BEIJING - China may let SinoSat-2, a communications and broadcast satellite that failed a month into orbit, fall back into the atmosphere and burn up, Xinhua news agency said on Wednesday.

China's first direct broadcast satellite Sinoset 2 blasts off from launch pad in this picture taken on October 29, 2006. [Xinhua]

The satellite, launched on October 29, has been unable to deploy solar panels and antennae, making the promised broadcasting and telecommunications services impossible, owner and operator Sino Satellite Communications Co. (SinoSat) said on Tuesday.

The manufacturer, the Chinese Research Institute of Space Technology, still believed the trouble was only temporary and was trying to fix it, Xinhua said.

But Fan Xingmin, spokesman for SinoSat, said ground control should manoeuvre the satellite out of orbit to prevent it from becoming space junk if it cannot work properly.

"If SinoSat-2 cannot be restored, it has to be pushed out of orbit to leave room for its substitute," Xinhua quoted Fan as saying.

The company has said that it will launch another television satellite, SinoSat-3, in the first half of next year.

SinoSat-2 has been billed as China's first direct-to-home broadcast satellite that would help millions of households in remote areas receive more than 100 TV channels.

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It was also designed to serve live television and digital broadband multimedia systems in Hong Kong, Macau and Taiwan for 15 years.

A Hong Kong-based group said earlier this month that the mainland could lose 100 billion yuan ($12.8 billion) of potential revenue over the next five years if the satellite, which cost 2 billion yuan, failed.

But Fan was quoted by a Shanghai newspaper as saying that SinoSat had signed no formal contracts with any clients of the satellite that had been insured, suggesting the company was not liable to pay compensation.

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