"The launch of Sinosat 2 will enable farming households in outlying areas to receive radio and TV programmes with as much choice and high-quality signals as urban cable subscribers have," Sino Satellite Communications Co-President Cheng Guangren told China Daily.

With a mission life of at least 15 years, the satellite, which will blast off from the Xichang Satellite Launch Centre in Southwest China's Sichuan Province, is capable of transmitting up to 200 channels of radio and TV programmes to users throughout China, including Hong Kong, Macao and Taiwan, he said.

More important, the initiation of the direct broadcast satellite project will prompt further opening up of China's satellite TV service, whose expansion is hindered by a 13-year-old regulation prohibiting individuals from setting up dish antennas without permits, he added.

The State Council's Decree 129, issued in 1993, prescribed a fine ranging from 5,000 yuan (US$625) to 50,000 yuan (US$6,250) for violators, in addition to confiscation of equipment.

"The direct broadcast satellite project has been approved by the State Council, indicating the State supports and encourages development of the satellite service industry," Cheng said. "I believe Decree 129 will possibly undergo modifications."

The revised decree will still impose restrictions on urban residents, said Huang Qifan, an official with the State Administration of Radio, Film and Television (SARFT), on Friday. Huang refused to reveal any more details on the revision.

Direct broadcast satellite service, or DBS, refers to satellite television systems in which the subscribers receive signals directly from geostationary satellites.

Sinosat 2, developed on the domestically made Dongfanghong 4 satellite platform featuring long life and high capacity, will allow end users to receive radio and TV signals using dishes as small as 0.45 metres in diameter, Cheng said.

The executive said his company just provides the "infrastructure" for broadcasts; it is up to the SARFT to decide how the resources will be used.

SARFT sources have said the country will make changes to current statutes to facilitate the development of DBS services.

Sinosat 2 will be joined by ChinaSat 9, another DBS developed by France for the China Satellite Communication Corp (ChinaSat), to be launched in the second half of 2007, according to Cheng.

The two satellites will form China's first-generation DBS system, promising 100 per cent reliability of broadcast services for customers without any glitches during their years-long operation, Lu Lijin, a senior engineer with the ChinaSat, told China Daily earlier.

Experts predicted that at least 100 million households in China would install satellite receivers in the coming five years, producing a tremendous market.

Cheng's company has entered into a deal with ChinaSat to set up a 50-50 venture to manage the DBS space segment resources.

The venture is expected to "take some shares" in a company to be established by the SARFT and China Central Television, which would provide ground services, Cheng said.

Insurance of the Sinosat 2 satellite, totalling US$120 million against launch plus one-year in-orbit operation, was underwritten by the People's Insurance Company of China (PICC) Property and Casualty Co Ltd, according to Lu Shu, an official of the country's largest property insurer.

"We have confidence in the reliability of Chinese rockets and satellites," Lu said.

Cheng's company, a Beijing-based satellite operator founded in 1994, also owns Sinosat 1, a communications satellite launched in 1998 for broadcasting and telecommunications services.

The company plans to launch three more satellites for communications and DBS services in the coming 10 years, Cheng said.