A buddy sent this on to me.
KSA Satellite Technology, Inc. ("KSA" on CDNX)
High-speed Internet access became available to consumers in 1996 and the technology has proven to be extremely popular - at least among
those fortunate enough to live in an area where broadband service is available.
In the United States, for example, once you get outside of the major metropolitan areas, there are not many cable companies that have
upgraded their infrastructure and are offering broadband access. Similarly, when you get more than about three miles (as measured by the
length of the cable) away from a telephone switching station, the benefits of DSL are lost.
In America (a country that thinks of itself as a telecommunications leader), that translates into more than 50 million people who live in areas
where broadband Internet service is unavailable. Analysts believe that about half of these people are on-line, but have to make do with slow,
land-based access to the Internet through dial-up modems.
The problem in the People’s Republic of China is even more acute.
China’s Internet system is both extremely slow and very limited. Each day, millions of users attempt to log onto an already-overcrowded
telecommunications network.
At the same time as demand for Internet access in China is growing exponentially, the government is struggling to complete installation of
Internet infrastructure in China’s major cities. The problem in rural areas of China is far worse, with much of the country still waiting to be wired
and connected to old-style, fixed-line telephone services.
However, in October 2000, the Chinese government announced that satellite communication technology from KSAT Satellite Technology, Inc.
(KSA on CDNX) would be used to improve the country’s Internet services. By providing two-way, high-speed Internet access via satellites,
KSAT can help China solve its acute shortage of high-speed telecommunications equipment / infrastructure, and make broadband service
available to millions of businesses and consumers.
KSA’s Manufactures & Sells Two-Way, High-Speed Satellite Communication Equipment
KSAT is involved in the manufacture and sale of very small aperture terminals (VSAT’s) satellite communications equipment and service
networks in China to corporate and government customers. The Company’s products allow businesses to transmit huge amounts of data (up to
40 Mb) per second using satellite and telecommunications technology developed by Gilat Satellite Networks, Inc. (NSADAQ: GLITF)
For more information about the company, visit www.ksat.net/company/ksat/default.htm.
KSA currently has 9 major projects underway in China (www.ksat.net/company/ksat/projectnews.htm), and is working with 12 local business
partners (www.ksat.net/company/ksat/business.htm).
However, KSAT’s biggest deal is an agreement with Gilat to deliver Internet services to homes in China under the "Gilat-to-Home China" brand
name. KSAT and Gilat have exclusive rights to offer broadband Internet access via satellite in China !!
This is big news for any company, but to put this in perspective….
(1) Gilat owns 37% of KSAT (and can appoint the Chairman & CEO)
(2) The "Gilat-to-Home" concept just went public in the U.S. under the name "StarBand" in a $300 million IPO.
(3) Microsoft (symbol=??) & EchoStar (symbol=??) hold major equity stakes in StarBand, the first company to offer consumers two-way,
always-on, high-speed Internet access service powered by broadband IP satellite technology
(4) Gilat has successfully been operating in China (and making money!) since 1994
The demand for Internet access in China is huge!
A report compiled by Beijing-based BDA (China) Limited and the Strategis Group predict an average annual Internet growth rate of 60% in
China over the next few years. To illustrate, China had about two million Internet users at the end of 1998. The BDA / Strategic Group expects
that over 12 million Chinese people will be on-line by the end of this year, increasing to 25+ million by the end of 2002. This projected growth in
Internet usage is significant, and we expect that Chinese-oriented web page production will soar in order to support the demand for native
language information.
KSAT Will Be Offering a "StarBand" Type of Product to Consumers in China
To give you an idea of what kind of high-speed, two-way, always-on satellite-based Internet service KSAT will be offering to business and
consumers in China, you don’t have to look any further than what StarBand ( www.StarBand.com ) is now offering in the United States.
The StarBand system uses a single satellite dish antenna for receiving and sending information - no telephone line is needed to access the
Internet. In the United States, StarBand says that customers can expect average download speeds of 500 Kbps and upload speeds of 150
Kbps - far, far faster than the traditional dial-up modem connection!
For people in China, it’s going to come down to a question of: "if you can see the southern sky, you can enjoy Gilat-to-Home China". For
people living in rural or isolated areas, KSAT / Gilat’s products will be the logical solution for tens (if not hundreds) of millions of people in China
who are unable to get broadband Internet service (let alone a phone line!).
There’s nothing new and unproven here.
The KSAT / Gilat-to-Home China technology is based on VSAT technology from Gilat Satellite Networks Ltd. that is currently used in over
200,000 business locations. Gilat’s technology has been the wide-area platform of choice for major businesses throughput the world for many
years.
For people in China, accessing the Internet by using VAST technology should eventually increase connection speeds by up to 100x compared
to using computers w/dial up modems and the country antiquated phone lines.
So, How Does a High-Speed, Satellite-Based Internet Access Service Work ?
KSAT’s system will be just like what StarBand is using (a graphical illustration can be viewed at: www.StarBand.com/howitworks/index.htm ).
Basically, there will be a 24" by 36" satellite dish mounted on a roof or wall, with two standard coaxial cables connect the dish to a PC or
satellite modem. The antenna sends / receives data to a satellite orbiting approximately 22,300 miles above the equator. The satellite, in turn,
will communicate with KSAT’s hub facility, which will have a direct connection to the Internet.
Unlike its satellite Internet competitors, StarBand does not require consumers to tie up their phone lines or retain a separate ISP. And, unlike
DSL and cable modem services, which are limited in availability, StarBand is available virtually everywhere in the continental USA - even in
remote areas. StarBand gives consumers what they want: a high-speed, always-on connection to the Internet that does not require a telephone
connection
KSAT / Gilat Will Be Bringing High-Speed, Two-Way Satellite-Based
Internet Service To China At Least One Year Ahead of Its Nearest Competitor
Currently, no one but Gilat / StarBand is offering true two-way, high-speed, satellite-based Internet access service. Hughes Electronics’
DirectPC system allows users to pull web pages down off of a satellite, but you have to use telephone lines for the return path.
Hughes Electronics (DirectPC) is probably KSAT/Gilat’s most significant competitor. The company plans to launch its own two-way broadband
service ("SpaceWay") in 2002, although the exact roll-out date depends on successful construction and launches of several new satellites.
There’s also iSky, which plans to launch a high-speed Internet service in late 2001 that will target homes and small businesses. Like DirectPC,
the iSky system rollout is contingent upon successful launches of new, dedicated satellites.
In contrast, Gilat’s satellites are already up and running. KSAT also has tapped into Gilat’s proven expertise in offering two-way, satellite-based
data and voice service to businesses and consumers in under-served parts of the world such as rural areas in South America, Africa and Asia.
KSAT Share Structure & Recent Trading Range
Total Issued & Outstanding: 28,560,051 common shares
Public Float: Est’d @ 1,846,951
52-week Trading Range: Cdn$0.20 by Cdn$4.50
Last Trade (November 21, 2000): Cdn$1.45
Gilat Satellite Networks Limited and Global Space Investments Limited (Keppel Group - Singapore) each own 10,606,550 shares of KSAT
(approximately 75% combined).
Included in the issued and outstanding shares of KSAT are an additional 5.5 million escrow shares that will only be released once KSA has
earned cumulative US$0.244 per share of cash flow as defined by the rules and policies of the CDNX.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT
Joseph Leung - Chief Financial Officer
E-Mail: ktnt@HK.Super.net
Phone: 011-85-2-2890-9252
For General Inquiries & Information: ksatbj@ksat.net
