Slide 1: Investor Presentation April 2014
Investor Presentation NASDAQ: UTSI April 2014
Slide 2: Disclosure & Forward Looking Statements
This investor presentation contains forward-looking statements, including statements regarding the Company's expectation regarding its strategic initiatives and business outlook. Forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, the
Slide 3: Key Investment Highlights
3 Key Investment Highlights Multiple Blue Chip Customers Proven Portfolio of Innovative Solutions that help operator to quickly launch new services while also reducing OPEX and CapEx Great Growth Potential of Wireless Broadband and Software Defined Networking (SDN) Solid Product Portfolio Strong R&D
Slide 4: Great Growth Potential of Wireless Broadband and Software Defined Networking (SDN)
Great Growth Potential of Wireless Broadband and Software Defined Networking (SDN)
Slide 5: Great Growth Potential of Wireless Internet
5 Great Growth Potential of Wireless Internet # of Global Smartphone Users and Penetration # of Downloads of Mobile Apps From All Stores (Million) (Billion) ’11-’16E CAGR: 65.5% ’11-’16E CAGR: 18.0% Source: www.eMarketer.com as of Dec. 2013 Note: individuals of any age who own at least one smartphon
Slide 6: Great Growth Potential of Broadband Market
6 Great Growth Potential of Broadband Market # of Global Broadband Subscribers Global IP Traffic (Million) (Zettabyte / Month) ’11-’16E CAGR: 29.0% ’11-’16E CAGR: 7.8% Source: Cisco VIN Global Forecast as of Dec. 2013
Slide 7: Solid Product Portfolio
Solid Product Portfolio
Slide 8: Simple Network, Simple Operation
“Simple Network, Simple Operation” 8 Simple Network Infrastructure Efficiency Provide Multiple Services on a Common Platform Simple Operation Centralized Network management SDN-ized Metro Network Integration of Services and Transport Efficiency solutions 8 Network operators can achieve reduced capit
Slide 9: UTStarcom Products Portfolio
9 UTStarcom Products Portfolio Software Defined Network (SDN) & Network Management System (NMS) Packet Optical Transport Broadband Access Professional post-sales services including installation, commissioning, maintenance and trouble shooting etc. Large volume field deployed equipments/systems/netwo
Slide 10: Software Defined Open Optical Network (SOO)
Software Defined Open Optical Network (SOO) SOO Network SDN technology revolutionizes the way that service providers operate and meet the rapidly evolving requirements of their customers. UTStarcom’s SOO (Software-defined Open Optical network) platform answers the requirements of telecom operators f
Slide 11: SOO Architecture and Applications
SOO Architecture and Applications L2/3 NW Optical Transport Central Controller Sub-Controller Wireless Access Fixed Line Access ONU OLT MSG10K TN705 OLT TN765 TN705 MSG10K TN701 TN701 TN701 AP AP Application Layer Controller Layer Infrastructure Layer API API API API API API API API API Customer Inf
Slide 12: Packet Optical Transport Products based on MPLS-TP and Carrier Ethernet
12 Packet Optical Transport Products based on MPLS-TP and Carrier Ethernet (CE) TN 725/E TN 705 TN 703E TN 703C/+ TN 735 TN 701 Access/Edge Device Edge/Aggregation Device Aggregation/Core Device TN 765 1Tb/s / 1.28Tb/s SW 100GE 10GE WDM 18U 9U 400Gb/s SW 10GE/POS FE/GE E1/STM-1 108/176Gb/s SW 2.5/10
Slide 13: Case Study: Packet Optical Transport Deployment
Internet Legacy/VPN Mobile Core Metro Aggregation IP TDM ATM/IP Access Service Broadband Fixed-line/Leased-line/VPN Mobile Case Study: Packet Optical Transport Deployment ADSL, FTTH IP MSTP ATM Integrated to an unified over 8000 nodes Packet Optical Transport Network Customer Requirements: To integr
Slide 14: Case Study: 50% - 80% OPEX Savings after Deployment
Case Study: 50% - 80% OPEX Savings after Deployment Source: Historical data of the company as of 2013 14
Slide 15: Strong R&D and In-House Manufacturing Capability
Strong R&D and In-House Manufacturing Capability
Slide 16: Advanced Facilities and Capable R&D Team
16 Advanced Facilities Strong testing lab EMC, safety regulatory, reliability Unified powerful NMS Exciting Pipelines 100GE interface at packet optical product Service provisioning automation and high efficiency by SOO SDN controller & APPS Powerful L3 VPN enabling in packet optical transfer network
Slide 17: Outstanding In-House Manufacturing Capability
Over 20 years focus on producing telecom equipments From PCB Assembly To MEC Assembly To System Integration From NPI (New Products Introduction) To MP (Mass Production) SMT, THT (PTH), MEC Assembly, Micro BGA, CSP,0201 BGA Rework and Re-Balling Best-in-class Quality Comprehensive quality control pro
Slide 18: Global Sales & Marketing Strategy
Global Sales & Marketing Strategy
Slide 19: Multinational Marketing & Sales Network
Multinational Marketing & Sales Network 19
Slide 20: Three Pronged Broadband Marketing & Sales Strategy
Three Pronged Broadband Marketing & Sales Strategy 20
Slide 21: Competitive Advantage over Peers
Competitive Advantage over Peers
Slide 22: Competitive Advantage over Peers
22 Competitive Advantage over Peers Price / Margin Advantage (Horizontal) Strong Political Risk due to National Security Concerns (Vertical) Advantages of UTStarcom A long-time international player with strong Asian presence while without national security concerns of major Chinese players Price/Mar
Slide 23: Experienced Management Team
Experienced Management Team
Slide 24: Experienced Executive Management Team
24 Experienced Executive Management Team William Wong, CEO & Director Robert Pu, CFO & Director James Lu, President Zhaochen Huang, Vice President Weigen Xu, Vice President of R&D Steven Chen, Vice President of Product & Marketing Management Over 30 years of experience in management, marketing and o
Slide 25: Valuable Strategic Investment
Valuable Strategic Investment
Slide 26: aioTV, Inc.
aioTV, Inc. AioTV enables anytime anywhere access to a broad portfolio of on-demand content Diversified Content Providers Advertising Platform Integrated with Adap.tv and its ad exchange that runs across multiple ad networks including Brightroll and Spotxchange Other ad engines can be integrated to
Slide 27: iTV Media, Inc.
27 iTV Media, Inc. Increasing Subscribers Overview Founded in 2010, iTV Media is dedicated to pioneering the transition of traditional telecom networks to advanced triple-play entertainment services providers by delivering all-digital, high definition, intelligent, and interactive television service
Slide 28: Wireless City Planning, Inc.
28 Wireless City Planning, Inc. Competitive Advantages 92% population coverage in Japan as of Dec 31, 2013 Serves 3 metropolitan areas and 9 cities in Japan Has 2,629,300 subscribers as of Dec 31, 2013 Overview Founded in June 2010, Wireless City Planning (WCP) engages in planning and provision of w
Slide 29: Improving Financial Performance
Improving Financial Performance
Slide 30: Improving Operating Cash Flow (Non-GAAP)
30 24.7% Improving Operating Cash Flow (Non-GAAP) 2013 US$ in millions
Slide 31: Financial Performance (Non-GAAP): Net Revenue, Gross Profit
Financial Performance (Non-GAAP) Net Revenue Gross Profit The 2011 revenue included a $11.3M revenue recognized from the Jersey Telecom Limited contract. The 2013 revenue was significantly impacted by the JPY depreciation. The gross profit in 2011 included a $7.3M positive impact from revenue recogn
Slide 32: Financial Performance (Non-GAAP): Operating Expenses, Net Income
Financial Performance (Non-GAAP) Reduction of Operating Expenses Net Income / (Loss)–Excluding iTV and investment impairment The 2013 expenses included a one time expense of $7.0M due to the disposal of the Company’s Next Generation Network and DOCSIS-EOC assets, the legal fee for the privatization,
Slide 33: Strong Future Growth Strategy
Strong Future Growth Strategy 33
Slide 34: Key Goals in 2014
Key Goals in 2014 Diversify Existing Customer Portfolio Continue to improve financial performance Commercialize Next Generation Packet Optical Transport Products Expand to New Markets Globally Expand SDN to Transform the Internet Architecture 34
Slide 35: Strong Future Growth Strategy
Strong Future Growth Strategy 35
Slide 36: Investor Relations Contacts
UTStarcom, Investor Relations Jane Zuo Email: jane.zuo@utstar.com FTI Consulting, Inc. May Shen (Beijing) Tel: +86-10-8591-1951 Email: May.Shen@fticonsulting.com Daniel DelRe (Hong Kong) Tel: +852-3768-4547 Email: Daniel.DelRe@fticonsulting.com Simona Kormanikova (New York) Tel: +1 212-850-5685 Emai