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UTStarcom Provides Update on Independent Investigation of Sales Contracts in China

ALAMEDA, Calif., Sept. 17 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI) today provided an update on the independent investigation of
historical sales contracts in China. As previously announced on July 24, 2007,
the Company is conducting an independent investigation of historical sales
contracts with some of its customers in China. This investigation is being
conducted by the Audit Committee of the Company's Board of Directors with the
assistance of independent legal counsel and forensic accountants.

UTStarcom Provides Update on Independent Investigation of Sales Contracts in China
UTStarcom Provides Update on Independent Investigation of Sales Contracts in China

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The investigative phase of the audit committee's investigation has now
been completed and it has been concluded that one of the Company's five
regions in China was impacted by revenue recognition issues. Accordingly, the
Company has determined that a portion of its revenue previously recorded in
this region was recognized earlier than it should have been and that the
financial statements for the affected periods should be restated. The revenue
identified in the investigation will be deferred until such time as the
Company can demonstrate that it has met all of its obligations under the
contracts in question. The Company is reviewing the results of the completed
phase of the investigation and is analyzing the impact on revenue recognition
in the Western region of its China operations during the seven year period
ended December 31, 2006. The Company does not expect this restatement to have
any impact on its cash balances. The Company expects to complete this review
within the next few weeks.

The Company's Audit Committee, after consultation with management,
concluded today that the Company's previously issued financial statements for
each of the fiscal years ended December 31 in the period 2000 through 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
quarterly reports on Form 10-Q filed with respect to each of the two quarters
in the period ended June 30, 2006 should not be relied upon.

'Although we need to restate our financial statements, the revenue is
real; however it needs to be recognized in the applicable period,' stated
chief financial officer. 'In addition, we will continue to take the
necessary steps to further augment our internal controls in order to prevent
this problem from recurring.'

About UTStarcom, Inc.

UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. UTStarcom 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,
UTStarcom 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 UTStarcom Web site

Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995

Information in this release regarding the timing and status of, and
determinations resulting from, the Audit Committee's independent investigation
of certain historic sales contracts with some of the Company's customers in
China, the impact of the restatement on our financial and operating results
and anticipated augmentation of internal controls, 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 Audit Committee (and the timing of such
conclusions) concerning matters relating to the contracts review, the timing
and ability of the Company to take actions to augment internal controls and
other risks detailed from time to time in our 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.

SOURCE UTStarcom, Inc.