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UTStarcom Releases Financial Results for the First Quarter of 2007

ALAMEDA, Calif., Oct. 17 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions
and services, today reported financial results for the first quarter of 2007.
The Company also announced it expected to file its financial results for the
second quarter of 2007 as soon as practicable, at which time the Company will
host a conference call with investors to discuss both first and second quarter

UTStarcom Releases Financial Results for the First Quarter of 2007
UTStarcom Releases Financial Results for the First Quarter of 2007

Company Expects to Report Second Quarter Financial Results As Soon As Practicable - At Which Time The Company Will Host a Conference Call to Discuss Both Q1 and Q2 Results


Net sales for the first quarter 2007 were $475.9 million. Gross margins
for the first quarter 2007 were 15.8% and net loss for the quarter was $54
, or a loss of ($0.45) per share.

'Although we are disappointed with our first quarter results, as we begin
to look forward, we are encouraged by the number of new contracts and new
customers we signed recently as well as the momentum of our core businesses,
particularly for IPTV in China and India,' stated
Fran Barton, Chief Financial
Officer of UTStarcom, Inc.

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 broadband,
wireless, and handset solutions to operators in both emerging 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 the United States, China, Korea
and India. UTStarcom is a FORTUNE 1000 company.

For more information about UTStarcom, visit the company's Web site at

Forward-Looking Statements

This release includes forward-looking statements, including the foregoing
statements regarding the Company's expectations with respect to the timing of
its filing of its financial statements for the second quarter of 2007 with the
Securities and Exchange Commission. These statements are forward-looking in
nature and subject to risks and uncertainties that may cause actual results to
differ materially. These risks include the ability of the Company to complete
its preparation of its Form 10-Q for the quarter ended June 30, 2007. The
Company also refers readers to the risk factors identified in its latest
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.

                               UTStarcom, Inc.
                    Condensed Consolidated Balance Sheets
                                (in thousands)

                                                 March 31,      December 31,
                                                   2007            2006
                   ASSETS                       (Unaudited)    (As reported)
    Current assets:
      Cash, cash equivalents and short-term
       investments                               $572,918        $671,169
      Accounts receivable, net                    352,936         406,080
      Notes receivable                              6,161           5,060
      Inventories                                 654,662         635,838
      Prepaids and other current assets           132,004         101,795
      Short-term restricted cash and
       investments                                  5,620          16,666
         Total current assets                   1,724,301       1,836,608
    Property, plant and equipment, net            210,042         213,155
    Long-term investments                          45,087          47,809
    Goodwill                                        3,063           3,063
    Intangible assets, net                         52,397          56,443
    Long-term deferred costs                      172,895         176,649
    Other long-term assets                         39,575          40,223
         Total assets                          $2,247,360      $2,373,950

    Current liabilities:
      Accounts payable                           $265,519        $304,869
      Short-term debt                             378,416         102,758
      Income taxes payable                              -           2,483
      Customer advances                           312,363         265,812
      Deferred revenue                             96,874          95,742
      Other current liabilities                   191,807         271,400
         Total current liabilities              1,244,979       1,043,064

    Long-term deferred revenue                    251,369         261,014
    Long-term debt                                    521         275,161
    Other long-term liabilities                    21,881          13,858
         Total liabilities                      1,518,750       1,593,097

    Minority interest in consolidated
     subsidiaries                                   6,029           6,493
    Stockholders' equity:
      Common stock: $0.00125 par value;
       750,000,000 authorized shares;
       121,299,113 issued and 121,294,645
       outstanding at March 31, 2007 and
       December 31, 2006                              152             152
      Additional paid-in capital                1,208,349       1,205,592
      Accumulated deficit                        (549,577)       (494,244)
      Accumulated other comprehensive income       63,696          62,899
      Treasury stock: 4,468 shares held in
       treasury at March 31, 2007 and
      December 31, 2006                               (39)            (39)
    Total stockholders' equity                    722,581         774,360
       Total liabilities, minority interest
        and stockholders' equity               $2,247,360      $2,373,950

                               UTStarcom, Inc.
                Condensed Consolidated Statement of Operations
                   (in thousands, except per share amounts)

                                                 Three months ended March 31,
                                                    2007              2006
                                                (Unaudited)      (As restated)
     Net sales                                    $475,902          $601,981
     Cost of sales                                 400,617           478,190
         Gross profit                               75,285           123,791

    Operating expenses (income):
         Selling, general and administrative        79,837            83,727
         Research and development                   43,662            46,402
         Amortization of intangible assets           4,046             4,925
    Total net operating expenses                   127,545           135,054

    Operating loss                                 (52,260)          (11,263)

    Interest (expense) income                       (1,815)               32
    Other income, net                                3,970             3,568

    Loss before income taxes, minority
     interest and equity in loss of
     affiliated companies                          (50,105)           (7,663)
    Income tax expense                              (4,341)           (2,839)
    Minority interest in losses of
     consolidated subsidiaries                         464               556
    Net loss                                      $(53,982)          $(9,946)

    Loss per share - Basic and diluted              $(0.45)           $(0.08)

    Weighted average shares used in
     per-share calculation:
         - Basic and diluted                       120,900           120,600

                               UTStarcom, Inc.
                Condensed Consolidated Statement of Cash Flows
                                (in thousands)
                                                         March 31,
                                                   2007             2006
    CASH FLOWS FROM OPERATING ACTIVITIES:      (Unaudited)      (As restated)
    Net loss                                    $(53,982)         $(9,946)
    Adjustments to reconcile net loss to
     net cash provided by (used in)
     operating activities:
       Depreciation and amortization              14,744           17,476
       Net (gain) loss on sale of asset           (2,699)           4,708
       Stock-based compensation expense            2,755            2,425
       (Recovery of) provision for doubtful
        accounts                                  (5,281)             892
       (Recovery of) provision for deferred
        costs reserves                            (1,504)             795
       Other                                         266             (578)
       Changes in operating assets and liabilities:
         Accounts receivable                      60,296           28,787
         Inventories                              (2,422)          (4,337)
         Deferred costs                           (5,222)           3,248
         Other assets                            (31,433)          (6,771)
         Accounts payable                        (41,324)          18,077
         Income taxes payable                      5,969           (2,020)
         Customer advances                        44,298           43,097
         Deferred revenue                        (11,790)           8,789
         Other current liabilities               (79,336)         (50,970)
           Net cash provided by (used in)
            operating activities                (106,665)          53,672
       Additions to property, plant and
        equipment                                 (5,221)          (3,162)
       Proceeds from the disposition of an
        investment interest                        1,800                -
       Proceeds from the sale of
        semiconductor design assets                    -           19,965
       Change in restricted cash and long-
        term investments                          10,365          (17,037)
       Purchase of short-term investments        (15,576)         (17,041)
       Proceeds from sale of short-term
        investments                               10,483           13,309
       Other                                         (70)             499
         Net cash provided by (used in)
          investing activities                     1,781           (3,467)
       Proceeds from borrowings                   64,621           62,370
       Payments on borrowings                    (64,676)         (89,948)
       Other                                        (654)          (3,184)
         Net cash used in financing activities      (709)         (30,762)
    Effect of exchange rate changes on
     cash and cash equivalents                     2,120            2,374
         Net increase (decrease) in cash and
          cash equivalents                      (103,473)          21,817
    Cash and cash equivalents at
     beginning of period                         661,623          645,571
    Cash and cash equivalents at end of period  $558,150         $667,388

    Supplemental disclosure of cash flow information:
    Cash paid:
       Interest                                   $5,388           $2,511
       Income taxes                               $2,788           $3,801
    Non-cash operating activity:
         Accounts receivable transferred to
          notes receivable                        $9,240           $8,977

SOURCE UTStarcom, Inc.