Thank you for standing by for UTStarcom’s Fourth Quarter and Full Year 2011 Earnings Conference Call. (Operator Instructions) A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. 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 Fourth Quarter and Full Year 2011 Earnings Conference Call. We distributed our earnings press release earlier today and you can find a copy via Newswire Services and on our website at www.utstar.com. In addition, we have posted a slide presentation on our website, which you can download and use to follow along with today’s call. On today’s call we have Mr. Jack Lu, our President and CEO; and Ms. Jin Jiang, our CFO. Before we get started, I will read the company’s advisory on forward-looking statements. This call will include forward-looking statements on topics that include, but may not be limited to the company’s restructuring initiatives, IPTV revenues, profit margins and projected business model. Forward-looking statements are generally indicated by such words as will, expects, estimate, goals, plans or similar words. These statements are forward-looking in nature and subject to risk and uncertainties that may cause actual result to differ materially. This include risk and uncertainties regarding the ability of the company to realize anticipated result of operational improvements, the company’s ability to successfully launch its Internet TV platform, continue to integrate recent acquisition, successfully operate its new Service business, execute on its business plan and manage regulatory matters, as well as risk factors identified in its latest Annual Report on Form 10-K, Form 10K/A, quarterly reports on Form 10-Q and current reports on Form 8-K and Form 6-K as filed with the Security and Exchange Commission. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to our President and CEO, Mr. Jack Lu.

Thank you, Jing, and hello to everybody on the call. 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 this call are in U.S. dollars. Let’s start with slide four and talk briefly about our fourth-quarter highlights. Net income attributable to UTStarcom’s shareholder was $4.1 million, or basic and the diluted earnings per share of $0.03 in the fourth quarter 2011. Total revenues increased 9.6% year-over-year to $83.5 million in the fourth quarter 2011 from $76.1 million for the same period in year 2010. Gross margin was 34.2% in the fourth quarter 2011 compared to 10.6% in the fourth quarter 2010. Operating income was $8.5 million in the fourth quarter 2011 compared to an operating loss of $26.6 million in the fourth quarter 2010. Cash, cash equivalents and short-term investments were $304 million as of December 31, 2011. On slide five, we highlight our 2011 financial achievements. Most notably, we exceeded our revenue targets range of $300 million to $320 million by achieving $320.6 million in total revenue for the full year 2011. Total operating expenses in 2011 were $93.1 million, 6.9% lower than our annual target of $100 million. And lastly, we achieved a healthy full year gross margin of 35.7% and met our annual breakeven target established at the beginning of the year, recording net income of $13.4 million. Turning to slide six and take a look at year-over-year comparisons of the past three years. 2011 was our first profitable year after six years of consecutive losses. Our operating expenses have experienced a downward trend since 2009 while our operating income and the net income have steadily increased since 2009 and turned positive in 2011. Now let’s take a look…

Thank you, Jack, and hello, everyone. Please turn to slide 13 and I will discuss our fourth quarter and full year 2011 financial results in more detail. In the fourth quarter, we recorded $83.5 million in revenue. This was a 9.6%, or $7.3 million, increase compared to $76.1 million in the fourth quarter of 2010. This increase was primarily the result of increased sales of PTN in Japan and MSTP and RollingStream infrastructure product sales in Taiwan. For full year 2011, revenue was $320.6 million, an increase of 10%, or $29 million, compared to $291.5 million for full year 2010. This exceeded our full year revenue target range of $300 million to $320 million. Let me remind everyone that included in the full year revenue is approximately $95.3 million of accelerated amortization of PAS deferred revenue with a 35% growth margin that is not expected to recur in 2012. Our book-to-bill ratio in the fourth quarter was 0.7 without the PAS deferred revenue. On slide 14, you can see that gross profit margin was 34.2% for the fourth quarter 2011 compared to 10.6% in the fourth quarter 2010. Gross profit margin for the full year 2011 was 35.7%, an improvement from 24.1% for the 12 months ended 2010. As we mentioned earlier, the improvement in gross profit margin continues to be driven by increased sales of higher gross margin PTN products in the fourth quarter 2011. Gross margin for Equipment Sales in China also improved in the fourth quarter 2011 compared to the corresponding period of 2010. Moving on to slide 15, from the chart, you can see continued progress in our restructuring and cost cutting. Q4 OpEx was $20 million, a decrease of 42.2% year-over-year from $34.7 million in the corresponding period in 2010. OpEx as a percentage of…

Thank you. Ladies and gentlemen, we will be conducting a question-and-answer session. (Operator Instructions) And our first question will come from Lily Wu of TGRA Capital. Please go ahead. Lily Wu – TGRA Capital: Yes, hi. Thank you. I want to understand a bit more about the IPTV trial wins in, for example, in Chongqing or Zhejiang, Fujian. For any of these contracts, what is a typical contract size? And also how would the booking look like? Is it a one-time sale of equipment systems to implement the IPTV system in the cities? Or is it a multi-year contract? And how large are they typically for something like a Chongqing contract?

Thank you for the question. This is Jack. Actually as we introduced it before, along with the three network convergence, the Chinese Chongqing government mandates that all the IPTV system must be implemented by the Integrated Broadcasting and the Controlling Platform that is handled by central and the local TV stations. So there is one central level IPTV broadcasting control platform by CCTV and each of the province or cities will have their local platform as well. The one that we recently win in Chongqing city is one of the local platform in the newly issued 42 trial cities in the second phase. Each of the – the size of the contracts varies from the capacity design from different locations, and normally, this is a one-time contract but followed with expansion in one or two years. That is the typical case. The deal size, it also varies as well, and due to competitive consideration, we are not in the position to disclose the size of – exact deal size of the winnings. Sorry for that. Lily Wu – TGRA Capital: Okay. Thanks for that. And I’m sorry if I missed it on the call, but did you provide fiscal 2012 guidance? Or any type of indication of what type of growth or revenue we might be looking at, especially considering that the legacy PAS, the $23 million per quarter, will be going away in 2012?

Yes. Hi, Lily. This is Jin. No, you did not miss it in our script. I think because our business in 2012 will be in a transition year where we will be focusing and developing our new business model, we are right now not in a position to issue financial guidance for 2012. We would like investors to focus more on our growth business, especially on the Service side, so that’s why we have not provided 2012 guidance. Lily Wu – TGRA Capital: Okay. But are we looking at being able to offset fully the loss of legacy revenue in the coming year? Or what are your thoughts on that?

Looking at our Equipment – traditional Equipment business, we are anticipating reasonable growth and healthy growth in that area. It is driven mainly by a steady pipeline, which we can see right now, and also the opportunity in our domestic cable markets. Lily Wu – TGRA Capital: Okay. Great. And the Operation and Services is also expected to grow?

Yes, that will be our key initiative and focus in year 2012. Lily Wu – TGRA Capital: Okay. All right. Great. Thanks for that.

Thank you, Lily.

(Operator Instructions) And our next question will come from Himanshu Shah of Shah Capital. Please go ahead. Himanshu Shah – Shah Capital: Hi. Can you talk about the Youku and Tudou merger announcement from yesterday and its impact on your business as a supplier, as well as your iTV.cn would be a competitor to their business model? Can you talk more about that please?

Okay, thank you. First, we also heard the breaking news of the merger of Tudou and Youku. There due to the local policy limitation by the government, they are limited on non-TV screen services and the typical business model is – got revenue from advertisement while they provide the free content. Our iTV.cn focus on Internet TV Services on the TV screen outside of China with Chinese content to overseas Chinese people. So the – in certain time periods, we can’t see very strong competitiveness against the other between iTV.cn and the Youku Tudou. And we are quite confident that iTV service will grow up quickly after the preliminary build-up. Secondly, we are about to announce our VSC platform. The most basic service is our VDN offerings. As long as our service quality is good and our cost is low enough in the form of competitive price, we could be attractive Service supplier for those Video Media Operators, include Youku and Tudou. Thank you. Himanshu Shah – Shah Capital: Thanks. Can you talk about why you did not buy back you stock aggressively in light of its current valuation?

Hi, Himanshu. We have been executing against our share buyback program starting from September and through to today, so we have been executing against that. And to date, we have purchased approximately $6.5 million worth of the company’s shares. And as you know, our daily purchases will be limited by SEC regulation. Himanshu Shah – Shah Capital: There is no way you can just buy in a block because you have over $300 million in cash and the market value – I mean you have a negative enterprise value of $60 million, $70 million every year, and I’m just scratching my head over here why the board is not taking this initiative over here and buy back 5 million, 10 million shares.

I think we have announced the $20 million corporate buyback plan, which is approved by our board of directors. And we have been executing against it. However, we do have to balance the proper usage of our cash, especially in light that we have new initiatives in 2012 with our new business, especially our VDN platform and other initiatives. Therefore, currently, our plan is to continue to execute the $20 million corporate share buyback program. Himanshu Shah – Shah Capital: Are you operationally, I mean, are you going to be operationally profitable in 2012?

As we have mentioned in our script, we will continue to work on our operational processes and we will drive towards operational cash flow breakeven in 2012. Himanshu Shah – Shah Capital: Thank you.

(Operator Instructions) There are no further questions at this time. I will turn the conference back to management for closing comments.

Thank you for joining us on our fourth quarter 2011 earnings conference call. We look forward to updating you on our first quarter 2012 result in a few months’ time. Feel free to get in touch with us anytime if you have further questions, concerns or comments. Thank you, everyone.

The conference has now ended. We thank you for attending today’s presentation. You may now disconnect your lines.