Here's some important news you should all read on KSA & let me tell you that this company has one heck of a GREAT FUTURE ahead.
Now, remember that the Chinese government had decided to spend millions of dollars to improve its Internet services using satellite
communication technology. This little-known, CDNX-listed company called KSAT Satellite Technology, Inc. (37% owned by GILTF) is the
business that will be manufacturing, selling and delivering GILTFs satellite communication technology. KSAT and GILTF have exclusive
rights to offer broadband Internet access via satellite in China!! China had about two million Internet users at the end of 1998.
The BDA / Strategic Group expects that over 12 million Chinese people will be on-line by the end of this year, increasing to 25+
million by the end of 2002. KSAT / GILTF's products will be the logical solution for tens (if not hundreds) of millions of people in
China who are unable to get broadband Internet service (let alone a phone line!). GILTF's technology has been the wide-area platform
of choice for major businesses throughout the world for many years. KSAT / Gilat Will Be Bringing High-Speed, Two-Way Satellite-Based
Internet Service To China At Least One Year Ahead of Its Nearest Competitor. Currently, no one but GILTF / StarBand is offering true
two-way, high-speed, satellite-based Internet access service. And don't forget that GILTF's satellites are already up and running!
How big could KSAT become? With only a limited amount of information available, we really cannot give earnings or profit projections
for the KSAT Gilat-to-Home / China venture. However, the U.S. roll-out of StarBand (basically the same product / service) does offer
some guidelines for the market KSAT is pursuing in China. Investors should also keep in mind that MSFT and DISH each invested US$50
million for approximately 19% stakes in StarBand.
KSAT Satellite Networks Inc. (CDNX: KSA) And Gilat To Home-China
Since 1994, KSAT (under the name of Xenexi Telecom prior to March 98) has developed its business of satellite communication networks
in China with Gilat Satellite Networks Ltd. (NASDAQ: giltf) as a partner. In March 1998, at the closing of a reverse-take-over, KSAT
was listed with VSE. At that time, Gilat converted its investments of 7 million USD in China joint ventures to shares in KSAT. Keppel,
a Singapore company with 17 billion USD assets, invested 15 million USD into KSAT, becoming another major shareholder (under the name
of Global Space Investments) of KSAT.
For six years, KSAT has developed a niche communications market in China with VSAT satellite technology provided by Gilat.
VSAT, or Very Small Aperture Terminal, is a communications technology that allows for the use of small fixed satellite antennas in
providing highly reliable communication between a central hub and almost any number - tens or thousands - of geographically dispersed
sites. VSATs are taking on an expanding role in a variety of interactive, on-line data, voice and multimedia applications.
KSAT has been providing, through its joint ventures and a wholly owned subsidiary, VSAT satellite communication systems and services
to private network customers in China, including national flood warning/water information acquisition network, national paging
network, etc. In 1999, KSAT achieved sales of 10 million USD in China.
Gilat has grown to a world leader in satellite communication industry. In 1999, Gilat achieved 51% of interactive VSAT market share
and 71% telephony VSAT market share in the world. In 1998, Gilat fully acquired GE Spacenet, the largest VSAT service company in US
and Europe, becoming a full scale satellite communication service provider. GE Capital got 30% Gilat shares in return, becoming the
largest shareholder of Gilat. Since its IPO in 1993, Gilat outperformed every quarterly target. In 1999, Gilat was selected as one of
20 best small companies by Forbes.
Since 1999, Gilat has developed SkyBlaster VSAT, the broadband satellite technology, to provide first two-way, always-on, high-speed
Internet access services. From the central hub to each remote satellite PC, the transmitting speed can be as high as 40 Mbps.
This year, Gilat formed Gilat To Home Inc. (now changed its name to StarBand Communications Inc.) with MicroSoft, EcoStar and ING
Furman Selz as partners. Gilat, through Spacenet, owns 45% by contributing its business plan, technology and equipment. MicroSoft
contributed $50 million and MSN services for 19%. EcoStar contributed $50 million and its established Dish Network (direct satellite
TV) of more than 4 million subscribers for 19% of the new company. Recently, Gilat To Home (StarBand) successfully launched its
services to US consumers through 7,100 RadioShack retail stores. For about $60 per month, customers will have satellite access to
several hundred TV/audio channels and two-way, always-on, high-speed (download speed up to 600K) Internet access.
Gilat To Home (StarBand) is a true revolution in satellite communication industry, expanding from traditional private data networks of
limited numbers of sites to IP based broadband Internet services of millions consumers. On October 11, soon after its successful
launching in the US, StarBand filed for NASDAQ IPO to raise 288 million USD with Merrill Lynch, CS First Boston, Salomon Smith Barney
and CIBC World Markets as underwriters.
Gilat has decided to target China and Brazil for Gilat To Home ventures after the US market. For this strategic purpose, Gilat, Keppel
and Steven Wan entered into a new shareholders agreement (a binding MOU) on September 29 with the following highlighting points:
Gilat shall establish Gilat To Home-China (GTH-China) with both Gilat and KSAT as "the two initial founding parties of the venture".
"The terms of participation of KSAT in GTH-China to be negotiated between Gilat, KSAT and Keppel." Gilat and Keppel (Global)
immediately invest 10 million USD into KSAT. Immediate upgrading of existing VSAT systems for GTH-China demonstrations is under the
way. After this round of restructuring, each of Gilat and Keppel has 37% shares in KSAT. Steven Wan has 19%. Gilat now has full
control in KSAT management, including appointing Chairman and CEO.
On October 4th, KSAT made related new release in Vancouver (see attached).
There is a great demand for high-speed Internet services in China due to existing poor terrestrial infrastructure and services,
particularly for high-end customers including multinational corporations, Taiwan / Hong Kong joint ventures, hotels and office
buildings, etc.
The value-added telecom service market in China is expected to open to foreign participation very shortly upon China's entry into WTO
at the end of this year. Internet users in China have rapidly increased to 20 million from 2 million in 1998.
The Ministry of Information Industry newly issued a first VSAT license for Internet access services to a Chinese satellite
communication company affiliated with Gilat / KSAT on September 15 this year.
With proven leading technology, strong management from Gilat, developed operating base and experience / connections in China and the
opening market of huge potential, Gilat and KSAT are committed to penetrate the high-end vertical market and consumer market for
Internet services in China at a high speed.
It is envisaged that Gilat and KSAT will follow the model of Gilat To Home-US (StarBand) in China. Gilat and KSAT, with their
technology, business plan, VSAT equipment and established China base and experience, shall have a controlling stake in GTH-China.
Other investors will bring in capital investment (at least $50 million) for a minor stake. GTH-China will then form a partnership with
a chosen telecom party in China for delivery of Internet services. GTH-China will seek for IPO after launching the broadband Internet
access services.
Gilat came to Vancouver for VSE listing in 1998 with the plan of eventual dual listing of KSAT, its China venture, on NASDAQ. Now
under the new plan, actually CDNX investors have a window of opportunity to participate in future's GTH-China, which will be valued
around $200 m upon formation and which will further go public on NASDAQ as planned. Therefore, Gilat To Home-China shall provide
significantly added values to KSAT shareholders.
This is Chris - Netxman saying May all your stocks be winners!
Chris & Marty canadiandaytraders.com |
