UTStarcom up on Chinese government approval

UTStarcom, Inc. (Nasdaq: UTSI) surged after it said Friday that the Ministry of Information Industry (MII)has given it approval to extend its wireless access system.

Shares rose 8 1/4 to 31 3/8, or 36 percent on the news. The stock has been falling from a high of 93 1/2 hit after its IPO in March.

MII, the governmental agency responsible for the regulation of telecommunications in the People's Republic of China, will allow the company to roll out its PAS wireless access system in China's county-level cities and countries. In large and medium-sized cities, PAS may be used on a limited basis where there is a high concentration of population, such as campuses, commercial buildings and special development zones. New city-wide PAS deployments will not be allowed in large and medium-sized cities.

UTStarcom officials have touted the fact that the company has a strong customer base in China. UTStarcom is hoping its home-field advantage will fend off competitors such as Alcatel (NYSE: ALA), Ericsson (Nasdaq: ERICY) and Lucent (NYSE: LU).

UTStarcom said it was pleased with the outcome of the review, which will give it access to about 2,000 county-level cities.

Compared to traditional cellular systems, PAS(TM) mobility functions are completely integrated into the access network architecture and thus require no central office switch modification or incremental mobile switching hardware.