Deutsche Telekom on Monday signed an agreement to establish the Deutsche Telekom Laboratories at Ben-Gurion University, marking the first time the telecommunications giant has established a research facility outside of Germany. The company has committed to a $12.1 million investment over the next two years in the institute, which includes a $4m. pilot security project signed in June 2005. Under the agreement, DT will finance the research done by the institute, while BGU will provide the space and cover service expenses. Speaking at the signing ceremony at the university in Beersheba, Deutsche Telekom CEO Kai-Uwe Ricke said the company, with its Israeli partners, was also examining options to provide venture capital in Israel and to establish an incubator model. "There is no question that Israel is one of the best locations in the world for innovation in the areas of IT and telecommunications," Ricke said. The institute will be an academic satellite of the Deutsche Telekom Laboratories in Berlin and will build on previous partnerships the company conducted with the university. "On the basis of our initial activities, we launched a close collaborative research and development effort, in which 35 members of the university are now working on DT projects," he added. Dr. Yuval Elovici, who will head the institute, said the company started working with the university 18 months ago with three studies to see if the university had the capability to handle larger projects. "This is just the start," Elovici said. "If we show that we can produce excellent results, I believe they will invest more." The institute will initially be involved in five topics, the most important being computer network security, which involves cleaning the traffic and data flow of the DT infrastructure. Outgoing BGU President Prof. Avishay Braverman said the decision to invest in the Negev was "a direct result of the university's efforts to propel applied research, particularly in hi-tech industries, in the region."