Gilat Satellite Networks has signed an agreement with the Mexican telecommunications company, Telecomunicaciones de Mexico, for its Telecomm Telegrafos service. The agreement calls for the deployment of a SkyStar 360E hub and up to 2,000 remote sites. In the initial phases, completed in Q4 of 2003, Gilat provided a hub and 873 VSATs to replace existing satellite-based technology. The Company anticipates providing an additional 1,130 VSATs during the course of 2004.

Telecomm Telegrafos, which is a government entity under the SCT (Secretaria de Comunicaciones y Transportes), will provide public services for such applications as national and international (Western Union) money wire transfers, telegrams, telex and fax, as well as voice traffic, email, Internet and Intranet services.

Telegrafos will also begin to offer services to other Mexican government entities and will expand their Internet services to SOHO, SME, government, and consumer markets. Telegrafos operates 2,000 offices throughout Mexican territory, of which more than half have been equipped with dedicated leased lines while the remaining sites fitted with another vendor's VSAT technology. These sites will now all be replaced with Gilat's SkyStar 360E platform.

Gilat has already deployed 3,000 satellite-based rural telephony sites for the SCT, using its DialAw@y IP VSAT platform. In addition, Gilat's large customer base in Mexico includes among others, companies such as Telmex, Elektra, GlobalSat and Comsat.

Melinda Givaudan, General Manager for Gilat Mexico, said, "Having won this bid proves again that when compared to other technologies Gilat continues to demonstrate superiority. We are pleased to continue growing our relationship with the SCT and to be providing state-of-the-art technology to meet their demands."

The Skystar 360E platform offers a flexible, two-way, satellite-based solution enabling interactive broadband IP and multicasting applications. With DVB standards and extensive IP capabilities, the Skystar 360E supports virtually any data and IP multicast application.

The Company also announced its intention to release its 2003 earnings results on February 17, 2004.