Gilat Wins Its Largest VSAT Order

Gilat Satellite Networks Ltd. announced today that Pretoria-based Telkom SA Ltd. (Telkom) signed a contract for 3,000 DialAway(TM) VSATs to extend telephone services to previously underserved areas in South Africa.

The total contract is worth more than US$15 million, with Gilat
acting as prime contractor in a turnkey project. Most of the delivery
is expected during 1998.

“In 1996 the telephony market segment accounted for 3 percent of
total Company revenues. In 1997, this segment grew to 13 percent,”
remarked Gilat President and Chief Operating Officer Amiram Levinberg.
“With this latest deal, we are well on the way to realizing our goal
of 25 to 30 percent of revenues in 1998. That means that
telephony-generated revenues for this year are expected to be more
than 3 times those of last year.”

Gilat was awarded the tender from among a short list of major
global VSAT vendors. Telkom’s Request For Proposal called for the
relatively quick roll-out of one of the world’s first ‘all-outdoor’
VSAT-based telephone networks. The majority of the VSATs are expected
to be solar-powered and mounted on 5-meter poles attached to
businesses and private residences in South Africa’s northern rural
areas of Northern Province and Mpumalanga.

In an announcement dated August 20, 1998, Telkom said it intended
“to issue a new corporate bond to raise an additional R2.5 billion in
capital to assist in funding its ambitious network expansion and
modernization roll-out program. This is aimed at addressing the
leading-edge technology requirements of corporate South Africa, as
well as at taking telephony services into previously underserved
areas.”