The Chinese Government's drive to provide every single citizen with telecom services means that Israeli firm Gilat Satellite Network Co Ltd hopes to more than double its presence in the world's most populous nation.

The company aims to profit from the central government's massive effort to provide huge swathes of rural China with telecom services.

"2004 is going to be a prosperous year for satellite communications in China and it is top of our agenda to further develop this market," said Oren Most, chief executive officer and president of the Israeli company.

Implementation of a universal service obligation (USO) by the Chinese Government will bring with it a great potential for the development of satellite communications in rural regions, the NASDAQ-listed company's chief said in Beijing on Tuesday.

The USO requires telecom operators to provide services to all of Chinese people, no matter how remote the area they live in.

Several Chinese operators are currently in talks with the Israeli firm, aiming to win a "large portion" of 80,000-telephone-line projects, said Most.

Satellite communications, with their low costs and large geographical coverage, will be especially suitable for western China.

The company, which established its first China office 10 years ago, will double or even triple its current 10-people team in the nation, if its bids for the projects are successful.

Local production is also something that the company is looking into, a move, which would reduce costs and help it compete with its US arch-rival Hughes Network Systems Inc.

Most said the company would invest several million dollars in the expansion scheme.

Gilat sold or donated more than 10,000 satellite communications terminals to China over the past 10 years, including more than 2,300 terminals purchased by Xinjiang Telcom and Tibet Telecom.

But Gilat's business in China remains very small, about 1 percent of its total revenue, despite its 10-year presence in the country.

Most believed his company would see "dramatic growth" in China and launch more new products onto the market.

"We want China to become a major market for Gilat."

He pointed out that rural telephony, long-distance education, banking and postal services will be major markets for his company.

Besides the traditional satellite telephony service, which allows users to make phone calls, Most said data service will also be a promising area for his company.

According to Most, his company has an 80 percent share of the worldwide rural satellite telephony service market and 40 percent of data service market.

He said his company would aim to achieve at least the same proportion of market shares in the world's most populous country.

Gilat said in January that it would provide 300 satellite terminals for the Central Agricultural Broadcast and Television School in China to help the latter conduct distance education courses for Chinese farmers.

(China Daily February 26, 2004)