Gilat Satellite Networks Ltd. (Nasdaq: GILTF; TASE:GILTF) is expanding in China. The company announced yesterday that China Unicom Ltd. (NYSE:CHU; HKSE:762) had selected it to provide a 1,500-site, high-speed satellite communication network, using the company’s SkyEdge VSAT equipment. Capital market sources estimate the contract to be worth $2-4 million. Gilat will report this revenue over the coming quarters. Gilat has already deployed nearly 600 sites in the three months since this contract was signed.
China Telecom, one of the world’s largest telecommunications companies, has a market cap of $11 billion. The company provides wireless services to 112 million subscribers across China.
Gilat develops, manufactures, and markets very small aperture terminals (VSAT) for communications satellite. The company has a market cap of $130 million. The company’s SkyEdge system is designed as a communication solution for remote areas with harsh terrain and severe weather conditions that hinder the construction of communications infrastructures - important attributes for many remote Chinese villages.
Gilat has been restructuring in recent months, including the appointment of Amiram Levinberg as chairman and CEO in July 2005. A co-founder of the company, Levinberg returned to it after York Capital and Mivtach Shamir Holdings Ltd. (TASE:MISH) acquired most of Bank Hapoalim’s (LSE:BKHD; TASE:POLI) stake in Gilat.
Gilat will publish its financial report for the fourth quarter of 2005 and the year as a whole on February 13.
In the past two months, Gilat has announced a number of contracts for VSATs, including with Kazakh telecommunications companies, and the state lotteries of several US states. “Globes” recently reported that Gilat was participating in a $5 billion US Army tender for satellite communications systems.
Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2006