The agreement increases Gilat's potential access to the Russian market and enhances a growing cooperation with the Russian satellite operator, RSCC. RSCC is Russia's largest satellite operator that owns most of Russia's satellites, as well as providing space segment.

According to the agreement with RSCC, Gilat would provide documentation, components and production know-how. From the governmental point of view, RSCC has a particular interest in promoting socially significant projects in remote sites such as distance education for schools in Kaliningrad and Karelia. JSC "CTS-Center" and JSC "VSAT TEL" will provide production capabilities and local infrastructure, marketing and deployment of VSAT stations.

Alexander Duka, General Manager of RSCC said, "The details of the future production program have not yet been finalized, however, we already see a great opportunity here as the Russian VSAT market is practically unlimited. With the help of this partnership, RSCC is now developing its own VSAT network based on Gilat Satellite Networks and other equipment."

Mr. V. Shubin, General Manager of JSC "CTS-Center" said, "Our holding company consists of 15 independent companies that work in various technology fields, is quite capable of establishing a large-scale VSAT production operation. VSAT TEL and VSAT-Service, two members of our holding company, already provide services for the Bank of Russia's corporate network based on VSAT stations. We look forward to expanding our VSAT manufacturing efforts through this exciting venture."

Alexander Eydus, General Manager of JSC "VSAT TEL" said, "Our company has considerable experience in deployment, supporting and marketing in Russia. Cooperation with Gilat Satellite Networks will allow the enlarging of this field of activity for the mutual profit of all parties involved."

Arie Rozichner, Gilat's Director of Sales, Russia and CIS, said, "Cooperation between Gilat Satellite Networks and Russian producers is significant for Gilat not only commercially, but also politically. It is an important cooperative effort expanding our markets in Russia in which all sides benefit."

The agreement enhances Gilat's existing relationship with RSCC. In May, Gilat announced an agreement with RSCC and the gaming company, Jackpot, to deploy a Skystar 360E hub and VSAT network with 500 remote sites throughout the Russian Federation to allow for network-wide gambling for Jackpot customers at the gaming sites on-line, as well as an independent network for data transfer within the Jackpot organization.

RSCC was established in 1967 and has the status of the national satellite operator of the Russian Federation. RSCC is the authorized body of the Ministry of Communications of Russian Federations for creation and operation of technical means of satellite communications. RSCC has the largest orbital grouping of 10 geo-stationary satellites in the C, Ku and L-bands. RSCC provides communications for federal and regional TV and radio programs, communications for the President of the Russian Federation, as well as telephony, data and other telecommunications services.

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