UTStarcom, Inc., a global player in the IP access networking and services industry, today announced that it has signed contracts valued at approximately $85.7 million with China Netcom Corporation (CNC) to expand and upgrade its IP-based PAS (Personal Access System) (iPAS) networks in Beijing and the Heilongjiang Province.

UTStarcom also announced that as a result of the strong demand for its PAS infrastructure and handsets, the company is guiding to slightly higher revenues, slight gross margin pressure, and reiterates GAAP EPS guidance for the first quarter of 2004.

Heilongjiang Province has a population of approximately 38 million people and a fixed-line penetration rate of only 31.5 percent. Currently, approximately 2.1 million people subscribe for PAS service in the province. UTStarcom estimates that more than 50 percent of the total population represents the target market for PAS service, as the demand for low-price telephony with citywide mobility is large in the region. In Beijing, PAS service has developed into a major revenue driver for CNC, representing approximately 60 percent of all new fixed-line subscribers. CNC estimates that more than one million people will subscribe for PAS service this year in Beijing alone.