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Corporate Presentation NASDAQ: UTSI March 2012

Corporate Presentation NASDAQ: UTSI March 2012. Disclosure & Forward Looking Statements.

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Corporate Presentation NASDAQ: UTSI March 2012

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  1. Corporate Presentation NASDAQ: UTSI March 2012

  2. Disclosure & Forward Looking Statements This investor presentation contains forward-looking statements, including statements regarding the Company's strategy to reduce operating expenses, ability to achieve profitability, investment in selective products and certain geographic regions, diversification of business and customer base, transition to a new business model and anticipated or assumed future financial results. Forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, the Company’s future performance and the industries in which the Company operates as well as on the Company management's assumptions and beliefs. These forward-looking statements are only predictions and are subject to risks and uncertainties related to, among other things, the ability of the Company to realize anticipated results of operational improvements, increase bookings, successfully transition to a new management team and headquarters location and execute on its business plan, as well as risk factors identified in its latest Annual Report on Form 10-K, as amended, Quarterly Reports on Form 6K and 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. Therefore, actual results could differ materially and adversely from the Company's current expectations. We undertake no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this investor presentation. The Company is in a period of significant transition and in the conduct of its business is exposed to additional risks as a result. This investor presentation also includes financial guidance and information about the Company previously disclosed during the Company's 2009, 2010 and 2011 earnings conference calls, restructuring announcements on December 18, 2008 and November 9, 2009 and other filings with the Securities and Exchange Commission. Such guidance and information reflects the Company’s information and expectations as of those dates and this presentation is not intended to confirm or update that information and expectations.

  3. 1 2 3 Agenda Corporate Overview Market Dynamics & Growth Strategy Financial Overview and Outlook

  4. CORPORATE OVERVIEW

  5. Company Introduction • A leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators • Technology and services expand and help modernize communications networks • Provide operators with increased revenue opportunities and subscribers with enhanced interactive communications experiences Share Price: $1.58 (as of March 13, 2012) Shares Outstanding: 151 million Legal Counsel: Covington & Burling LLP Auditor: PricewaterhouseCoopers

  6. Investment Highlights • Achieved profitability in 2011 • Strong existing relationships with leading telecom, cable and media players in China and across the rest of Asia • Well positioned to benefit from China’s Three Network Convergence policy and development • Diversifying business model into high-margin new service business (“Operation Support Business”) with recurring revenues • Diversifying customer base to broaden profit opportunities • Strong cash position and no debt

  7. Our Positioning and Growth Strategy A leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and Broadband to cable and telecom operators Strategy 1: Return to China Strategy 2: Telecom and Cable in Parallel Strategy 3: Equipment AND Service • Concentrate on China and Asian markets • Leverage Three Network Convergence (TNC) policy in China • Senior management closer to client decision-makers • Successfully improved internal communication & lowered costs • Core IP technology applied across different networks • Strong competitive edge and opportunity with both telecom and cable operator • Demand for interactive services creates the opportunity for equipment AND services revenue with higher margin earnings • New service business model moves UTStarcom up the value chain and closer to interactive TV operators Existing telecommunication products, RollingStream technology and sales channels serve as the foundation for UTSI’s new service business

  8. RollingStream Technology Video Storage and Streaming Servers OSS IP STB Dual-mode STB

  9. Broadband and NGN Solutions TN725 TN705 NetRing 4K NetRing2500 BBS 4000 ONU Media Gateway Call server

  10. Leading Market Position in China 10

  11. Leading Market Position in APAC Market UTStarcom Confidential

  12. Market Dynamics & Growth Strategy

  13. China’s Three Network Convergence: a growth catalyst for UTStarcom • Three Network Convergence (TNC) is the Chinese government policy dedicated to integration of telecom, broadband and cable TV networks • Three Network Convergence related market will reach RMB 688B over the next three years, including RMB 249B on equipment and network buildout and RMB 439B from interactive media user demand Pilots concluded and expansion drives ahead Focused on cable / teleco two-way entrance National Implementation Pilots Conducted Policy Launched 2013—2015 2010 2010—2012 Source: iChina Research Center, 2010.4, “Analysis of Market Size, Industry and Region for Three-Network Convergence” and policy directives issued by China’s State Council.

  14. 1 2 D UTStarcom Wins in TNC • In 2010, UTStarcom built 6 IPTV broadcast control platform projects in Sichuan, Shenzhen, Beijing, Hubei, Hunan, Shandong which were all successfully connected with the central-level platform • In 2012, UTStarcom won the first of the 42 new trial cities in China and built IPTV broadcasting control platform in the city of Chongqing Sichuan broadcast control platform CTV 重庆

  15. Strategy 2: Parallel Growth Opportunities • TNC will increase opportunities with cable and telecom operators because of infrastructure investment • Our Broadband, RollingStream video platform and mSwitch NGN solutions help meet the TNC needs of both sectors Interactive video services 4million (iDTV) 6.7million (IPTV) Broadband service <5million >100million Bi-directional network percentage <25% 100% Voice services none >1 billion TV and Digital TV service 187 million 88 million none Source: SARFT Report January 2011 and UTStarcom

  16. Corporate Strategy 3: Equipment and Services Video Service Cloud Application Products Network Infrastructure Revenue Sharing Equipment Provider Media Operational Support Service Traditional Business: Equipment Provider • Video Service Cloud (VSC) Platform enables video operators to rapidly launch IP video service and provide customers with interactive video experience

  17. Video Service Cloud Platform Video Content Exchange Cloud-Based Video Services Services include: video conferencing, online education, online office, online theater ……. Video Distribution Network Strategic partnership on broadband resource Video Communication technology Network Infrastructure technology Rollingstream technology

  18. Financial Overview and Outlook

  19. Total Revenue $83.5 million in Q4 2011, 9.6% or $7.3 million increase year over year $320.6 million in FY2011, 10.0% or $29.0 million increase year over year Without PAS deferred revenue, book-to-bill ratio for the fourthquarter was 0.70. 19

  20. Gross Margin Improvement Q4 2011 gross margin was 34.2% vs. Q4 2010 gross margin of 10.6% FY2011 gross margin was 35.7% vs. FY2010 gross margin of 24.1% US$ (mm) 20

  21. Continued Progress in Cost Cutting • Achieved target of operating expenses below $100 million in 2011 US$ (mm) Total OPEX of Q3 2011 included $4.2 million one-time net gain on divestitures 21

  22. Operating Income and Net Income • Q4 2011 operating income of $8.5 million and Q4 2011 net income of $4.1million US$ (mm) Operating Income Net Income

  23. Cash balance of $304.0 million in cash, cash equivalents, and short-term investment Zero debt Balance Sheet & Deposits 23

  24. 2012 Company Priorities • Accelerating growth of media operational support service business • Launch VSC platform and associated services in Q1 2012 • Focus on profitability improvement for equipment business • Increase enterprise value and enhance shareholder communication

  25. Investor Relations Contacts UTStarcom, Investor Relations Jing Ou-Yang T: + 8610 8520 5153 E: jouyang@utstar.com Ogilvy Financial In China: Agustin Bautista Tel: +86-10-8520-6166 Email: utsi@ogilvy.com In the U.S.: Jessica Barist Cohen Tel: +1-646-460-9989 Email: utsi@ogilvy.com 25

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