IR/インベスターリレーションズ

Company Still Needs to Complete Analysis of Accounting and Tax Impacts of Errors in Prior Stock Option Accounting

(Logo: http://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO )

As previously communicated on February 1, 2007, the Governance Committee
review found that in certain instances all actions that establish a
measurement date under the requirements of Accounting Principles Board No. 25,
Accounting for Stock Issued to Employees, had not occurred at the grant date,
which had been used as the measurement date in accounting for Company stock
option grants. A later date, when all such actions had taken place, should
have been used as the measurement date for these stock options. The Audit
Committee of the Company's Board of Directors then determined, in consultation
with and on the recommendation of the Company's management, the effect of
using incorrect measurement dates would require the Company to record material
additional stock-based compensation charges in its previously issued financial
statements. The Company therefore previously announced, based on preliminary
information, its previously issued financial statements for the years 2000
through 2006, including interim periods within these fiscal years, should no
longer be relied upon, and its estimate that the restatement may involve
additional non-cash compensation and related charges of approximately $50
million.

The Company has filed a notification of late filing (Form 12b-25) with the
Securities and Exchange Commission, which reports (i) the Company will be
unable to file its 2006 10-K by the required filing date and (ii) the Company
does not currently anticipate the 2006 10-K will be filed on or before the
fifteenth calendar day following the prescribed due date according to Rule
12b-25. The Company will file its restated financial statements as soon as
practicable, but as is customary when required filings with the SEC are not
timely made, it expects to receive a notice from Nasdaq concerning the
possible delisting of its common stock.

This 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.

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.

For more information about UTStarcom, please visit the company's Web site
at www.utstar.com.

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, Company management's
estimate of the total amount of additional non-cash stock-based compensation
charges that may be recognized, and the Company's present expectations
concerning the timing of filing the 2006 10-K with the SEC, 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, the
review of such conclusions by the Audit Committee, Company management, and the
Company's independent registered public accounting firm, and other risks
detailed from time to time in the Company'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 investigation 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 expense and
other related additional charges to be recorded for previously awarded equity
grants; 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.