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UTStarcom Scores $100M Deal

UTStarcom Inc. (Nasdaq: UTSI) says it expects to book the entirety of its $100 million equipment contract with Softbank's BB Technologies Corp. subsidiary by the end of this year (see UTStarcom Scores With Yahoo!). The equipment deal, announced this week, extends an earlier deal the two companies signed in September 2001.

"We believe we'll do $100 million this year from the deal, and it could be even more than that," says Chesha Kamieniecki, UTStarcom's investor relations manager.

BB Technologies is itself an equipment vendor and, to date, it has supplied more than $130 million worth of UTStarcom IP-DSLAMs to power Yahoo Japan's Yahoo BB 12-Mbit/s ADSL service. The three companies -- UTStarcom, BB Technologies, and Yahoo Japan -- all share Softbank as a common benefactor and business partner.

Softbank owns about 20 percent of UTStarcom's shares; BB Technologies is a wholly owned subsidiary of Softbank; and Yahoo Japan, that country's leading Internet portal, is a joint venture between Softbank and Yahoo Inc. (Nasdaq: YHOO)

Incestuous as it may be, the deal guarantees a good chunk of UTStarcom's revenues for 2003, something to which few telecom equipment companies can lay claim. A large part of UTStarcom's remaining revenues in 2003 will likely come from China Telecommunications Corp. and its affiliated companies (see UTStarcom Banks on China Telecom).

UTStarcom had sales of $626 million in 2001 and says it anticipates its annual revenues to be $960 million in 2002. It also predicts it will see more than $1.2 billion in revenues during 2003.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com
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