UTStarcom, Inc. (NASDAQ: UTSI | Quote | Chart | News | PowerRating) reportedly is considering the possibility of acquiring Borqs Ltd.

If successful, UTStarcom, which is urgent for a turnaround, will be likely to return to the 3G arena, pointed out an industry watcher.

Set up in September 2007, Borqs is a leading mobile software developer. It developed OPhone OS operating system for China Mobile Ltd. (SEHK: 0941 and NYSE: CHL)'s TD-SCDMA mobile phones, mobile Microsoft platform Mobile Widget, cloud computing platform Big Cloud, as well as mobile Internet application services Mobee.

Months ago, the company closed a new round of fundraising, luring USD 17.4 million from a group of investors led by Northwest Venture Partners (NVP). Of its employees, more than 90% are technical professionals.

Borqs is scheduled to launch about 30 types of OPhone mobile phones compatible to the country's homebrewed TD-SCDMA network in cooperation with China Mobile and terminal manufacturers this year, a vice president for the Beijing-based company disclosed in an interview in early February 2010.

At the beginning of 2009, the MIIT asked telecom operators to pull out of PHS services before the end of 2011 to pave the way for 1880-1900MHz TD-SCDMA services. UTStarcom has been in the decline in the recent two years. Its sales slumped to USD 1.6 billion in 2008 from USD 2.5 billion in 2007. The company once cut more than 50% jobs globally and closed low-profit production lines.

Not long ago, UTStarcom announced its latest strategic plan, betting on Internet protocol TV (IPTV) and opportunities bought by China's planned network convergence among the telecom, cable as well as Internet sectors in the fooling several years.

According to the plan, UTStarcom will get USD 48.5 million from Beijing E-town International Investment and Development Co., Ltd. (BEIID), Ram Max Group Limited, and Shah Capital Management.

UTStarcom will offer 22 million shares to the three investors at a price of USD 2.2 per share. In exchange, it will obtain USD 25 million, USD 12.5 million and USD 11 million respectively from BEIID, Ram Max Group, and Shah Capital Management.

Meanwhile, UTStarcom appointed Jack Lu as its CEO and president, taking the place of Peter Blackmore, who will retire from his posts. The appointment will take effect from June 30, 2010.

Moving its headquarters from the US to Beijing, UTStarcom will become a Chinese company. Because the local government backs up the largest investor BEIID, UTStarcom will thus have governmental background.

 source:tradingmarkets