UTStarcom Remains a Hold

UTStarcom (UTSI), a provider of IP-based telecom equipments, declared 4th quarter 2008 financial results, better than our estimates. UTStarcom's transformation from a mobile handset developer to an IPbased product and services supplier has been favorably consummated.

Market demand for IPTV and optical transport solutions are likely to remain firm. The market for IPTV solutions and intelligent switching products are highly competitive and this, together with global economic weakness, may hinder efforts to improve the company's earnings power.

We do not expect UTStarcom to achieve profitability any time soon. We maintain our Hold recommendation with a reduced valuation target.

Nalak Das contributed to this report.

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