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November 2, 2000
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New Skies in bandwidth pact with Satyam

Dutch communications firm New Skies Satellites NV has tied up with India's leading private diversified Internet firm Satyam Infoway Ltd to provide it satellite bandwidth, a top company official said on Thursday.

"We are making significant investments in the Indian sub-continent and this contract with Satyam Infoway is an important milestone in our plans for this region," New Skies' chief operating officer Daniel Goldberg said.

Under the agreement, the Dutch satellite firm will provide a total of 60 megabits of international Internet bandwidth to Satyam, at six locations across India, for a period of four years from January 2001.

Satyam Infoway's chief operating officer George Zacharias said the firm would pay New Skies $600,000 a month for the bandwidth.

New Skies' senior vice-president sales and marketing Rudo Jockin said the firm would be diverting bandwidth on the NSS 703 satellite, from a transponder currently directed at the Middle East to the Indian subcontinent.

"While this would happen in the fourth quarter of this year, the importance of India as a very key market for us can be seen from our plans to dedicate an entire satellite, the NSS 6, to Asia," Jockin said.

The firm, which listed its shares on the Amsterdam bourse in early October, will invest $250 million in the new satellite to be built by US aerospace firm Lockheed Martin Corp.

New Skies' shares were trading unchanged at 10.50 euros on Thursday morning on the Amsterdam exchange.

The shares, which touched a low of 9.25 euros in its maiden trading session on October 4, are now closer to their life high of 11 euros on October 6.

New Skies, which had revenues of $82 million in the first six months of 2000, said it had generated five percent of its revenues from India, with 25 per cent of all Internet-related communications revenues also from India.

"We see strong demand for bandwidth capacity driven by the Internet side in the coming years in this region," Goldberg said.

An Indian industry body expects the Internet subscriber base to cross the five million mark in the next 18 months, from 1.6 million subscribers in September.

The Dutch firm is also among a clutch of international satellite firms eyeing opportunities in the Indian direct-to-home satellite television broadcast market, which the Indian government threw open earlier on Thursday.

"We expect that once the convergence bill is passed, the demand for bandwidth from DTH video broadcasters will really open up and we see a lot of future in India for DTH," Goldberg said.

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