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 premium licensed studio content, internet content and other value-added services. At the same time, we have implemented an operating structure that will maximize the potential of business units and foster innovation and collaborations, while maintaining disciplined control of operating costs. Indeed, we are already seeing the benefits of the changes we have taken to transform the company. In the first quarter, our operating results were broadly in line with our internal expectations for the period. From an operating perspective, we are nearly reaching break-even operating income if you strip away the two one-time charge items. Further, we made significant progress in lowering operating expenses as we planned and work hard to hold our overall gross margin relatively stable during this time of transition and repositioning. This is a testament to the strategic plan and the quality of the new management team that is in charge with its execution. Update on progress. Now, please turn to slide 7. Let me also mention some specific operating achievements from the quarter that support our strategy. iTV, let me provide an update on iTV Media which continues to make gains with its very successful commercial launch in Thailand through a strategic partnership with that country’s national telecommunications provider, TOT. This is the first full scale nationwide launch of iTV Media’s TV-over-IP services. In the first quarter, the number of subscribers of iTV’s offering in Thailand exceeded 30,000, up from just a few thousands since the last time we spoke. This shows the strong demand for these services as consumers seek a more personalized and mobile video experience. It also underscores how we can use our existing relations with broadband service providers to launch new services either those that we develop internally, or those developed by partners like iTV. Also in the first quarter, we further expanded our relationship with iTV by extending a $5 million convertible loan. We are thrilled to have such a close relationship with iTV. It provides an important contribution to the subscriber base we aim to develop and it’s a tangible validation of the demand for the products and services we want to offer and the business model through which we will offer it. aioTV. Moving for a moment to aioTV, in which UTStarcom acquired a significant minority ownership stake last November and it’s worth noting that aioTV has recently received a prestigious recognition from the analysts as the renowned Gartner Group who selected it as one of the four vendors essential for all digital media businesses. Gartner specifically recognized aioTV for a solution that quickly enables service providers, broadcasters and cable networks to deliver both live and on-demand video content through a portal that consumers can customize and access on various connected devices. This is critical definition that underscores how the market for media consumption is changing and the role that we can play in it with partners like aioTV. Asset disposals. It is important to note that we continued divesting non-strategic assets in the first quarter. As you can see on slide 8 of the presentation, in March, we disposed our Next Generation Network or NGN-related assets. In April, we disposed our DOCSIS-EOC-related assets. Both disposals support our overall strategy of focusing on high margin media services and broadband products, while maintaining vigorous cost controls. With all this said, what we have seen in the first quarter of 2013 is very encouraging both in terms of our own performance as well as the general direction of the market. Cable and broadband service providers and broadcasters are increasingly eager to integrate TV-over-IP technologies and services into their systems to deploy rich content on demand to a variety of devices. This is a strong validation of the business model we are pursuing. As this shows the strong momentum underlying the market opportunities that the new UTStarcom will capitalize on. If anything, we believe these trends are accelerating. And as we have said, we expect profit from the new TV-over-IP services to become the majority contributor for UTStarcom by 2015 as the gross margins in that part of the business is expected to be exceeding 50%. Everything that we see in the market today reassures us that these goals are indeed attainable with the business model we are pursuing. Before I turn the call over to Robert to go over the financial details for the first quarter, I want to touch on a few additional important things that occurred in the beginning of fiscal 2013. Update on shareholder value initiatives. Please turn to slide 10. First, it is worth reiterating that during the first quarter, we concluded several important initiatives to enhance shareholder value as part of our longstanding commitment to our shareholders. During the quarter, we completed the cash tender offer to buy back 25 million outstanding shares not adjusting for the three-to-one reverse share split at a premium of approximately 30% to the price of the shares at the time the tender offer was announced. Additionally, we completed a three-to-one reverse share split that took effect in March which will leave; we believe was in the best interest of shareholders and the company. Moreover, we have extended our ongoing $20 million share repurchase program. We began the program in August 2011 and extended the expiration deadline. It is now set to expire in August 2013. To-date, the company has repurchased approximately 12.5 million shares for a total of $15 million, out of the total authorized repurchase amount of $20 million in the share repurchase program. Comment on the private offer. I would like to address very briefly that private offer that UTStarcom received in March. We understand that shareholders may have questions about the proposed offer. Unfortunately, we are not in a position to comment on it at this time. But let me reiterate that the Board has formed a special committee to evaluate the proposal and make a decision that is in the best interest of shareholders. The committee recently engaged experienced legal counsel and financial advisors to assist them. But please note that, there can be no assurance that the transaction will be approved or consummated. We will provide updates to the market in due course and we thank you for your understanding on this point. Let’s now move to a full review of our first quarter earnings results, I will turn the call over to Robert, who will provide you with financial details. Following Robert’s presentation, I will talk about our expectations for 2013 and beyond. Robert?

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 margin. For the first quarter, gross profit was $11.7 million, compared to $15.1. million in the first quarter of 2012. Gross margin was 32%, compared to 38% for the first quarter of 2012. The year-over-year gross profit and gross margin decrease was mainly due to a decrease in average selling price and the depreciation of the Japanese Yen. We’ll continue to monitor the Japanese Yen impact on our income statement and update our investors accordingly. Please turn to slide 16 for operating expenses. For the first quarter, operating expenses were $15.4 million, compared to $16.8 million in the first quarter of 2012. In the past quarter, we divested our non-performing NGN products which resulted in a divestiture loss of $3 million. We also reduced our rental space, we further reduced our ongoing operating expenses which resulted in a write-off of leasehold improvement of $1 million. Adjusting for these one-time items, our normalized OpEx was $11.4 million in the first quarter representing a significant decrease from last year. We have not clearly started to benefit from our cost reduction efforts that we initiated in the second half of 2012. We will continue to monitor our OpEx and find ways to improve our cost structure. Please turn to slide 17 for operating income and net income. For the first quarter, operating loss was $3.7 million, but if adjusting for the one-time items mentioned before, it was close to breaking even, compared to operating loss of $1.8 million for the first quarter of 2012. For the first quarter, net loss was $5 million, including $2 million of net loss being picked up from iTV Media, our invested media operations – via the equity method of accounting as compared to a net loss of $2.1 million for the first quarter of 2012. As discussed earlier, this quarterly operating performance and as compared to the same period of last year, it’s mainly a function of slight decrease of revenue and gross profit, while at the same time reduced operating expenses. Please turn to slide 18 for cash balance. We had $136 million in cash and we have no debt. The two pie charts on this slide provides details on our cash deposits, as you can see on this page, 34% of our total cash is held within China and 31% in the US. 25% of our total cash is deposited in RMB and 55% in US dollars and 10% in Japanese Yen. Please turn to slide 19, I will walk you through our cash flow for the first quarter. Cash used from operating activities was $4.7 million. In the first quarter, cash used by investing activities was $5.8 million as we continue to invest in iTV Media. In the first quarter, cash used from financing activities was $31 million. In the quarter, we completed a $30 million cash tender offer for 25 million shares of our stock at a purchase price of $1.20 per share, return value and liquidity for our shareholders. Following this transaction, we also completed a three-to-one reverse split of our shares. As William stated earlier, we view these as very important initiatives help enhanced shareholder value and reflect our longstanding and enhanced commitment for our shareholders. This concludes my first quarter 2013 financial review session. Now, I would like to turn the call back to William to discuss our business outlook.

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 contributor for UTStarcom by 2015, as the new TV-over-IP business is expected to have gross margin exceeding 50%. Before we move on to your questions, it is worthwhile to recap very quickly the key highlights from the quarter. First, we took several steps to maintain our momentum in transitioning to a refined business and operating model. We have strengthened our relationship with a key partner iTV through which we are developing a base of subscribers and gaining access to market-leading technologies. iTV now has already garnered over 30,000 subscribers in the first commercial launch in less than a year. We also continued shedding non-strategic assets by disposing the Next Generation Network and EOC businesses. This will strengthen and help focus our overall business. Second, we made progress operationally and financially highlighting the fact that our initiatives are gaining traction. We are holding margins steady during a time of transition and made significant progress in lowering operating expenses which will strengthen our overall financial foundation. Third, we completed and extended significant value-enhancing financial transactions to reward our long-term shareholders. This transactions include, the $30 million tender offer, the three-to-one reverse share split, and the extension of our ongoing share repurchase plan. To-date, since 2011, we have returned a total of $45 million to shareholders. In conclusion, we remain very excited about the long-term opportunities before us and we are confident that our clearly defined new strategy positions us very well in the evolving media environment. We expect our actions will enable us to capture opportunities that will translate into significant overall improvement in the company’s business performance and enables us to deliver enhanced shareholder value over the long-term. This concludes our remarks and now we would like to take any questions you may have. Operator, please open the line for Q&A.

(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.