Jane Zuo – Investor Relations William Wong – Chief Executive Officer Robert Pu – Chief Financial Officer

Al Tobia – Sidus Investment

Ladies and gentlemen, thank you for standing by for UTStarcom’s Second 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. Jane Zuo, Investor Relations Senior Manager for UTStarcom. You may begin.

Hello everyone and welcome to UTStarcom’s second 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 and the performance in the second 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 include risks and uncertainties related to among other things, changes in the financial conditions and cash position of the company, changes in the composition of the company’s management and their effect on the company; the company’s ability to realize anticipated results of operational improvements and the benefit of the divestiture transactions; the ability to successfully identify and acquire appropriate technologies and business for inorganic growth and to integrate such acquisitions; the ability to internally innovate and develop new products; assumptions the company makes regarding the growth of the markets and the success of the company’s offerings in the market and the company’s ability to execute its business plans and 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 in a period of strategic transition 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 information available 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, Jane and hello to everyone. As Jane 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 U.S. dollars. Let me begin on slide five with an overarching assessment of the second quarter of 2013. This was a quarter in which we asserted the strength of our core broadband business, while continuing our transition into a provider of advanced video services, with a growing subscriber base. Also we achieved several important financial milestones. Net sales on a non-GAAP basis increased 19%. We also continued reducing operating expenses both sequentially and year-over-year and perhaps most notable we generated positive operating cash flow. All of this is indicative of the healthy and improving trends of our underlying business. We did also experience a decrease in our gross margin, which we highlighted as a possibility last quarter and Robert will go into a bit more detail on this in a few moments. As you will remember the strategy we launched last year is intended to accelerate UTStarcom's transition to higher growth, more profitable business lines, redeploy capital to support higher return opportunities and establish a base of subscribers to value-added services that will generate more predictable recurring revenue streams. As we’ve heard us describe in the past on slide six, our plan centers on, first establishing a TV over IP platform through internal development as well as the acquisition of newer technologies, such as those we have gained access to, through our investment in our strategic partners, iTV Media and aioTV. Second, implementing an operating structure that will recognize the potential of our business units, and foster innovation and collaboration, while maintaining disciplined control of operating costs. Please turn to slide seven. We have taken several decisive steps to put this strategy into practice over the past several quarters. We have disposed of non-core and loss making businesses. We’ve invested in strategic partnerships. We acquired advanced media services technology. And we have aggressively reduced operating expenses. We believe that taken together these initiatives will transform UTStarcom into a leading provider of media operational support services. Our efforts are already successfully repositioned the company to capitalize on its proven strengths in the development of mobile and on demand services that are fundamentally reshaping the value that our traditional cable service and broadband customers serve end user customers. Alongside these initiatives we have continued to grow our broadband business, with a focus on higher value added product and services that are targeted to a specific set of customers. As I mentioned earlier we are driving important developments on this side of the business with the launch of a series of new product innovations that deliver upon UTStarcom’s vision of simple network, simple operation. These developments along with disposal of non-core product lines are refining our broadband business into a streamlined developer of specialized products. And as the operating results show these changes are having a positive impact. Now please turn to slide eight to discuss some specific operating achievements in the second quarter that support our strategy and highlight the ongoing progress we are making in many areas. iTV Media; in the second quarter we strengthened our partnership with iTV Media in which UTStarcom already owns a significant minority stake through the purchase of a convertible bond in the company. In addition iTV Media has continued to make gains with the first commercial rollout of its flagship video services product. As we have discussed in the past iTV Media is currently engaged in a strategic partnership with Thailand’s national telecommunications and broadband service provider TOT. In the second quarter the number of subscribers of iTV Media’s offering in Thailand doubled from the first quarter to nearly 60,000. This validates the media services side of our business strategy as it demonstrates potential consumer demand for a more personalized and mobile video experience. It also underscores how we can use our principal relationship with broadband service providers like TOT to launch new services and develop a base of subscribers that will provide recurring revenue. aioTV; moving on, the advanced media and entertainment offerings offered by aioTV in which UTStarcom acquired a significant minority ownership stake last year are receiving positive feedback from cable operators, particularly in the Americas. The company announced in June that it's signed a licensing agreement with a major broadcast provider in Panama to use the aio platform to deliver a media service offering over 3 million customers. This is a very significant development as it will provide a large scale test market for technologies that we can look to deploy to other markets mainly Asia, through our existing relationships with cable and broadband service providers. Lastly on slide nine, our broadband business is generating relatively good profit margins and developing into a niche business as we round out our portfolio with initial products. To this end in August 2013 we announced a formal launch of important extensions to our market leading PTN product line to Network Management System. The NetRing TN701 which we recently announced also is a new product line that expands our broadband products to the edge of the network going forward. The innovations with size tolerance to host operating environment demonstrate a simple network, simple operations mantra that is driving product development and will help customers meet increasingly sophisticated needs. Likewise the new Network Management System Architecture we launched greatly increases the number of PTN nodes that can be managed on a single network, including capacity distribution and lowering operating costs. Both are already in commercial deployment with some of our largest and longest standing customers in the critical markets of Asia. These further refine our product offerings, following disposal of non-core businesses earlier in the year and positions us a strategic partner to some of the largest broadband and mobile service providers. Besides these two announced product we have also passed critical development milestones in several other new broadband products that we’ll be launching throughout the rest of 2013. Leveraging on our network management system expertise we have embarked on our carrier SDN program that will expand our PTN product series into software defined PTN. What we have seen in the second quarter of 2015 is very encouraging, both in terms of our own performance as well as the general direction of the market. Our conversations for cable and broadband service providers validates steps that we are taking to develop PTN variety technologies and services that they can integrate into their system to deploy niche content on demand to a variety of devices. Now please turn to slide 11, and let me switch gears to discuss the important initiatives that we have had in place to further enhance shareholder value. As you all are aware UTStarcom had an aggressive share repurchase program in place extending back to 2011. That program which we extended twice expires this month. In total the company repurchased $15 million out of the total authorized repurchase amount of $20 million. This program shows our commitment to balance prudent and effective cash management with our abiding policy to reward long term shareholders. Before I turn the call over to Robert to go over the financial details of the second quarter I would like to address really briefly the take-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. The Board Special Committee is working closely with its legal and financial advisors to evaluate the proposal and make a decision that is an advantage for shareholders. We should note however that there can be no assurance that a transaction will be approved or consummated. As we have said in the past we will provide updates to the market in due course. We thank you for your understanding on this point. Let’s now move to a full review of our second quarter earnings results. I’ll turn the call over to Robert who will provide you with the 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 second quarter and first half 2013 financial results in more detail. Before I begin let me remind everyone that in the third quarter of 2012 we divested our IPTV business. So for better comparison of financial performance on a year-over-year base we have prepared non-GAAP financial results which focus on our remaining broadband business. So for today’s purposes I will focus on our broadband business and exclude the already divested businesses from our discussion. Please turn to slide number 13. Before I walk through the specific numbers let me highlight a few key themes of the second quarter and first half of 2013. Starting with the positives, and as William highlighted in his remarks we’re very proud of several key things. First, revenue for both the second quarter and the first half increased on a year-over-year basis as we continue to experience strong demand for our equipment products from our customers. Second, we continue to benefit from aggressive and focused cost reduction efforts as demonstrated by the significant decrease in operating expenses in the first half. Moving forward, we will continue to monitor our OpEx and find ways to further improve our cost structure. Third, we generated positive operating cash flow in the second quarter reflecting the positive performance on top line and coupled with lower costs. And lastly, we ended the quarter in a strong financial position with no debt and about $124.7 million in cash on the balance sheet. As we have said before we will continue to invest in our growth plans and other initiatives designed to increase shareholder value. Moving to one of the challenges we faced in the quarter, gross profit and gross margin decreased from 2012 levels which we had said as the possibility in last quarter. The decrease is largely due to the Japanese Yen depreciation, along with an additional loss provision in our India business P&L. We have taken certain measures to mitigate the impact. For example, converting our Japanese Yen denominated assets to U.S. dollar denominated assets to hedge against foreign exchange risk. However by doing business in international markets we’re inherently exposed to such risks. Furthermore, Japan is perhaps our most important market commercially. So this is market we are committed to. Now let me turn to the specific results, please turn to slide number 14 for revenue. For the second quarter revenue was $47.4 million compared to $39.9 million for the second quarter of 2012. For the first half revenue was $84.1 million compared to $79.2 million for the first half of 2012. The significant revenue increase in the second quarter was mainly due to certain sales orders delayed from Q1 to Q2. Therefore the first half revenue number is a better measurement to look at. For the first half revenue increased from prior year period as we experienced stable demand for our products. Please turn to slide number 15 and 16 for gross profit and gross margin. For the second quarter gross profit was $9.6 million compared to $12.9 million for the second quarter of 2012. Gross margin was 20.1% compared to 32.3% from the second quarter of 2012. For the first half gross profit was $21.2 million compared to $28 million for the first half of 2012. Gross margin was 25.2% compared to 35.3% for the first half of 2012. Year-over-year gross profit and gross margin decrease was mainly due to the continuous depreciation of the Japanese yen. A major portion of our revenue was denominated in Japanese yen. Most of our costs are denominated in renminbi and our reporting currency is the U.S. dollars. Depreciation of the Japanese yen and the relative strength of the renminbi throughout the first half of 2013 resulted in the gross profit and the gross margin decrease. Another factor of this increase is that we booked an additional loss provision in our India business P&L. This is due to an increase in the estimated cost to complete a project there resulting from a cost increase by our service provider in conjunction with his final contract renewal. If excluding our India business from our P&L gross margin for all other region was above 30% for both the second quarter and the first half. We will continue to monitor the Japanese yen situation and other factors impacting our income statements and update our investors accordingly in the future. Please turn to slide number 17 for operating expenses. For the second quarter operating expenses were $10.8 million, compared to $16.2 million in the second quarter of 2012. For the first half operating expenses were $26.2 million compared to $33.1 million in the first half of 2012. In the past several quarters we have worked very diligently to reduce OpEx. We’ve right-sized the business by divesting non-core product, reduced redundancies in our workforce and promoted accountability and productivity among our staff. We also reduced people related overhead expenses and out sourced services expenses. From the first quarter of this year we have clearly started to benefit from our cost reduction efforts that we initiated from the second half of 2012. By the second quarter we managed to maintain run rate OpEx within $12 million per quarter. For the first half, after adjusting items our run rate OpEx was about 30% lower compared to 2012. We will continue to monitor our OpEx and find ways to further improve our cost structure. Please turn to slide 18 and 19 for operating income and net income. For the second quarter operating loss was $1.3 million compared to operating loss of $3.3 million for the second quarter of 2012. For the first half operating loss was $5 million compared to $5.1 million for the first half of 2012. For the second quarter net loss was $2.1 million compared to net loss of $7.3 million for the second quarter of 2012. The Q2, 2013 net loss included $2.4 million of net loss being picked up from iTV Media, our invested media operation entity, via the equity method of accounting. Adjusting for this item we achieved $0.3 million in net income from our core broadband business. For the first half net loss was $7.1 million compared to net loss of $9.4 million for the first half of 2012. The first half 2013 net loss included $4.4 million of net loss being picked up from iTV Media via the equity method of accounting. Again adjusting for this item net loss from our core operations was $2.7 million for the first half of 2013. As discussed earlier both the second quarter and first half operating performance has improved on a year-over-year basis. This is mainly a function of the slight increase in revenue and significantly reduced operating expenses. Very importantly we achieved the improvement while facing pressure on the gross profit and gross margin. Please turn to slide number 20 for cash balance and cash flow. We have about $124.7 million in cash and we had no debt at the end of Q2. For second quarter we generated positive operating cash flow of $2.9 million. Cash used by investing activities was $14.8 million as we continue to invest in iTV Media. Cash generated from financing activities was $2.7 million, which is mainly due to AR factoring. We are happy to report positive operating cash flow, as we understand the great value for shareholders and need to generate cash from operations which we did in Q2. We will continue to manage our P&L and cash flow in future quarters with the aim to increase shareholder value. However we are in the early days of our turnaround plan. We’ll continue to monitor our progress and update investors in the future. This concludes my second quarter 2013 financial review section. Now I will turn the call back to William to discuss our business outlook. William.

Thank you, Robert. If you would please turn to slide 22; as we are half way through 2013 we can see that in many ways it is shaping up to be as momentous as last year. We continue to make progress on several fronts to replace the unprofitable revenue from the IPTV divestiture and align our business with long term shifts in the market. We have achieved several operational and financial milestones and are developing our subscriber base. But the changes we are making will take time to complete and bear fruit. As we have said we expect 2013 to be a year of ongoing transition and investment and we continue to see it as such. Additionally our gross margin may continue to experience some headwinds from the depreciation of Japanese yen against the U.S. dollar. Our sales in Japan accounts for a large portion of the company's total revenues. But if Japanese yen exchange rates remain the same as they are now and we maintain our focus on generating efficiency from operations we foresee incremental improvement in overall financial performance over 2012 as we said at the end of the first quarter. What's more we expect to build on those gains and to see higher rates at both second half and beginning in 2014. Over the long term we expect that our balanced focus on strategic initiatives and continuing investment in our value-added broadband business will result in a more profitable and competitive business model for the benefit of employees and customers and allow us to little greater values to shareholders. We continue to expect profits from the new TV over IP services to become the majority contributor for UTStarcom by 2015, with gross margin in that part of the business exceeding 50%. Before moving on to your questions I would like to recap some of the highlights of the quarter on slide 24. First we achieved significant improvements in several key financial metrics. Net sales on a non-GAAP basis grew robustly. We improved overall efficiency, cutting operating expenses by an additional third on top of cuts from recent quarters. And we generated positive operating cash flow. Second, we strengthened the overall business foremost with new product launches in our core broadband business. We also increased our investment in a key partner iTV Media. As we saw greater market adoption of products from iTV Media and AioTV that will support our new services oriented strategy. And finally we completed a multi-year share repurchase program that returned a total of $15 million to shareholders. We believe that the direction in which we are taking the company will position UTStarcom to participate from a position of strength, in the next wave of media and entertainment trends that are fundamentally changing the way that media and entertainment are consumed and delivered. As we have said in the past everything we see and hear in the market today reassures us that these goals are indeed attainable with the business model we are pursuing. This concludes our remarks and now we would like to take any questions you may have. Operator, please open the line for Q&A.

Thank you. We will now begin the question-and-answer session. (Operator Instruction). And our first question comes from Al Tobia of Sidus Please go ahead. Al Tobia – Sidus Investment: Regarding the buyback since its completed and you’re not announcing a new buyback I assume that this is the end of the buyback for the short term?

Yes, this is -- as you said this is the end of our buyback program. Al Tobia – Sidus Investment: Okay. And when do you expect to be sustainably cash flow positive?

In the second quarter we generated positive operating cash flow and it is our near term plan to manage our P&L and our cash flow in the future quarters to create shareholder value. Al Tobia – Sidus Investment: Yeah, as you would do that, you always would I would assume you always manage your P&L to create shareholder value. My question is when do you anticipate sustainable cash flow generation, not losses, not shifting below in to the red, when you expect the sustainably cash flow positive?

Well, we have already achieved a positive operating cash flow in Q2. Like I said earlier we do not have visibility of Q3 and Q4 at this point, but it is our intention and our plan to continue to achieve what we have done in Q2. Al Tobia – Sidus Investment: Okay. Maybe I'll put it a different way, do you expect that $124 million in cash that you have on the balance sheet now to be roughly the low point in cash or do you expect that cash to decline below that level in the future?

Well, from the operational cash flow point of view we will, we plan to manage our P&L and cash flow to generate positive cash flow in the future and but also at the same time for investing activities, we’ll continue to invest in our growth plans such as iTV Media in future as we see it. Al Tobia – Sidus Investment: Okay. So last small one, what do you -- can you achieve the plan you’re talking about without making acquisitions? You have made enough acquisitions; you have enough within the company now in order to achieve your targets.

We have complete line of the new media technology to start and continue on with our current efforts. We will continue to explore other new investment opportunities and deploying those technologies and platform into countries beyond Thailand and so forth. So we constantly would look these products as we move forward to determine whether it would make any sense to do any additional investments and acquisitions. Al Tobia – Sidus Investment: Okay. And just regarding the yen policy I assume that there is -- you can just do a little more hedging process on this, right? You don’t have to change over to convert the business to a dollar-based business. Is there future hedging policy you can do to offset movement in the currency?

Well, we have taken certain measures to hedge again the Japanese yen and depreciation in recent quarters and for example again we convert cash balance denominated in Japanese yen into U.S. dollars because our reporting currency is the U.S. dollar and we’ll continue to do that in the future as we see fit hedge against the foreign exchange risk. But however at the same time I’d like to say that again Japan is major, very significant and important revenue and profit source for us, is a very important market commercially for us and we’re committed to Japan and by doing business in Japan and given our reporting currency is the U.S. dollar we are -- we will continue to be inherently subject to these foreign exchange risks involving the dollar and yen. Al Tobia – Sidus Investment: Okay. And I don't want to monopolize the call, one last question. When do you expect an answer from the special committee?

Well, the special committee has been set-up and its legal and financial advisors has been engaged. The Special Committee and its advisors are evaluating the portfolio. We will update our investors and disclose such information once the special committee makes a decision. And unfortunately today we’re not in a position to speculate on that. Al Tobia – Sidus Investment: You should have a timeframe, right, it should occur within a reasonable amount of time, should it occur within Q3, by end of the year? I mean it can't go on forever right, has to have some kind of a timeframe.

Right, well the special committee, again the special committee is evaluating the proposal and the special committee will act in the best interest of the company and its shareholders. I am not in a position to speculate any specific schedule for this. Al Tobia – Sidus Investment: Okay. I don’t have any more questions.

Our next question comes from Jim Bertolini, a private investor. Please go ahead.

Yeah, so I’m not happy at all with the performance of the company. The performance of the company is questionable. Management has stated that shareholder value is important but this has only been talk. There has been a lot of talk but no results. If the company is truly going forward as stated a number of times, the company should obviously not be sold. I question management’s capability and model's and don’t know if management’s models are accurate and honorable. I am waiting for an answer.

As managers of the company we always act in the best interest of the company and also of the shareholders. And also I’d like to take this opportunity to deliberately reiterate our Q2 performance. So if you look at for the entire P&L line, from revenue, interest on a year-over-year basis for the Q2 and also for year to-date, as the gross profit and gross margin line unfortunately we need to update our investors that we are subject and we have been impacted by the Japanese yen depreciation situation and an additional provision for loss, for contract loss in our business in India. At the same time I’d like to reiterate that we have reduced our operating expenses compared to our 2012 levels. As a result if you look at our operating income, net income and loss we have improved incrementally throughout the first half of 2015 compared to the prior year period. So we are working to turnaround this company and to create shareholder value.

I should also add that during the first half of this year we have conducted a $30 million tender offer. We’ve continued on the stock purchase plan and we also done the three for one reverse split. All of those are for the benefit of our shareholders.

Well, as a shareholder I invested in the company over the years and there have been no results at all for me and many other shareholders I assume. And logic would say that the company has -- you presented that is going to be profitable and the markets expand, logic would say that the company should not be sold and shareholders somewhere down the down will benefit. And I am finished.

Okay, thank you.

And this concludes our question-and-answer session. So I'd like to turn the conference back to management for any closing comments.

Thank you for joining us on second quarter earnings conference call. We look forward to updating you on our third quarter 2013 conference call 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.