H 2011 1H 2010
Equipment Sales Equipment Sales 134.2 131.8
Service Sales Equipment-based 19.4 22.2
Service Sales New OSS-based 0.2 -
Total Total 153.8 154.0

• Note Deferred revenue related to PAS is
  included in equipment sales through the end of
  2011 at the rate of 23 million per quarter.
  Gross margin associated with the PAS deferred
  revenue is approximately 35.

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Balance Sheet Deposits

• Strong cash balance of 316.4 million in cash,
  cash equivalents, and short-term investment
• Zero debt

Cash Balance by Region
Cash Balance by Currency

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Positive Cash Flow

• Positive quarterly operational cash flow of 12.0
  million resulted from
• 1) High collections caught up from collections
  delayed in Q1 2011
• 2) More effective cash management
• 3) Strict control over inventory purchase

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Reiterating 2011 Financial Outlook
Reiterate

• Total revenue targeted to be within the range of
  300 320 million (includes PAS deferred
  revenue)
• Targeting annualized operating expenses of less
  than 100 million
• Targeting breakeven in 2011 on a full year basis

Delay in progress

• Our target of generating 10 of total sales in
  2011 from new OSS business is subject to the due
  diligence process and detail terms and condition
  negotiation on acquisition targets and revenue
  sharing projects which may result in delay.

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INVESTOR RELATIONS CONTACTS

• Ms. Jing Ou-Yang
• T 8610 8520 5153
• E jouyang_at_utstar.com