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Rumor: UTStarcom to Restructure Businesses

21st Century Business Herald, 5/26/09

An insider at Chinese network solution provider UTStarcom (Nasdaq: UTSI) has divulged that the company's reorganization plan will soon be disclosed. Early in May, senior management told employees in an internal email that UTStarcom's strategic direction will be formed by the end of the month. The insider stated that the "strategic direction" is the restructuring.

The insider has stated that there are two restructuring plans being discussed within UTStarcom. One is to sell UTStarcom's China region business as a whole; the second is to keep core assets, and gradually peel off non-core business. If the latter is chosen, the company will surely keep its IPTV business.

UTStarcom's business focuses on IP telecom, with products extending into wireless, broadband, 3G and terminal sectors. However, along with the decline in the personal handyphone system (PHS) market and the slide in its 3G business, the IPTV business has become its most valuable asset. Potential buyers for UTStarcom include TCL and Cisco.

Keywords: corporate restructuring 3G IP IPTV PHS telecom UTSI UTStarcom wireless

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