RealTime IT News

EchoStar Takes Stake in Gilat Satellite Internet Access

EchoStar Communications Corp. Monday invested $50 million in Gilat-To-Home Inc. to provide two-way satellite broadband Internet services.

As a result of the investment EchoStar (DISH) will hold approximately a 17.6 percent stake in Gilat-To-Home. Microsoft Corp. took a 26 percent stake in the new company in February.

Gilat-To-Home is a joint broadband venture whose partners include EchoStar, Gilat Satellite Networks Ltd. (GILTF) and Microsoft (MSFT).

The companies have teamed up to offer consumers MSN high-speed Internet access via two-way satellite. The deal takes aim at providing high-speed Internet access to areas where landlines fail to deliver.

Under the terms of the agreement, EchoStar will distribute and install the Gilat-To-Home broadband satellite Internet service powered by MSN along with DISH Network satellite TV service through its 23,000 nationwide retail outlets.

Charlie Ergen, EchoStar chairman and chief executive officer, said it made sense to formalize the relationship with Gilat-To-Home and have a solid working foundation for a long-term relationship.

"We hope that EchoStar's agreement and investment with Gilat-To-Home will bring high-speed Internet access and hundreds of television channels into rural communities and other areas which may not be served by terrestrial broadband technology for years to come," Ergen said.

Yusuf Mehdi, Microsoft vice president of consumer group marketing, said the EchoStar investment would facilitate bringing the first two-way satellite broadband Internet access offering to market later this year.

"We have received very positive feedback in early trials of the MSN Gilat-To-Home service," Mehdi said. "This solution makes it possible for more consumers to get high speed access to MSN's Everyday Web services and we look forward to making it broadly available later this year."

The Gilat-To-Home services will be available in a variety of monthly service packages and to be introduced to the consumer marketplace late this year. The firm reports that its two-way satellite service could provide Internet access at speeds up to 10 times faster than normal modem speeds, with burst rates considerably higher.

Two-way service is designed to deliver high-speed Internet connections to personal computers via a single small satellite dish. The same dish will be capable of receiving up to 500 channels of DISH Network satellite TV programming, delivering a bundled service opportunity previously unavailable in the consumer market.