14 July 2004

Gilat Signs Agreement with leading Angolan Telecom Operator, MSTelcom

Agreement calls for a DialAw@y IP and FaraWay networks of up to 1,000 sites

Petah Tikva, Israel, July 14, 2004 – Gilat Satellite Networks Ltd. (Nasdaq: GILTF), a worldwide leader in satellite networking technology, today announced the signing of a contract with the leading Angolan ISP and a telecom operator, MSTelcom. The agreement initially calls for the deployment of up to 1,000 sites of the satellite-based DialAw@y IP and FaraWay VSAT networks. While the DialAw@y IP network will service rural telephony applications throughout the country, the FaraWay network will provide data and telephony services to MSTelcom’s ministerial and corporate clients. The installation of the hubs and the remote sites is expected to be completed by the third quarter of 2004.

MSTelcom – Mercury Servicos de Telecomunicacoes SARL, is a subsidiary of Sonangol, the Angolan state oil corporation. It is one of four companies in the country to be awarded a license to operate fixed-line telephony. Formed on March 21, 1997 with the objective of guaranteeing, maintaining and operating in an efficient manner the communications of the Sonangol Group. On August 2, 1999, the current installations of Petrangol (TCC) in Luanda, were occupied and the independent activity of the company began.

Janna Koretskaya, Gilat’s Associate Vice President, Sales, Africa, said, “This project will make a major contribution to advancing telecommunications in Angola, and rebuilding much of the country’s infrastructure destroyed during the civil war years. The network will provide Angola’s citizens with the most advanced voice, data and Internet applications. We are pleased to be working together with MSTelecom on this important national project and we look forward to enhancing our relationship as we work together in its implementation.”

DialAw@y IP is one of the only VSAT products capable of providing high-speed Internet connectivity and toll-quality telephony service at the same time. Each unit supports a PC/LAN connection and up to six telephone lines. It is a low-cost solution for the fulfillment of Universal Service/Access Obligations, Public Call Office requirements and small office/home office (SOHO) requirements for bundled telephony and Internet access. According to the 2003 Comsys Report (www.comsys.co.uk), Gilat has more than 80 percent of the global market share for rural applications, combining telephony and high-speed Internet.

Gilat’s FaraWay VSAT employs a full-mesh, DAMA network architecture that maximizes the use of available satellite and ground-based resources. It satisfies the exacting standards of PSTN and private network operators for voice transmission, data, call accounting and maintenance.

About Mercury
Mercury Servicos de Telecomunicacoes SARL, presently, beside the Sonangol Group, it provides telecommunications services for several corporate companies in the Oil & Gas industry, mobile operators, SMBs, and SOHOs. Along this last three years MSTelcom has provided and doubled the volume of services like voice, data, internet, and radio trunk, over its present network based on wireless, microwave and satellite, not only in Luanda but across the country (Cabinda, Soyo, Benguela, Lubango, etc.) as well. The aim of MSTelcom is to become one of the leaders of telecommunications services in Angola and in the region.