UTStarcom Wins Multi-Million Dollar China Telecom Research Institute RFP for Manufacturing 5G Transport Network Routers

Rhea-AI Summary

UTStarcom (NASDAQ:UTSI) has won a major RFP from China Telecom Research Institute for manufacturing disaggregated router hardware platforms. The contract involves two packages for China Telecom's STN network, which supports 5G mobile network services, enterprise, broadband, and cloud services.

In Package 1, UTStarcom secured 70% of the manufacturing contract for STN-A1 routers (1RU pizza-box, 300Gbps switching capacity). For Package 2, the company was awarded 100% of the manufacturing for STN-A3 routers (4RU modular chassis, 800Gbps switching capacity). The exact quantities will be determined in subsequent purchase orders.

This contract extends UTStarcom's collaboration with China Telecom Research Institute in developing 'white-box' disaggregated router platforms for 5G transport networks, marking the company's progression from product design services to volume manufacturing.

Positive

• Won major manufacturing contract with China Telecom Research Institute
• Secured 70% share of STN-A1 routers package
• Awarded 100% of STN-A3 routers package
• Expansion from design services to volume manufacturing

Negative

• None.

Insights

Telecommunications Infrastructure Analyst

This contract win represents a major strategic breakthrough for UTStarcom in China's telecommunications infrastructure market. The company has secured predominant manufacturing rights for two critical router types: 70% share for STN-A1 routers (300Gbps) and 100% share for the higher-capacity STN-A3 routers (800Gbps).

The deal's significance extends beyond immediate revenue potential. By transitioning from design services to volume manufacturing, UTStarcom is positioning itself as an integral part of China Telecom's 5G infrastructure supply chain. The STN network serves as the backbone for China Telecom's metropolitan area network, supporting not just 5G services but also enterprise, broadband and cloud operations.

The focus on disaggregated router platforms is particularly strategic. This 'white-box' approach allows network operators to break free from vendor lock-in, potentially reducing costs by 30-40% compared to traditional integrated solutions. For UTStarcom, this positions them at the forefront of a growing industry trend toward open, customizable network architectures.

For investors, three key aspects deserve attention: 1) The multi-million dollar contract provides a new, potentially significant revenue stream 2) The high percentage allocation of manufacturing rights indicates strong confidence in UTStarcom's capabilities 3) The strategic positioning in disaggregation technology opens doors for similar contracts with other operators seeking cost-effective, flexible network solutions.

HANGZHOU, China, Jan. 22, 2025 (GLOBE NEWSWIRE) -- UTStarcom (“UTStarcom” or the “Company”) (NASDAQ:UTSI), a global telecommunications infrastructure provider, today announced that it has been selected as a major winner of the RFP "Self-developed STN-A Equipment Hardware Production and OEM Procurement Project" from Guangdong Research Institute of China Telecom Co., Ltd (“China Telecom Research Institute”) for manufacturing of disaggregated router hardware platforms intended for use on China Telecom’s STN network – China Telecom’s metropolitan area network, which is crucial for supporting its 5G mobile network services, as well as enterprise, broadband, cloud and other services. China Telecom Research Institute is an innovative professional technology research institution of China Telecom, one of the major telecom network operators in China.

The RFP covers the manufacturing of a large number of STN-A1 and STN-A3 carrier-grade disaggregated routers hardware. The project is divided into two packages, with UTStarcom awarded a separate frame contract for each package with specific router quantities to be determined in purchase orders that will follow:

• Package 1: Manufacturing of STN-A1 routers (1RU pizza-box, 300Gbps switching capacity). UTStarcom was awarded 70% of this package.
• Package 2: Manufacturing of STN-A3 routers (4RU modular chassis, 800Gbps switching capacity). UTStarcom was awarded 100% of this package.

This new contract builds upon UTStarcom’s ongoing collaboration with China Telecom Research Institute, which has focused on developing a “white-box” disaggregated router platform optimized for 5G transport networks as announced before.

“This RFP win marks an important milestone in UTStarcom’s cooperation with China Telecom Research Institute and China Telecom, as we advance from product design services to volume manufacturing of STN routers for China Telecom’s 5G transport network,” said Mr. Li Hua, UTStarcom’s Chief Executive Officer. “Network disaggregation technology has been one of the key strategic focus areas for UTStarcom in recent years. It attracts telecom operators with its potential to break vendor lock-in, reduce costs, and achieve open, future-proof solutions tailored to specific operator’s needs. These new contract awards further confirm UTStarcom’s leadership in designing and manufacturing of disaggregated network products, and strengthen our position in the Chinese telecom equipment market.”

About UTStarcom Holdings Corp.

UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan, India and China. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.

About China Telecom Research Institute

Guangdong Research Institute of China Telecom Co., Ltd (“China Telecom Research Institute”) is a professional innovative technology research institution of China Telecom Group. China Telecom Research Institute mainly serves the internal needs of the company group and aims to meet the needs of China Telecom's strategic planning, core technology research, management decision-making as well as production and operation support. It is mainly engaged in studying of cutting-edge technologies and related applications, development strategy research, network technology research, market and management strategy research, and carries out research and development of external cooperation projects. The Institute has gradually developed into a comprehensive base for China Telecom’s core technology research, product development, experimental testing, as well as a training center for hi-tech talents.

For investor and media inquiries, please contact:

UTStarcom Holdings Corp.
Tel: +86 571 8192 8888
Ms. Shelley Jiang, Investor Relations
Email: utsi-ir@utstar.com / shelleyjiang@utstar.com

FAQ

What percentage of the STN-A1 router contract did UTStarcom (UTSI) win from China Telecom?

UTStarcom won 70% of Package 1 for STN-A1 router manufacturing.

What is the switching capacity of UTStarcom's STN-A3 routers for China Telecom?

The STN-A3 routers have a switching capacity of 800Gbps in a 4RU modular chassis design.

How will the China Telecom contract affect UTStarcom's (UTSI) market position?

The contract strengthens UTStarcom's position in the Chinese telecom equipment market and advances their role from product design to volume manufacturing.

What types of services will UTStarcom's routers support in China Telecom's STN network?

The routers will support 5G mobile network services, enterprise services, broadband, cloud services, and other services in China Telecom's metropolitan area network.

What is the significance of UTStarcom's disaggregation technology for telecom operators?

The disaggregation technology helps telecom operators break vendor lock-in, reduce costs, and achieve open, future-proof solutions tailored to their specific needs.