Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT) has reached a critical milestone in Peru with approval to enter the operational phase of the three-region telecom project awarded in 2015 for an aggregate value of $285 million.
This phase enables the start of delivery of broadband internet services to more than half a million people in the three regions. Entering the operational phase will enable Gilat to unlock access to revenue of ~$12 million per annum of operations fees, for a period of ten years, as well as to start selling services over the network.
The inauguration events in were widely celebrated in the presence of Peru’s President, the Transport and Communications Ministry and the Regional Governments for start of delivery of broadband internet in support of social development, e-health and e-learning. The huge project will supply connectivity to 1,000 towns in the three regions, through the deployment of almost 5,000 km. of fiber optic and the use of Information and Communication Technologies (ICT).
The network will also provide cellular backhaul to allow mobile network operators to reach distant villages for 3G/4G broadband mobile services to satisfy the need for the same mobile connectivity services as in the urban regions. Furthermore, during the project’s operation, over 4,000 representatives of schools, health, post and police stations will receive training. See service inauguration video in Huancavelica may be viewed at https://youtu.be/A5EYjTXdC7o.
Arieh Rohrstock, GM Gilat Peru and Corporate VP, said the company is pleased to receive approval from the government of Peru to enter into the operational phase of the projects in Huancavelica, Ayacucho and Apurimac. This significant milestone marks the realization of the company's objective to turn Peru into a source of secure, multi-year, profitable revenue, both from operational fees as well as the sale of additional services over the network, as Gilat delivers on the firm's corporate values of contributing to bridging the digital divide in Peru and worldwide.
The President of Peru, Martin Vizcarra, said in the inauguration speech that the country is committed to working on the physical roads that connect cars, trucks and buses; however, the country needs to move forward in the technological race as well — it is the broadband that carries the knowledge.
In the inauguration ceremony in Apurimac, the Transport and Communications Minister, María Jara, discussed the focus on delivery of internet for the children’s health and safety and commended Gilat and stated he wish to emphasize that the collaboration of the government with Gilat that brought about this successful project — without Gilat’s commitment, work and faithful fulfillment of responsibilities, the state could not make this project happen.