Vijay Yadav, managing director for UTStarcom in South Asia, said: "UTStarcom is looking forward to the opportunities our relationship with Sri Lanka Telecom will present in the region and we are committed to providing the operator with a competitive IPTV solution that will extend SLT's strides and solidify Sri Lanka as a major telecom hub in South Asia."

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The transaction, to be completed within two business days, has been unanimously approved by UTStarcom's board of directors and is subject to customary closing conditions including debt financing.

The company has divested several subsidiaries in a bid to focus on such IP-based products as online TV, new generation network and broadband in developing countries.

This transaction, together with the recently announced divestiture of the Mobile Solutions Business Unit, will constitute two milestones in simplifying the operations of UTStarcom.

Subsequent to the transaction, the privately held company will be called Personal Communications Devices, LLC. and the management team will stay in the new company.

The Handset business unit of UTStarcom will continue to design and provide devices to be sold in Americas through Personal Communications Devices, LLC. as part of a supply agreement. UTStarcom will also sell devices directly to carriers in other areas of the world.

In the first phase, set-top boxes will be installed in supermarkets, department stores, office buildings and in Guangxi Telecom's facilities in Nanning, Liuzhou, Guilin, Qinzhou, Guigang, Wuzhou, Beihai and Baise.

Robert Wu, CEO of UTStarcom China, was quoted by media as saying that UTStarcom boasts rich experience in successfully deploying and promoting the advanced IPTV solutions in China and the rest of the world, which was again justified by the cooperation with Guangxi Telecom.

The company vowed to continue cooperation with leading service providers to offer innovative services to their customers. UTStarcom's RollingStream end-to-end IPTV system currently accommodates more than 850,000 live IPTV subscribers globally and maintains a current total system capacity of more than 2.5 million subscribers thanks to recent successful deployments in Chinese mainland with China Netcom and China Telecom, in India with Bharti Airtel, MTNL/Aksh and United Telecoms Limited, in Sri Lanka with SLT, in Japan with Softbank, in Latin America with Brasil Telecom and in Taiwan with Markwell.

Peter Blackmore, president and chief executive at UTStarcom, said: "With the divestiture of our PCD unit, our management team and employees will focus on pursuing the growth opportunities related to our core product suite of IPTV, NGN, and broadband offerings."

Personal Communications Devices is a new company controlled by AIG Vantage Capital.

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