1. Presented to: Alaska Broadband Task Force Open Skies Program - Next Generation by Spacenet August 01, 2012

2. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Agenda Spacenet Overview Satellite Broadband for Rural America –StarBand Open Skies Overview –StarBand Presence and Experience in Alaska Open Skies Program – Next Generation Next Steps and Q&A 2

3. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Our Passion Managed Network Services Provider –Design, Implement and Manage Data, Voice and Video Networks Tailored Managed Network Services to Meet Customer’s Precise Needs –Access, Security –Full Lifecycle Solutions –Value-Added Services Technology-Neutral Approach –Satellite, Broadband, MPLS, DSL/Cable, 3G/4G Serve 4 Primary Markets –Enterprise (Large, Multi-site Business Networks) –Government (Public Safety, Emergency Management Agencies) –Industrial (Oil & Gas, Utilities) –Small Office/Home Office (StarBand High-speed Internet) 3

4. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Our Network Nationwide MPLS & Satellite Network 130,000+ managed sites 1.5Gbps of B/W across multiple satellites 60,000+ Broadband circuits provisioned On-Site Field Services 4

5. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Satellite Broadband Ubiquitous Communications Delivers Broadband Virtually Everywhere, Irrespective of Distance Established Technology that Can Deliver Broadband Instantaneously (No need for build-out) Measurable Commodity (i.e.: TRUE Cost of Delivery is Exactly Known) Scalable and Reconfigurable New Generation Satellite can deliver 10x the speed of current technology 5

6. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com StarBand Open Skies Alaska $100M Set Aside for Satellite in Broadband Initiative Program (BIP) –Funded by American Recovery and Reinvestment Act –Administered by Rural Utility Service (RUS) of USA –Spacenet Awarded $6.2M for Alaska – handled by StarBand –Allows for ~4200 Households in Alaska –Grant Expires September 2013 6

7. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com StarBand Presence in Alaska History –StarBand was the First Company to Offer 2-way Broadband Satellite Internet Solution in 2000 –First Customer Installed in Alaska in 2001 –3,028 Active Sites in Alaska –198 Alaskan Communities Currently Served –Over 40 Dealers and Installers Open Skies Accomplishments To Date –2,074 Open Skies Sites in Alaska To Date –141 Alaskan Communities –~$1M Contributed to State Economy through June 30, 2012 Installation, Commissions, Shipping, Advertising 7

8. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com StarBand Experience in Alaska 8

9. Presented to: Alaska Broadband Commission Open Skies Program - Next Generation by Spacenet August 01, 2012

10. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Technology Approach for 100% Broadband Coverage Tiered Strategy –Terrestrial (Fiber/DSL) Coverage for ~70% of Alaska Population –Wireless - Last Mile to Reach Additional 10-20% –Satellite-Only Economic Option to Reach last 10-20% 20K Households in Villages with Density of < 300 Households Estimated 30K households (10%) in Areas Covered by Terrestrial, but Beyond the Last Mile Reach Similar Model to Australian Next Generation Broadband Network Strategy –Alaska Has Significantly Higher Percentage of Isolated Population, but Similar Tiers of Cost Analysis Would Apply 10

11. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Technology Approach for 100% Broadband Coverage 11

12. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Satellite Economic Models and Considerations (ROM) High-Throughput Satellites (HTS) Typically Provide 100Gbps Capacity –Via Multiple Spot Beams and Earth Station Gateways –Typical Spot Beam Capacity ~ 250Mbps – 1Gbps: Approx. Number of Spot Beams for Alaska = 8-16 Approx. Number of Gateways for Alaska = 1 – 2 Total Capacity for Alaska= 4Gbps – 8Gbps Support 10/3 Mbps Service to 50K Subscribers –~$400M per HTA Satellite to Serve 500k subs = $800 Satellite Capital Cost per Subscriber For 50k Alaska Subscribers, Est. Cost is $40M –Alaska Gateways Estimate: $10M –~$500 CPE Cost For 50k Alaska Subscribers, Est. Cost is $25M –TOTAL for 50k Subscribers Capital Cost Estimate: $75M Capital Cost $1500/Subscriber Capital Cost –New Technology Designed to Allow for Self-installation and Maintenance 12

13. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Satellite Economic Model (Cont.) User Populations: Different Needs and Abilities to Pay (Overall Solution Can be Profitable) –Alaskan Rural Residents Need Coverage to Bridge Digital Divide, but Cost is Significant Factor –Alaskan Tourism Industry Remote Lodges and Destinations Need Coverage to Satisfy High- end Customers –Commercial Interests Mining/Oil & Gas/Pipeline Customers Require High Reliability, 100% Coverage –First Responders Significant Bandwidth Available for Critical Situations with No Restrictions on Location (13)

14. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Satellite Economic Model (Cont.) Ownership/Division Models –State Could Purchase Partial Satellite Partnering with Another Party Interested in CONUS Coverage –State Could Agree to Long-term Lease on Partial Satellite –State Could Purchase Entire Satellite Distribution Options –State Could Provide Service Directly to Residents and Commercial Interests –State Could Wholesale Service to Multiple Providers (Australia Model) (14)

15. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Satellite Economic Model (cont.) ROI for the State: –Assume a wholesale model of $15/sub/month charged to the ISP –Assume the ISP charges market rates of $40-$50/sub/month –Assume 50k subscribers Total Revenue/Month to the State –$750k/month ROI for a $75M investment: 8.33 years, IRR 9% Typical life of a Satellite: 15 years (15)

16. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Conclusions Goal of High Speed Broadband to ALL Residents in Alaska is an Absolute Paradigm Shift Tiered Approach is Most Practical Way to Achieve Goal –Fiber to the Home in Densely populated Areas –Fiber to the City mixed with DSL/Cable/Wireless for the Last Mile –Next Gen. Satellite for Rural, Last Mile Fill-in, and Emergency Response Next Generation Satellite Costs will Allow for 8-10x the User Experience at Lower Costs than Current Satellite Technology Commercial Satellite Providers have not seen Alaska as economically viable and will not focus on it without the influence of the State Spacenet, and it’s parent Gilat, are Uniquely Qualified to Provide Alaska the Experience and Technology to Realize the Next Generation Satellite Option 16

17. Appendix

18. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com Starband Open Skies Alaska Promotion: In Print Newspaper Ads, Inserts and Direct Mail 18

19. © 2012 Spacenet Inc. Not for redistribution without permission.www.spacenet.com StarBand Case Study: Northwest Arctic Borough Centered out of Kotzebue (not eligible) –Significant Penetration: 50-60 % Considered Saturated Keys to Success –In Region Support Long-time Dealer has Mentored Village Specialists –Positive Word-of-Mouth Impacts –Facilitates Small Businesses Inventory Management, Sales –Enables Inter-village Communication Via Facebook, email –Teacher Satisfaction 19