Jing Ou Yang – Investor Relations William Wong – Chief Executive Officer Robert Pu – Chief Financial Officer

Ladies and gentlemen, thank you for standing by for UTStarcom’s First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to introduce your host, Ms. Jing Ou Yang, Investor Relations Director for UTStarcom. You may begin.

Hello everyone and welcome to UTStarcom’s first quarter 2013 earnings conference call. Earlier today, we distributed our earnings press release and you can find a copy on our website at www.utstar.com. In addition, we have posted a slide show presentation on our website, which you can download and use to follow along with today’s call. On today’s call, we have Mr. William Wong, our CEO; and Mr. Robert Pu, our CFO. Before we get started, I will read the Company’s advisory on forward-looking statements. This call will include forward-looking statements relating to the company’s business, strategic initiatives initiated and the performance in the first quarter of 2013. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially and adversely from the company’s current expectations. This includes risks and uncertainties related to among other things, changes in the financial conditions and cash consumption of the company, figures in the composition of the company’s management and their effects on the company. The Company’s ability to realize anticipated result of operational improvements, and the benefit of the divestiture transactions, the ability to successfully identify and acquire or copyright technologies and business for inorganic growth and through integrated acquisitions. The ability to innovate and develop new products assumptions the company makes regarding the growth of the markets and the success of the company’s offering in the market and the company’s ability to execute its business plans and to manage regulatory matters, The risks and uncertainties also includes the risk factors identified in the company’s latest Annual Report on Form 20-F, and current reports on Form 6-K as filed with the Securities and Exchange Commission. The company is inaccurate of the strategic transitions and the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this conference call are based upon the information relevant to the company as of the date of this conference call which may change and the company assumes no obligation to update any such forward-looking statements. I will now turn the call over to our CEO, Mr. William Wong.

Thank you, Jing and hello to everyone. As Jing mentioned, you can follow along with today’s call by downloading the presentation from our website at www.utstar.com. Also, unless otherwise stated, all figures mentioned during the call are in US dollars. The introduction, let me begin on slide 5 and 6 by saying that how 2013 has begun, In the first quarter, we continued and advanced many of the strategic initiatives that we launched in late 2012 to reinvigorate the company. As you will remember, our intent is to accelerate the transition to higher growth, more profitable business lines redeploy capital and support higher return opportunities and establish a base of subscribers to value-added services that would generate a more predictable recurring revenue stream for our business. Our initiatives to successfully positioning the company to capitalize on important trends that were lasting effects on the way our traditional cable service and broadcast customers serve the end-user customers who are growing in number and sophistication of their media consumption mix. We truly believe that our efforts will result in a more profitable and competitive business model for the benefit of employees and customers and allow us to deliver greater value to shareholders over the long-term. We are now well along two full quarters in rolling out a strategic plan that we initiated as divesting the underperforming IPTV equipment business. As you have heard us describe in the past, our plan centers on establishing a TV-over-IP services platform through internal development as well as the acquisition of new technologies such as – we have gained access to through our investment in iTV Media and aioTV. This platform will turn UTStarcom into a leading provider of high-in-demand digital content, including local content for which there continues to be a strong demand as well as…

Thank you, William and hello everyone. Starting from slide number 12, I will discuss our first quarter 2013 financial results in more detail. Before I walk through the specific numbers, let me highlight that few key themes of the past quarter. First and importantly, revenue, gross profit and gross margins are stable on a sequential basis. However, these metrics decreased when considering the year-over-year comparisons. Second, we have started to benefit from aggressive and focused cost reduction efforts as demonstrated by the significant decrease in operating expenses in the first quarter. Moving forward, we will continue to monitor our OpEx and find ways to improve our cost structure. And lastly, we ended the quarter in a strong financial position with no debt and about $136 million in cash on balance sheet. We will use this liquidity to invest in our growth plans and other initiatives designed to increase shareholder value. Now I would turn to the specific results. In the third quarter of 2012, we divested the IPTV business. We will report the financial results of IPTV business separately as discontinued operations for all comparable periods, but only in the requirements to do so. Until then, at this point for better comparison of financial performance, we have prepared non-GAAP financial results, which focus on our broadband business and presents the IPTV business as discontinued operations. So for today’s purposes, I will only focus on our broadband business and exclude the already divested businesses from our discussion. Please turn to slide 13 for revenue. For the first quarter, revenue was $38.7 million, compared to $39.4 million for the first quarter of 2012, the slight decrease of revenue was mainly driven by decreased sales of our MSAN and MSTP products. Please turn to slide 14 and 15 for gross profit and gross…

Thanks, Robert. We remain pleased with the positive initial progress that is underway. As I said earlier, we are seeing the early indicators of success through our ability to weather challenging marketing conditions. Overall margin is steady and approach break-even operating income as planned. However, we are of course not claiming victory yet and there is a great deal more to do. Our outlook. Now please turn to slide 21 of the presentation. With respect to the immediate term, as mentioned on the last earnings call, this year will require focus and hard work as we invest in and build a platform for the future. And we currently view 2013 as a year of investment and continued transition. At the same time, the company presently expects to achieve a degree of incremental improvement in overall financial performance versus 2012. There will be a need to replace unprofitable revenue that was removed with the IPTV divestiture and revenue will be below last year while this process is ongoing and top-line is in transition. At the same time, with respect to operating performance, the company will focus on holding margins relatively stable by maintaining a similar product mix to 2012, as well as making additional progress with lowering operating expenses. The current outlook is based on constant currency exchange rates versus 2012 and as mentioned in our earnings release, the depreciation of the Japanese Yen may in fact have a negative impact on the our gross profit and gross margin. Looking to the future, we expect new strategic plan will in time result in a more predictable, recurring revenue stream and we expect to achieve accelerated rates of growth beginning in 2014. More specifically, as mentioned earlier in the call, we anticipate profit from the new TV-over-IP services to become the major…

(Operator Instructions) And our first question will come from (inaudible) Mirage Capital. Please go ahead.

Hi, thanks for taking the question. Just a couple of questions about some of the kind of reclassifications from things that were fully consolidated to business was fully consolidated the businesses that are consolidated in the equity method or certain other movements in different assets. Is there any reason that we should expect sort of further either operating or non-operating losses from some of these reclassification actions and then I have a couple of follow-ups?

Hi, this is Robert. I think you are referring to the iTV consolidation in last year and the equity method of accounting that started from Q1 of 2013. Actually, between the third quarter and Q1 of this year, from the second half of 2012, we accounted our investment in iTV via the cost method of accounting and after we made additional investment into iTV entity, we need to adopt equity method of accounting starting from Q1 in 2013. So that’s the background of the accounting treatment of our investment in iTV. And at the same time, we recognize that iTV Media is still at an investment stage and its top priority is to fully penetrate the market. For example, in Thailand, by expanding the number of subscribers and with the intention to realize revenue and profits in the future with the critical mass of subscribers in this market. So, at this point, iTV Media is at the investment stage and that the investors and whole of the company is expecting that we will potentially pick up more operating markets in the future quarters.

Okay, thank you. That’s helpful. Can you sort of give us some guidance about the magnitude of future investments you expect to make in iTV or other related entities or subsidiaries?

Sure, I mean firstly, let me comment on that we have about $136 million in cash at the end of Q1 and we have no debt at the end of Q1. So we believe we have sufficient liquidity to fund our future strategic growth plans. But also at the same time, what the management team is trying to do is to have a balance between further investments in our future growth. At the same time, make sure that we have sufficient liquidity for our core business and also we have sufficient funds for other initiatives as it creates our shareholder value.

Okay, thank you. And just one more question. the cash that’s in China and/or it’s RMB denominated, will there be any sort of – can you help us understand what the regulatory or tax hurdles might be in moving that cash to the United States at some point when you decide to do so? And just, can you give us a sense of to the extent that that cash is in short-term investments, how you can get at that possibility for our impairment or losses on those investments? I am thinking about something for example like, auction rate securities that we have in the US which are pretty widely used in a crisis end up being worth less than $1 on the dollar. So can you give us a flavor for what from the short-term investments are in RMB in China? And what difficulties you would face in moving that cash?

Sure, I think there are two points here I need to address. The first point is, moving cash out of China to the United States and secondly is our investments in China in RMB denominated investment vehicles. So on the first point, a typical way of moving cash from a Chinese subsidiary to its parent company in the US, we can do it through a dividend distribution. But however as you might be aware that, if we do that, there is a withholding impact involved and if you – and generally speaking, if a wholly-owned subsidiary of the US parent company distribute dividend from China directly to the US the withholding tax rate is up 10%. So that’s on the first one. And on the second point is, we have an investment policy that we can only invest in the so-called risk free assets. So for short-term investment and also our cash we either put it into, there are liquid assets that equivalent of checking accounts or into a money market instrument.

Thank you very much.

(Operator Instructions) Thank you. There are no further questions at this time. I would like to turn the conference back to management for any closing comments.

Thank you for joining us on our first quarter earnings conference call. We look forward to updating you on our second quarter 2013 in a few months. Feel free to get in touch with us anytime if you have further questions, concerns or comments. Thank you everyone.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.