Three satellite companies are investing £122.5m in a venture which will offer broadband services to European customers by the end of this year.

The new company will offer two-way satellite broadband communications to enterprises, consumers and SOHO (small office/home office) customers across Europe.

ISPs BTopenworld and Tiscali have both signed up as providers of the service and are currently running pilot projects, said Amiram Levinberg, president and chief operating officer of Gilat Satellite Networks.

Tiscali plans to roll out the satellite service in Germany and Italy in the next few months, Levinberg said, followed by the UK and then additional countries next year. BTopenworld will start a rural service in Scotland and Northern Ireland in the near future and will roll out a full SOHO service late this year, he said.

SES Global, Gilat Satellite Networks and Alcatel (through its subsidiaries Skybridge and Alcatel Space) announced yesterday that they aim to make the so far unnamed company the 'leading European provider of broadband services' by picking up business in areas where cable and DSL (digital subscriber line) networks cannot reach.

"This is not a start-up, greenfield venture. We're not building from scratch. We have existing products and platforms from the start," Romain Bausch, chief of SES Global said.

Alcatel Space chairman Pascale Sourisse said the company expects that up to 25 percent of the potential broadband market in 2005 will not be able to receive service by terrestrial methods.

By 2005 the group hopes to have netted five to 10 percent of the 7.3 million residential customers, 240,000 large enterprises and 1.3 million SOHO customers and small and medium-size firms that won't be reached by conventional broadband.

For 'consumers' and small firms and for some larger companies the group will provide broadband communication services through Gilat's 360 VSAT satellite modem. This gives speeds up to 20-times that of a dial-up modem, the companies said. One satellite dish will be suitable for both television and broadband access, the companies said.