Satellite Industry Development Law

On November 4, 2015 the Argentine Congress approved Law No. 27,208 called “Law of Satellite Industry Development” (the “Law”), that was published in the Official Gazette on November 11, 2015. The Law declares the development of the satellite industry as a state policy and of national priority the development of geostationary satellites of telecommunications to be of public interest.

The Law approves the “Argentine Geostationary Satellite Plan 2015-2035”, (the “Plan”), and entrusts implementation to the “Argentine Company of Satellite Solutions” (“ARSAT”), created by Law No. 26,092, in addition it has attributed the orbital position 81° West.

The main objective of the Plan is to strengthen developed and installed capacities for the development of geostationary satellites of telecommunications and the exploitation of satellite services in Argentina. It provides for the development and launching of a series of 8 new geostationary telecommunications satellites in the next 20 years, bound for the marketing of satellite services by ARSAT or selling platforms.

It also stipulates the realization of research and development in order to reach a new geostationary satellite of telecommunications platform with more payload power as an evolution of the current ARSAT satellite platform, as well as increasing the national component of Argentine geostationary satellites.

ARSAT’s bylaws provide for issuance of Class “A” shares (in favor of the Argentine State), “B” and “C” (the latter two to be acquired by third parties through public tender proceedings or stock public tender offers). In order to guarantee the Argentine State’s control over ARSAT, the Law sets out that the capital of ARSAT will be represented by 51% of Class "A", shares setting restrictions on the transfer of these shares without the express authorization of two thirds of the members of the Argentine Congress.

The same authorization is required for any act or action that limits, alters, deletes or changes the destination, availability, ownership, domain or nature of the essential resources and associated resources of the Information Technology and Communications and Telecommunications ("ITC"), as defined in "Digital Argentina" law, which belongs to ARSAT.

The frequency bands reserved preferentially for ARSAT will be used for the implementation and operation of services and applications for which these bands are allocated, giving priority to public protection applications and operations of emergency and defense, complementing ARSAT’s ITC network services, and serving primarily the most vulnerable areas of the country, in their own projects or partnerships with Licensees of ITC services.