Investor Relations

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As previously announced on November 7, 2006, the review is being conducted
under the direction of the Board of Directors' Nominating and Corporate
Governance Committee (Governance Committee), comprised solely of independent
directors, with the assistance of its independent legal counsel, Latham &
Watkins LLP, and forensic accounting experts, LECG Corporation. The scope of
the Governance Committee's review encompasses stock option grants made in the
period 2000 through 2006.

Although the review is ongoing, the Governance Committee has reached a
determination that incorrect measurement dates for certain stock option grants
were used for financial accounting and disclosure purposes based on the
requirements of Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees. Following the Governance Committee's determination,
on February 1, 2007, the Audit Committee of the Board of Directors (Audit
Committee) has determined, in consultation with and upon the recommendation of
the Company's management, that the effect of using incorrect measurement dates
will result in the need to record additional stock-based compensation charges
in the previously issued financial statements, and that the amount of those
charges are expected to be material. Any such charges would have the effect of
decreasing net income or increasing net loss and increasing accumulated
deficit as reported in the Company's historical financial statements.

Accordingly, on February 1, 2007, the Company's Audit Committee after
consultation with management, determined that the Company's previously issued
financial statements for each of the three fiscal years in the period ended
December 31, 2005, which are included in the Company's Annual Report on Form
10-K/A for the year ended December 31, 2005, the financial statements for the
interim periods contained in the Quarterly Reports on Form 10-Q filed with
respect to each of these years, and the financial statements included in the
Company's Quarterly Report on Form 10-Q for the first two quarters of 2006,
should no longer be relied upon. In addition, the restatement is currently
expected to affect financial statements for fiscal years prior to fiscal 2003
and, therefore, financial statements for fiscal years prior to fiscal 2003
also should no longer be relied upon.

Because the Governance Committee's investigation is on-going, it has not
yet determined the final aggregate amount of additional stock-based
compensation charges that may need to be recorded in any specific prior
periods or in any future periods. Although the Company is not yet able to
determine with finality the amount of additional non-cash stock-based
compensation charges to be recognized, based on preliminary information the
Company expects to record additional compensation charges of approximately $50
million. The Company has not yet determined the tax consequences that may
result from these matters or whether such tax consequences will give rise to
monetary liabilities that may have to be satisfied in future periods. The
Company does not expect the restatements to impact previously reported
revenues or cash balances.

The Governance Committee has not completed its work nor reached final
conclusions and is continuing its review of the circumstances that led to
using incorrect dates in measuring compensation charges from stock option
grants. There can be no assurances that other matters will not come to the
attention of the Governance Committee during the course of its investigation
that will require additional adjustments to the Company's financial
statements.

The Company expects to use the Governance Committee's findings in
evaluating Management's Report on Internal Control Over Financial Reporting
contained in the Company's Annual Report on Form 10-K/A for the year ended
December 31, 2005 and is considering the impact of this situation on the
Company's internal control over financial reporting.

The matters discussed herein have been discussed with
PricewaterhouseCoopers LLP, the Company's independent registered public
accounting firm, but such firm has not performed review or auditing procedures
on any financial information in this release. Such financial information is
preliminary and is subject to changes that might result from completion of the
Governance Committee's investigation, management's review of the findings of
the Governance Committee, and audit by the Company's independent registered
public accounting firm, but it provides management's best estimates based on
available information.

The Governance Committee is making every effort to complete its
investigation, and the Company will make every effort to file its restated
financial statements as soon as practicable after the completion of the
review.

About UTStarcom, Inc.

UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company sells its broadband,
wireless, and handset solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables its customers
to rapidly deploy revenue-generating access services using their existing
infrastructure, while providing a migration path to cost-efficient, end-to-end
IP networks. Founded in 1991 and headquartered in Alameda, California, the
company has research and design operations in the United States, Canada,
China, Korea and India. UTStarcom is a FORTUNE 1000 company.

Forward Looking Statements

Information in this release regarding the status and determinations
resulting from the Governance Committee's independent review, the Audit
Committee's assessment of the results of that review, and Company management's
estimate of the total amount of additional non-cash stock-based compensation
charges that may be recognized, as well as other expectations and beliefs, are
forward-looking statements that involve risks and uncertainties. All
forward-looking statements included in this release are based upon information
available to the Company as of the date of this release, which may change, and
we assume no obligation to update any such forward-looking statement. These
statements are not guarantees of future performance and actual results could
differ materially from our current expectations. Factors that could cause or
contribute to such differences include the final conclusions of the Governance
Committee (and the timing of such conclusions) concerning matters relating to
stock option grants and other risks detailed from time to time in UTStarcom's
SEC reports and filings, including our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.

The independent investigation of the Governance Committee regarding timing
of past stock option grants and other potentially related issues is ongoing,
and the determinations of the Governance Committee, the Audit Committee and
the Company's management discussed in this release are preliminary. In
addition, the investigation and possible conclusions have had and may in the
future have an impact on the amount and timing of previously awarded
stock-based compensation and other additional charges to be recorded;
accounting adjustments to our financial statements for the periods in
question; our ability to file required reports with the SEC on a timely basis;
our ability to meet the requirements of the NASDAQ Global Select Market for
continued listing of our shares; potential claims and proceedings relating to
such matters, including shareholder or employee litigation and action by the
SEC and/or other governmental agencies; and negative tax or other implications
for the Company resulting from any accounting adjustments or other factors.

SOURCE UTStarcom, Inc.