Gilat Satellite Networks has announced that lengthy negotiations with the Ministry of Communications in Colombia have led to the signature of new agreements for services under the Compartel I, Compartel II and Telecentros projects which were awarded to Gilat's Colombian subsidiaries in 1999 and 2002.
The new terms to the agreements include:
the removal of thousands of telephony sites which are no longer needed or used by the rural population in Colombia;
the upgrade of technology, primarily in existing sites, entailing additional capital expenditure by Gilat;
modification of the terms of the agreements; and
the release of approximately US$24 million from trust accounts and a release by each of the parties from all prior claims under the previous agreements. Gilat expects that most of the amount in the trusts will be released during 2009, with the remaining amount to be released in 2010.
Gilat's Chairman and CEO Amiram Levinberg said: "We have been looking forward to this contract signature for a very long time and are glad that we reached this stage. We are hopeful that these newly negotiated agreements will better meet the needs of the Colombian rural populations and will also enable Gilat to be properly paid for services provided."
* Gilat was founded in 1987 and has shipped over 750,000 Very Small Aperture Terminals (VSATs) to more than 85 countries across six continents. Gilat's HQ is located in Petah Tikva, Israel. The company has 16 sales and service offices worldwide. Gilat markets the SkyEdge and SkyEdge II product family, which includes the SkyEdge Pro, SkyEdge IP, SkyEdge Call, SkyEdge DVB-RCS and SkyEdge Gateway.