``There shouldn't be any interference problem,'' chairman of state-owned Chunghwa Telecom, Chen Yao said of ST-1, co-owned with Singapore Telecom.

ST-1 orbits close to the path of Beijing's new China Star-1,raising concerns of interference and poor communications quality. The US$240 million ST-1 satellite, a 50-50 venture with Singapore Telecom, was launched late last month from the European Space Agency's South American launch centre.

It orbits along 88 degrees east longitude. Beijing's China Star-1 orbits at 87.5 degrees east. ``Before the launch, our partner Singapore Telecom had registered the launch position and relevant procedures with the International Telecommunication Union,'' Chen said.

``The Singapore side had negotiated the interference issue with the mainland side, and both sides had reached consensus on how to removethe interference,'' Chen added.

Local media reported that during talks, China asked Taiwan's defence ministry to be barred from using ST-1's transponders or China would not agree to solve the interference problem.

Chen declined to say whether China had made such a request.

``Chunghwa will not reject any clients from using the ST-1 service as long as it is for commercial purpose,'' he said.

``Until now Chunghwa Telecom has yet to sign lease contracts with any companies or organisations,'' Chen added. The satellite, Taiwan's first, would enable Chunghwa to greatly improve its communications quality across Asia, including mainland China and India, the company said.

Taiwan and Singapore signed the joint-venture agreement in 1995 and a turnkey contract in 1996 with Europe's Matra Marconi Space, which supplied the satellite and launch services through Ariane space. Matra Marconi Space is a joint venture of Britain's General Co Plc and France's Lagardere Group.