In 1999, Uruguay requested eight orbital positions to the International Telecommunication Union (ITU). A year later, when the body required the corresponding royalty payment, it gave up six satellite orbits and kept only two of them: 78º West and 75.5º. The country still holds a debt of US$ 150,000 for the non-payment of those six satellite networks resigned.

With such background, last December, the Uruguayan Chamber of Representatives ratified the bill that grants the Uruguayan orbital position 78º West to the Bolivarian Republic of Venezuela so it invests, installs and operates the commercial satellite “Venesat 1”, within the draft Satellite System Simón Bolívar. The text was only approved with votes from the official party Frente Amplio, since the opposition considered the agreement as “inconvenient as regards economic and national sovereignty issues”. According to the Uruguayan opposition, the joint venture between the countries could cause problems if Venezuela tries to use the satellite with military purposes. However, the agreement states that if such military use is carried out, Venezuela will be punished by the International Telecommunication Union (ITU).

The agreement stipulates that the satellite will be exclusively used for governmental traffic of telecommunications. Venezuela should act pursuant to technical and regulating features coordinated and registered before the ITU and should be in charge of the infrastructure, launching costs, and any eventual damage that may appear. In exchange to the orbital position, Venezuela ensures Uruguay, at no cost at all, and upon demand, the use of up to 10% of the device operating capacity, which would represent US$ 50 million if the satellite complies with the planned useful life, around 10 and 15 years.

León Lev, president of URSEC (Regulating  Unit of Communication Service) from Uruguay, explained that, as he informed to LatSat Análisis, transponders will be used for the access to digital television, public television, administration of State-owned companies, tele-medicine, tele-education, system computerization of Public Health Ministry, General Management of Lotteries, and security of official banks.

Article 8 of the treaty establishes that Venezuela will train Uruguayan human resources and that a joint research line will be established for aerospace matter. Venezuela will have two terrestrial stations, and Uruguay will take control of Antel's terrestrial station, the Uruguayan State-owned telephony, located in Arroyo de Manga.

The satellite that will be launched to space in 2008 and will be in operations in the first quarter of 2009, is a result of the agreement between the Ministry of Science and Technology of Venezuela and the Chinese company Great Wall Industry, in charge of the construction. The agreement with the Chinese company included the participation and training of 90 Venezuelan professionals in the manufacturing of the device that will have a useful life of 15 years. The bill required an investment of US$ 229 million to the Venezuelan State and the payment includes the purchase of the satellite, terrestrial control stations, teleport and the launcher, while Uruguay’s contribution is restricted to the orbital position and a terrestrial control station.