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Astrolink, Telespazio Terminate Contracts (Nov. 7)



CARLSBAD, Calif.---ViaSat Inc. received notification from Astrolink International LLC of the termination for convenience of two ViaSat ground segment contracts.

These two contracts relate to the development and production of terminals and service provider gateways for the Astrolink satellite system. This termination requires Astrolink to pay ViaSat a termination amount that is based on a predetermined formula provided by the contracts.

In addition, Telespazio SpA has notified ViaSat to suspend work for up to 90 days on a contract for the production of dedicated gateways for the Astrolink system. Telespazio awarded this contract to ViaSat's Satellite Ground Systems Division in April 1999.

Lockheed Martin, one of Astrolink's investors, announced last week that it would not invest further in the Astrolink program. Development and initial infrastructure deployment for the broadband, Ka-band project was to continue through launch of the Astrolink satellites in the first half of calendar 2003, at which time subscriber terminal shipments were planned to commence. Astrolink contracts, in total, have accounted for approximately 10% to 15% of ViaSat revenues in recent periods and were not expected to increase materially for the next 18 months.

ViaSat is evaluating its Astrolink operations and plans to manage its cost structure in a manner consistent with the change in Astrolink's status through a combination of redeploying key personnel to other projects and staff reductions. ViaSat plans to re-deploy personnel to maximize its prospects on other satellite broadband and emerging defense communications opportunities.

ViaSat is continuing discussions with Astrolink and other interested parties regarding potential alternatives for the Astrolink project.

ViaSat produces advanced digital satellite telecommunications and wireless signal processing equipment for commercial and government markets. ViaSat has a full line of VSAT products for data and voice applications, and is rapidly building market share in Ka-band satellite systems, from user terminals to large gateways for both geosynchronous and low earth orbit systems. Other products include information security devices, tactical communication radios, and communication simulators.

ViaSat has locations in Carlsbad, CA, and Norcross, GA, along with its Comsat Laboratories division in Clarksburg, MD and additional field offices in Boston, MA, the United Kingdom, Australia, Chile, China, and India.

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ViaSat Receives Notices of Termination for Convenience And Suspension of Work on Astrolink Contracts