Microsoft, Gilat in Broadband Satellite Deal

LONDON (02/17/2000) - Microsoft Corp. and Gilat Satellite Networks Ltd. are co-developing two-way satellite broadband for consumer purposes, the companies announced yesterday.

Trials of the two-way satellite for high-speed Internet access are already under way, with the service expected to launch by the end of this year, Microsoft and Gilat said in a joint statement. The companies claim that the satellite service can deliver Internet connections at speeds 10 times greater than normal modems and does not require a second telephone line. Company officials were not available to give the exact speed of transmission.

Gilat has already established a new company, Gilat-To-Home, to deliver the broadband two-way satellite service and, following necessary approvals, Microsoft will take an initial 26 percent stake in the company with an investment of US$50 million, the companies said.

Gilat-To-Home will be based in McLean, Virginia, and headed by Zur Feldman, formerly the executive vice president of operations at Packard Bell Electronics Inc., the companies said.

Microsoft also has plans to buy "a significant number" of VSAT (Very Small Aperture Terminal) units from Gilat-To-Home for at least four years, Microsoft and Gilat said. The companies did not specify how many units Microsoft expects to buy or how much each unit will cost.

Microsoft will in turn use the VSAT units for its MSN Internet Access broadband satellite service, the companies said. The hardware and service will be available by the end of the year through Tandy Corp.'s RadioShack stores, Microsoft and Gilat said. Prices for the hardware and two-way satellite service were not disclosed.

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080, or at http://www.microsoft.com/. Gilat, in Petach Tikva, Israel, can be reached at +972-3-925-2000, or at http://www.gilat.com/.

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