Company Description
We provide communications equipment for service providers that operate
wireless and wireline networks in rapidly growing communications markets. Our
integrated suite of network access systems, optical transmission products and
subscriber terminal products allows service providers to offer efficient and
scalable voice, data and Internet access services. Service providers can easily
integrate our standards-based systems into their existing networks and deploy
our systems in new broadband, Internet Protocol and wireless network rollouts.
To date, substantially all of our sales have been to service providers in China.
China has one of the fastest growing communications markets in the world.
Growth in China's communications equipment and services markets is being driven
by the government's commitment to infrastructure build-out, pent-up demand for
communications services and robust economic growth. According to 1998 statistics
from the International Telecommunication Union, China has only 7.0 phone lines
per 100 people. In comparison, the United States has approximately 66.1 phone
lines per 100 people. China's low telephone penetration rate combined with its
population of 1.2 billion presents a significant market opportunity for
providers of voice and data communications services and equipment. Furthermore,
the number of Internet subscribers within China is expected to dramatically
increase, resulting in further infrastructure buildout for data services and
increased demand for communications equipment capable of providing those
services.
Service providers in China often require network solutions with a suite of
integrated products that address all of their access needs, including wireline
and wireless, voice and data. These comprehensive product offerings enable
service providers to quickly, and with minimal incremental investment, address
the changing communications demands of their subscribers. In addition, given the
rapid growth in China's emerging communications market, network solutions must
be efficient and scalable so that the same architecture can provide an
affordable entry level solution for hundreds of subscribers yet economically
scale to hundreds of thousands of subscribers. Additionally, service providers
in China often require vendors to continually develop products to meet evolving
market needs and to have an extensive local service, support and manufacturing
presence. Our wireless and wireline access and switching systems are designed to
deliver the following key benefits to service providers:
INTEGRATED, COMPREHENSIVE PRODUCT OFFERING. By offering communications
systems that link the backbone network, access network and subscribers'
premises, we supply service providers with solutions that enable them to quickly
deploy services to subscribers. Furthermore, as subscriber needs evolve from
voice to data, we offer solutions to meet these needs.
FLEXIBILITY FOR VOICE AND DATA SERVICES. We have designed our systems to
offer a high degree of flexibility in terms of the number of subscribers and
types of traffic delivered to those subscribers. This flexibility is
particularly important in China as the communications services market is
undergoing rapid change and growth. Our access systems allow service providers
to quickly and cost-effectively implement upgrades for new services, including
high-speed data services, compared to alternative solutions which may require
the purchase of an entirely new system to provide these services.
LEADING PRICE AND PERFORMANCE SOLUTION. We have designed our systems so
that service providers in developing markets such as China can quickly deploy
multiple services from our platform in a cost-effective manner. By delivering a
modular system, we allow service providers to purchase only the functionality
and capacity needed and to purchase additional functionality and capacity over
time as
subscriber demand warrants. Furthermore, as demand for communications services
in China grows, our scalable systems will allow service providers to scale up
from a small initial subscriber base to hundreds of thousands of subscribers in
a cost-effective and efficient manner.
STANDARDS-BASED ARCHITECTURE. We have designed our systems to comply with
key international open communication standards for multi-vendor
interoperability. Our standards-based systems incorporate open interfaces that
allow service providers to connect our products to equipment from multiple
vendors and thus integrate multiple voice and data traffic types within one
system. Our compliance with open standards lowers costs by permitting service
providers to shorten evaluation times and eases integration of our products with
other systems in the service providers' networks.
LOCAL PRESENCE. We have established a strong local presence in China that
allows us to be responsive to the needs of service providers and their
subscribers. We manufacture the majority of our products at two facilities
located in the cities of Huizhou in Guangdong province and Hangzhou in Zhejiang
province that are owned by joint ventures between us and the affiliates of
corresponding provincial Posts and Telecommunications Administrations, or PTAs.
By using local facilities in China, we have helped create new jobs within the
provinces and have strengthened our relationships with the PTAs in some of
China's most modernized and rapidly growing provinces. We also maintain nine
sales and customer support sites in China that allow us to deploy a customer
support representative anywhere in China within 24 hours. Additionally, we have
developed relationships at the national, provincial and local levels which
provide us with a continuous flow of information on market changes and insight
into unique service provider needs and related opportunities.
Our objective is to be a leading provider of broadband, Internet Protocol,
or IP, and wireless network equipment to high growth communications markets. The
principal elements of our strategy are as follows:
- leverage our installed base of wireless and wireline access systems as
demand for broadband and high-speed data services grows in China;
- continue to develop products and technologies for market-driven solutions
and penetrate the emerging IP-based switching market;
- further capitalize on China's low penetration rate and increasing demand
for communications services by increasing our sales, support and
development staff and delivering new products and technologies; and
- leverage our success in China to address other high-growth markets.
Service providers have installed over 900,000 lines of our Airstar wireless
access system, which we believe is the most widely deployed wireless local
access system in China. Over 1.2 million lines of our wireline AN-2000 access
system have been deployed in China, including installations in the six largest
regional communications markets. Our OMUX product provides optical transmission
and is often bundled with our Airstar and AN-2000 systems. The OMUX is currently
installed as a stand-alone or bundled product at over 5,000 locations for over
200 communications service providers. Our newest product, WACOS, is targeted at
the emerging broadband, IP-based switching and wireless markets.
We incorporated in Delaware as Unitech Industries Inc. in 1991. In 1994, we
changed our name to Unitech Telecom, Inc. In 1995, we acquired StarCom Network
Systems, Inc. and changed our name to UTStarcom, Inc.
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