Greetings. And welcome to the UTStarcom’s Third Quarter 2010 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host for today Ms. [Jane Ouyang], UTStarcom’s IRO. Please go ahead.

Hello, everyone. Welcome to UTStarcom’s third quarter 2010 earnings conference call. Earlier today, UTStarcom announced the financial results for the third quarter of 2010. That press release is available on the company’s website at www.utstar.com. On today’s call, we have Mr. Jack Lu, our President and CEO; and Mr. Edmond Cheng, our CFO. I will now read the company’s advisory our forward-looking statements. This call will include forward-looking statements on topics that include but may not be limited to the company’s restructuring initiative, IPTV revenues, gross margins and projected business model. Forward-looking statements are generally indicated by such words as will, expect, estimates, those, plans, or similar words. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially. These include risks and uncertainties regarding the ability of the company to realize anticipated results of operational improvements, the company’s ability to cause results, certain investments related to a strategic partnership, revenues in the new business model, successfully transitioning to new business -- new management team and the headquarters locations, excluding our business plan and managing regulatory materials, as well as risk factors identified in latest annual report on Form 10-K, quarterly reports on Form 10-Q and the current reports on Form 8-K as filed with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. In addition, today’s call will include certain non-GAAP financial measures. The most directly comparable GAAP information, and a reconciliation between the non-GAAP and GAAP figures is attached to the earnings release issued earlier today and filed in the Form 8-K with the Securities and Exchange Commission. I will now turn the call over to our President and CEO, Mr. Jack Lu.

Thanks for joining our call today. Edmond and I are conducting this call together from our offices in Beijing, where it is 8 p.m. As many of you know, today is the first time I am participating as a CEO. On today’s call, I would like to talk about our management’s transition and briefly summarize our business strategy, and then turn the call over to Edmond, who will provide greater detail around the financials for the quarter. Regarding the management’s transition, first I would like to thank my predecessor Mr. Blackmore the work he has done. His effort has brought us a good deal off the way and we intend to build on the momentum he created. With the close of the BDA investment and addition of three new Board members, we have accelerated the headquarter move. I am happy to say that Edmond, myself and most of our top management are now based in Beijing two time or spend significant amount of time here. As new management, we are trying to start our leader -- relationships with the investment community on the right foot. To this end, we recently hired new IR professionals based in China and the U.S. to help us to continually improve the level of openness and transparency that we maintained with the investment community and build trust, we know we need from the Street. Moving on to our corporate strategy, you will have seen the three shifts in our business strategy that we announced recently. I’m glad to have this opportunity to share more about this today. As mentioned in the press release, the role had for UTStarcom multimedia and broadband equipment-based business faces a steep climb on its own. We all recognize the need to grow the topline, increased profitability and lower cash burn.…

Thank you, Jack. Hello, everyone. Before discussing the key business unit performance, I will start by highlighting the companywide numbers, presented on both our GAAP and our non-GAAP basis. In the third quarter of 2010, GAAP revenues were $61.4 million compared with $70.5 million for the same period a year ago. The year-over-year decrease was primarily due to the onetime of our handset business, which generated $15.6 million in quarter three last year. Q3 revenue was in line with expectations we established in the announcement we pulled out two weeks ago. For the quarter, we have gross margin of 19.7%, which was 11% lower than the second quarter. And we expect the impact of the foreign significant items, $8.5 million in additional inventory reserve and a $1.9 million onetime reserve for unrecoverable output VAT did negative impact our offset by a gain of $5.6 million third-party commission payable, which was previously accrued and has passed the statute of limitations. Without these items above, gross margin will have been in the high 20s. Our GAAP operating expenses were $35.4 million, a decrease of $22.6 million from the same period a year ago. These are results of restructuring and other cost reduction initiatives. We did OPEX, we have booked the foreign significant items. During the quarter, we recorded approximately 2.3 million of restructuring charges. We booked our reserve for prepaid expected income tax of following tax credit of $2.5 million, which we deemed are not recoverable. A total gain of 1.4 million on our divestitures in the sale of China and color PDSN and converting our India business model from a direct to an indirect sales and services model. With the completion of closing down of our U.S. facilities, the divestment of color and the European reseller deal as mentioned above. We…

Thanks, Edmond. Turning to our outlook for 2010 as we are still in the early days of our leadership of the company, I would like to refrain from providing guidance beyond the three-point plan for profitability that was established by previous management and announced in our announcement two weeks ago. Moving forward, we are considering change in how we report on our business progress to better reflect and to give visibility into our new business. As such, we are committed to coming up with financial and the non-financial metrics that indicate how we are mining the new themes of revenue opened by the strategic shifts, I described earlier. To reiterate, this strategy includes return to China, telecom in parallel with cable and finally, the equipment and services. At this point, I’d like to ask the operator to open us for the Q&A.

Thank you. (Operator Instructions) Your first question comes from the line of Liu Jie with Auriga USA. Liu Jie – Auriga USA: Hello. Hi. Good morning, everyone. Got a few questions for you. The first is, you significantly lowered your operating cash burn in the quarter, so I’m wondering, what did you do exactly to achieve that. And how should we think about your operating cash flow going forward?

Jack. Thank you for raising the question. First of all, we have lowered our operating expenditure and that’s the critical driver for reducing cash burn. And secondly, we have been very focused on working capital management and that would also provide additional cash flow to reduce our cash burn. And going forward, you will see that we continue to focus on these two areas and we continue to drive improvement on operating cash flow as we have that been demonstrated in the last three quarters. Liu Jie – Auriga USA: Okay. So when do you expect it to achieve, say, operating cash flow breakeven? In two quarters or three quarters?

At this point in time, it is still a little bit early for us to make a prediction. We will certainly, later on, maybe in our Q4 earnings announcement, we will provide guidance at that point in time to you and the rest of the MNAS community. Liu Jie – Auriga USA: Okay. All right. So on your OPEX, I know earlier you said that your OPEX for 2011 will be less than 100 million. Could you be a bit more specific, like is it 19 million, 18 million? Do you have a target?

At this point, we still need some more time to work out the details. And as I mentioned before, we will actually provide guidance in our Q4 earnings call. Liu Jie – Auriga USA: Okay. All right. The other question regarding the OPEX is you have a $2 million plus restructuring charge this quarter. Do you foresee any future restructuring charges?

As you can see, we’ve almost completed our restructuring for debt measure. So you had anticipated that these restructuring charges will be dwindling down in the next few quarters. Liu Jie – Auriga USA: I see. Okay. Okay. You also gave a lot of color on the book to bill ratio with and without the past revenue amortization. Do you foresee your book to bill ratio to improve significantly with the past revenue included in the next couple of quarters? Obviously, I know that depends on whether you can sign the [BSNAL] contract or not, but any color will be very helpful.

I understand what you are looking for, Jack. But as you can understand in the equipment business, our recruitment base, it is very unpredictable. And that’s exactly why Jack, our CEO is looking at the three strategic shifts that we are looking at. Primarily, it is to bring the company to a different level of performance with recurring revenue and predictable revenue stream. And if we look at this level of business activities, then the booking numbers will not be as meaningful as the equipment based business. So we will be different metrics for the new business going forward. At this point in time, I would say we would defer that to maybe our Q4 earnings call and we’ll provide more clearer guidance. Liu Jie – Auriga USA: Okay. That’s fine. Thank you.

Thank you.

Thank you.

Thank you. (Operator Instructions) Thank you. There are no further questions at this time. I will turn the conference back over to management for closing remarks.

Thank you for joining us on our third quarter 2010 earnings conference call. We look forward to updating you on our fourth quarter 2010 results in a few months time. Feel free to get in touch with us any time if you have further questions, concerns or comments. Thank you, everyone.

Thank you. This concludes today’s conference call. You may now disconnect.