Gilat Satellite Networks Ltd.'s lengthy negotiations with the Ministry of Communications in Colombia have led to signature of new agreements for the provision of services under the Compartel I, Compartel II and Telecentros projects, which were awarded to Gilat’s Colombian subsidiaries in 1999 and 2002.

The new terms to the agreements include the removal of thousands of telephony sites which are no longer needed or used by the rural population in Colombia, the upgrade of technology, primarily in existing sites, entailing additional capital expenditure by Gilat, modification of the terms of the agreements, the release of approximately $24 million from trust accounts and a release by each of the parties from all prior claims under the previous agreements. The Company expects that most of the amount in the trusts will be released during 2009, with the remaining amount to be released in 2010.