IN A surprise move STAR TV has signed a US$350 million deal to lease 20 transponders, or transmission channels, on the upcoming Apstar2, according to Mr Yang Xueming, the general manager of APT Satellite Co. The new high-powered satellite could enable STAR TV to telecast as far afield as Berlin and be picked up on dishes only a metre wide. The agreement lasts for the 13-years-plus life of the satellite. It was signed on Thursday, said Mr Yang, of the mainland-led but Hongkong-based APT. Mr Yang said STAR TV signed an agreement with his company because the price was right. ''We can provide a better deal with a cheaper launch by our partners, Great Wall Industries Corp of China. Our overheads are far less than AsiaSat's. They have very expensive foreign experts and we have our own people.'' With STAR TV apparently signing a non-exclusive international television contract for broadcasting on Apstar2, a heavy blow has been served to the AsiaSat consortium. AsiaSat is one-third owned by Hutchison Telecommunications, which, like STAR TV, is effectively controlled by billionaire Mr Li Ka-shing. Executives at AsiaSat had expected to continue their relationship with STAR TV. However, relations between the two camps have long been strained as STAR TV is a notoriously hard bargainer and is believed to be at odds with the corporate culture of another one-third shareholder Cable and Wireless. CITIC holds the balance of power between the two groups in the AsiaSat boardroom. With that in mind it could be that STAR TV's agreement with APT is a hard-nosed bargaining ploy. Senior executives of STAR TV declined to comment, but a public relations spokesman, Mr Vincent Mang, said that as far as he knew no deal had been reached with APT for a second generation satellite. He said he believed an agreement for leasing transponders on a second generation satellite from Asia Satellite Telecommunications, the owners of AsiaSat1 and the carrier of STAR TV's five free-to-air channels, still stood. That agreement is believed to have been reached several months ago with STAR TV paying US$200,000 for an option on eight transponders that must be exercised six months before launch. AsiaSat's marketing manager, Mr Andrew Jordan, was reluctant to comment on the declared APT deal. ''Certainly we are not aware that STAR TV plans to sign with anyone else. We already have an agreement with STAR TV and we believe they will honour it. We have worked together for quite a while and it has been mutually beneficial.'' According to Mr Yang, the new satellite, either a state-of-the-art Hughes Aircraft HS601 or General Electric 7000, will be launched at a total cost of approximately $170 million, late next year on a Long March E 3 rocket from Xichang, Sichuan on the mainland. Once launched, Apstar2 will have a reach that will carry into Western Europe and down to Australia, as well as covering most of China and eastwards to Japan. With that kind of coverage some 75 per cent of the world's population could come under the Apstar2 footprint. The power of the second generation Apstar2 will be considerably more than the presently in orbit AsiaSat1. Apstar2 will carry 34 transponders, with 26 ''C-band'', or general broadcast channels, and eight more powerful ''Ku-band'' transponders that will permit TV reception with dishes of less than a metre wide. The satellite is expected to be placed in one of three orbital slots allocated to the Chinese Government at 87.5 E, 98 E or 103 E at 56,000 kilometre above the earth. The quartet of founding partners in APT are three mainland Chinese firms: China Telecommunications Broadcast Satellite Co (the ministry of posts and telecommunications); Ever-Victory System Co (the aerospace ministry); China Yuan Wang Group Co (with close connections to the Chinese military); plus Chia Tai International Telecommunications Co, a subsidiary of a Thai-controlled conglomerate based in Hongkong. APT has also been joined by two other investors, Singapore Telecom and Macau Travel Investment, a telecommunications company associated with Mr Stanley Ho. Each of the six APT shareholders has invested US$10 million in the project.