Cyprus signed a memorandum of understanding with Greece and Bulgaria on Thursday to launch a $1 billion communications satellite in time for the 2004 Athens Olympic Games, Agence France Presse (AFP) announced.

Project managers are seeking to raise revenues by renting out the satellite's 37 frequencies to international broadcasters, with the satellite expected to be in orbit by the start of the Games in September 2004.

Bulgarian deputy minister of transport and communications Zdravko Velichkov and his Greek counterpart Alekos Voulgaris co-signed the deal with the Cypriot Minister of Communications Averof Neophytou.

"We will quickly set in motion procedures to attract satellite communications companies to exploit this tremendous opportunity," said Voulgaris. Velichkov for his part said the "memorandum opens the road to an important program that will strengthen ties between our respective countries."

The Vatican is a potential partner in the satellite project, but has so far balked at becoming fully involved, adopting instead a "wait and see" attitude until it appraises the deal's benefits. "We need time to examine this, especially the commercial aspects," Vatican representative Pier Vincenzo Giudici was quoted as saying by AFP.

Cyprus, Greece and Bulgaria will each receive 10 frequencies, while the remaining seven are earmarked for the Vatican. Each frequency will be able to carry four digital TV broadcasts, mobile telephone and Internet connections.

Neophytou said although the partners hope the Vatican will eventually jump on board, its seven frequencies will not be left idle if it opts out. The venture will be bankrolled by local and foreign private investors.

On August 23, Cyprus and Greece signed an agreement to launch two satellites that will provide communications and broadcast services to a potential audience of 400 million people in 28 countries.