Satellite Broadband Across South America

Gilat and rStar agreed to a deal that will fund Gilat's SOHO broadband rollout in Latin America. A series of transactions has been approved by both boards and is pending approval by rStar shareholders.

by Roy Mark of internetnews.com [April 25, 2001]

Satellite networking technology firm Gilat Satellite Networks Ltd. (NASDAQ:GILTF) and rStar Corp. (NASDAQ:RSTR) are reporting a series of transactions which will result in the acquisition and funding of Gilat's StarBand Latin America business by rStar.

Israel-based Gilat's StarBand Latin America business currently operates satellite-based rural telephony networks in Chile, Peru, and Colombia, as well as high-speed consumer Internet access pilot networks in Brazil and Argentina. StarBand Latin America expects to work on a wholesale basis with Latin American ISPs and other service providers to offer high- speed Internet access via satellite.

Its targeted customer is the small office/home office and select consumer market segments in Latin America, a $2.5 billion market projected by analysts to grow at a five-year compounded growth rate of 41 percent.

The transaction is expected by Gilat management to fund the initial business plan for the StarBand Latin America business, which intends to commence commercial operation of its Internet offering in the coming months. The proposed transactions, which have been approved unanimously by Gilat's board and the board of rStar, will be presented to rStar shareholders for approval.

Gilat Satellite Networks, with its global subsidiaries Spacenet Inc., Gilat Europe and Gilat Latin America, is a provider of telecommunications solutions based on VSAT satellite network technology. Gilat provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and markets interactive broadband data services.

The company is a joint venture partner, with Microsoft Corp., EchoStar Communications Corp. and ING Furman Selz Investments, in StarBand Communications Inc., America's first consumer, always-on, nationwide, two-way, high-speed satellite Internet service provider.

rStar, through its rStar Broadband Networks, Inc. subsidiary, develops, provides and manages satellite-based networks for large-scale deployment across corporate enterprises, educational systems, and user communities of interest. The company's core products include remote high-speed Internet access, data delivery, high-quality video and networking services distributed though its satellite broadband Internet gateway and bi-directional solutions.

—End