UTStarcom Signs $37 Million Contract with China Netcom

UTStarcom was awarded a contract valued at approximately $37 million to help China Netcom expand its IP-based PAS (Personal Access System) network in 11 cities in China's Hebei Province. Currently, the penetration rate for PAS is only about 3 percent in the province, which has a total population of approximately 68 million residents.



UTStarcom noted that over the last several quarters, there has been a maturation of the PAS market in China as operators are spending less on new network construction and are currently focused on optimizing and expanding their existing networks. UTStarcom expects PAS revenues to be approximately $1.5 billion in 2005. Although some short-term volatility associated with the flattening of the PAS market may arise, UTStarcom expects to see increased gross margins on PAS handsets with the introduction of new ASICs in January 2005 that will reduce the cost of handsets for the end user. http://www.utstar.com