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Alameda Firm’s Global Business Plans, Lessons

By Janet Levaux
Tuesday, January 12th, 2010 at 10:13 pm in Uncategorized.

There’s a lot going on at UTStarcom, which has its global headquarters on Bay Farm Island.

The global telecommunications-technology firm has received a fair amount of of attention over the past few weeks, after agreeing to pay a fine of $3 million to the Justice Department and Securities & Exchange Commission. The fines were related to charges that — between 2002 to 2007 — the company gave trips, jobs and other favors to officials mainly in China, but also to some in Mongolia and Thailand.

Such charges have gotten other telecom firms, such as Lucent, in trouble in the past decade or so, as well.

While UTStarcom sold about $500 million in technology over the past 12 months, it is not profitable.  For instance, in the second quarter of 2009, it lost over $50 million.

It is taking steps to resolve its financial woes, though, and aims to trim its global workforce down from 4,400 to under 2,000. 

It sold some of its mobile phone operations and one of its factories in China in the past 18 months. And it’s hired new leadership; many of its top executives have held posts at well-known firms like Unisys, Hewlett-Packard and the like.  

 With no debt and plans to further cut costs, product lines and activities — as well as consolidating more functions in China — it will be interesting to see how this global player manages its relations with officials in Asia and elsewhere as it grows globally and restructures its operations in the coming months.

It appears to be at the forefront of Internet Protocol-based entertainment, for instance, and could put Alameda on the world’s multimedia map if it can turn a healthy profit and avoid future legal issues.

Stay tuned.

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