As expected, Shin Satellite Plc (ShinSat) announced yesterday that in May, it would launch iPSTAR broadband services in China through an agreement with China Satellite Communications Corporation (China Satcom).

"The deal has been clinched and we are waiting for another license from China's Ministry of Information Industry, also our project partner, to launch the services to Chinese clients," ShinSat's investor relations director Richard Jones told Agence France-Presse.

The confirmation came a day after widespread rumours of the deal. On Monday, ShinSat's share price rose from Friday's close at Bt11.80 to Bt12.30 in anticipation of the deal, which would greatly boost the company's income. .

The first iPSTAR gateway in Beijing will open for service in May. Additional iPSTAR gateways will later be available in Shanghai and Guangzhou, the company said in the press statement.

"There are currently about 64 million broadband users in the China market and this is expected to reach 100 million. Shin Satellite expects iPSTAR to attract about one million users in total [there]," it said.

The expenses fall under the company's overall US$405-million (15.2 billion) budget to develop iPSTAR, Jones said.

"The Chinese government has targeted a maximum of one million satellite users in the next few years, which is also our target to achieve within the 16-year-contract of our license," said Jones.

The service costs about $1,000 a year in China, and would bring in revenues of $1 billion a year if the company meets its target.

The new service will target clients in remote areas of China which are not covered by other high-speed Internet services, according to Jones.

ShinSat already offers broadband satellite services in Southeast Asia, as well as Australia and New Zealand. Services in Vietnam are set to be launched late this week.

In addition to iPSTAR, ShinSat operates three conventional satellites that offer telephone services and expects next month to launch another satellite dubbed Thaicom 5, Jones said.

China Satcom was set up as part of the Chinese government's industry plan to extend satellite services to the countryside. The company includes several enterprises: China Telecommunications Broadband Satellite Corporation, China Orient Telecommunications Satellite Co Ltd, China Space Mobile Satellite Communication Co Ltd, China Post and Telecommunications Translation Service Corporation and China Telecom (Hong Kong) Chinasat Corporation.

China Satcom expects to offer satellite-based broadband leased lines, virtual private networks (VPN), and various telephony, data and multimedia services for corporate customers, among other high speed services.

Shin satellite launched Thaicom 4 (iPSTAR), the world's largest commercial satellite, in August 2005 to provide the Asia-Pacific region with high-speed Internet access and Internet protocol applications, including voice, data and multimedia.