UTStarcom to Acquire Telos

Bids to pick up the maker of all-IP CDMA softswitches for up to $48M cash

April 22, 2004

2 Min Read

ALAMEDA, Calif. -- UTStarcom, Inc. (NASDAQ:UTSI) , a global leader in IP access networking and services, today announced an agreement to acquire substantially all of the assets of Vancouver-based TELOS Technology, Inc., a leading provider of distributed mobile switching solutions for voice and data communication networks to the fast-growing rural, enterprise, and emerging wireless markets. The assets acquired will include TELOS' complete product family, including the Sonata SE Softswitch, Sonata FS Feature Server, and Sonata OMC Operations Maintenance Center. "Acquiring TELOS accelerates and expands our global CDMA strategy, complements our existing IP-based wireless product portfolio, and provides UTStarcom with access to new market segments-such as enterprise and rural- beyond our extremely successful PAS business," said Hong Lu, president and chief executive officer of UTStarcom. "Additionally, TELOS builds upon our relationships with the top worldwide service providers and provides a team of experts who can focus exclusively on CDMA softswitch technology while our China team centers its efforts on UTStarcom's Wideband CDMA (WCDMA) mSwitch(TM) softswitch solution." A PowerPoint presentation with additional details on the acquisition can be viewed on UTStarcom's Web site at: http://www.utstar.com/ "TELOS is excited to be a part of the UTStarcom team," said Jack Mar, founder, chief executive officer and president of TELOS. "This transaction represents an excellent opportunity to blend our IP-based CDMA network solution and accelerate UTStarcom's Global Wireless Strategy." TELOS' all-IP Code Division Multiple Access (CDMA) softswitch solutions extend UTStarcom's Global Wireless Strategy, announced last month, with market-proven products that complement UTStarcom's existing CDMA radio access network (RAN), CDMA Packet Data Serving Node (PDSN), IP-based Personal Access Systems (iPAS(TM)), and third-generation (3G) portfolio. With the TELOS acquisition, UTStarcom can now offer tier-one global operators a full range of feature-rich, cost-competitive CDMA solutions. The deal also provides UTStarcom with a talented CDMA development team that has the specific expertise to manage UTStarcom's new CDMA business division. The transaction includes an initial cash consideration of $29 million, and is subject to an additional payment of up to $19 million based upon the achievement of certain revenue milestones. This transaction is subject to satisfaction of certain customary conditions and is anticipated to close in the second quarter 2004. TELOS CEO Jack Mar will serve as president of UTStarcom's CDMA Division and corporate vice president. The UTStarcom CDMA business division will be headquartered at TELOS' existing facility in Richmond, British Columbia. UTStarcom Inc.

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