The Company must still complete definitive agreements with the Colombian government. Compartel is the program of social telecommunications, financed by the Communications Fund and National Development Fund - Fonade in Colombia.

Gilat was the sole bidder for the telecenters project and was the lowest bidder for the telephony project. However, earlier this year, Gilat's bid for the telecenters project was declared as deserted by the previous Colombian administration.

Gilat appealed this ruling. The new Colombian government reversed this ruling, awarding the telecenters project to Gilat. Together with the telephony project, awarded to Gilat in the second half of October, the total value of the contracts is approximately $65 million.

The telecenters project will be powered by Gilat's Skystar 360E broadband VSAT platform, while the telephony project will deploy the company's DialAw@y IP telephony and Internet platform.

Gilat already operates a substantial VSAT network for Compartel, consisting of 7,415 telephony sites including 670 Internet sites, serving 4 million people throughout all the municipalities of Colombia. The network, initiated in 1999, was installed by Gilat and has been in operation during the past two years.

Rolando Fernandez, President, Gilat Networks Colombia, SA E.S.P., said, "This project will benefit the rural communities in Colombia, not only in the telecommunications field, but also in health and education programs.

"With the arrival of the Compartel Telecentros Program, the digital divide will be bridged in the 500 communities, providing the population with cultural, economic and social opportunities they never had before."

Gilat Chairman and CEO Yoel Gat said, "We are very pleased with the Colombian government's decision. In the past, we have demonstrated our dedication and commitment to the Colombian market as illustrated by the first network we deployed for Compartel, one of the most successful projects of its kind in the world.

"We are pleased to expand our connection with the Colombian government and people who will be able to enrich their lives with our technology."

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