Telecoms equipment vendor UTStarcom has confirmed that it plans to divest its IPTV equipment business, as part of a wider revision of its strategic direction.
The IPTV unit will become a privately-held standalone company led by current CEO Jack Lu, and UTStarcom plans to use the funds generated by the divestiture to support higher return opportunities, particularly in the value-added services area.
The IPTV business currently generates around a third of overall revenues, and is expected to weigh down the overall company results with a loss. The move is expected to reduce UTStarcom’s expenses by US$ 17mn per year.
Meanwhile, former board member William Wong is being appointed as chief operating officer of UTStarcom, effective immediately, and will transition into the CEO slot once the divestiture is complete.