No. of Recommendations: 1
I agree with your implication that UTSI is the sleeper here. I have all three (with puny monthly dollar amounts invested via my Sharebuilder account); with 50% of my 'China telecom' money into UTSI; 50% split between the 'standard' cell phone services (i.e., 'standard' in the sense that those two are pretty much exactly the same type of cell service we have in 'the West' et al; unlike UTSI). My reason for favoring UTSI is simple: simplicity! China is a big market by any standards even for regular cell phone service....which, let's face it, for the 'average' Chinese (whoever that is!) is much more unaffordable than we're used to. That's the slot UTSI has slipped into, with their more limited...and much cheaper.....

UTSI's web site is UTSTAR.COM. One of the articles you can access there is from Business Week:

Two salient paragraphs from that excellent article follow, and explain what we're talking about:

"That was the first of two big decisions that have helped make Lu's UTStarcom Inc. perhaps the world's hottest telecom-gear supplier. The second was taking a chance on a technology called Personal Access System (PAS), which was developed in Japan but never caught on there. PAS uses phones that offer wireless calling. But unlike cellular systems, PAS allows users to send and receive calls only from a limited area and doesn't offer roaming. By combining UTStarcom gear with existing infrastructure, phone companies can deploy PAS for just $100 per subscriber, roughly half the price of cellular systems.

The combination of an underserved market and an inexpensive product that meets its needs has made PAS-based services -- marketed in much of China as "Little Smart" -- a runaway hit. The big Chinese phone companies, including China Telecommunications Corp., have signed contracts with UTStarcom worth more than $1 billion in the past year. As a result, Alameda (Calif.)-based UTStarcom is prospering like it's 1999. It has blown past Wall Street's expectations in each of the 12 quarters since its initial public offering in March, 2000, and it has upped guidance on revenues twice this year already. In the first quarter, sales soared 80%, to $330.5 million, and profits more than doubled, to $37.3 million. For the year, profits are expected to reach $168.7 million on sales of $1.7 billion, according to brokerage Pacific Growth Equities. "Our biggest problem is keeping up with demand," says Lu. So far this year, the stock price has risen 45%, to about $29."
((note: it's now $40.--jp))

By the way, the reason I put a little money into both CHL and CHU is that while both technically are 'China', CHL is really Hong Kong; which is a different animal, and my guess is does things differently, and emphasizes different parts of the country. UTSI is based in the Far, eastern San Francisco Bay Area, anyway.


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