ISRO will launch two such satellites in 2009 and 2010, both having overseas payloads.

The small satellites are now in demand because its "mass and volume are low, thereby reducing the cost of carriage by rocket. Further, the cost of building the satellite as well as the time required to build it are less," D.V. Raghava Murthy, ISRO's small satellite projects director, told IANS.

"The satellites give a good performance owing to miniaturisation, and simultaneous launch of several satellites is possible if the orbit is same," he added.

ISRO has two small satellite variants - micro and mini.

The micro satellites weigh 100 kg with a payload capacity of 30-40 kg while the mini satellites would weigh 400 kg with a payload capacity of 200 kg.

ISRO is also making communication satellites - INSAT series. Its INSAT-4 series satellites weigh around four tonnes and cost about Rs.3 billion.

In April this year, ISRO shot its first mini satellite - Indian Mini Satellite (IMS-1) - weighing 85 kg on board the Polar Satellite Launch Vehicle (PSLV-C9).

"The cost of IMS-1 was around Rs.500 million. The value of each satellite would vary depending on its payload - the instruments it would carry," Murthy said.

"The mini satellite has two high performance payloads - multi-spectral camera and hyper-spectral camera. Injected into polar sun-synchronous orbit, the satellite is providing good data," said the 52-year-old Murthy, who was the project director for Cartosat I and IMS-1 satellites.

The mini satellite too has advanced features.

"The miniaturisation technologies, developed for small satellites, can be transplanted to bigger ones, thereby reducing their weight," he added.

ISRO will launch its second micro satellite YOUTHSAT next year, carrying two Indian payloads and one from Moscow University, Russia.

"We will also launch SARAL, a mini satellite with French payload some time in 2010," Murthy said.

Speaking of the application potential of small satellites, he added: "It is mind-boggling. They can be used in remote sensing, atmospheric monitoring, gas detection, pollution monitoring, ionospheric tomography, ocean monitoring and studies, low earth orbit communications, stellar monitoring, space physics experimentation, data collection and others."

The small satellites will initially be flown as "co-passengers" in the Indian rockets PSLV and Geosynchronous Satellite Launch Vehicle (GSLV).

According to Murthy, many space agencies are now involved in making small satellites.

ISRO will be crossing swords with the Britain-based Surrey Satellite Technology Ltd, OHB Germany, Canada's MDA and Comdev, Israel Aerospace Industries, Orbital Sciences in the US, Thales Alenia in Europe among others.

The Indian space agency, having the necessary expertise in making big communication satellites, hopes that it can supply satellites to overseas players.

"We are targeting a revenue of around $60 million from manufacturing satellites for others," K.R. Sridhara Murthi, executive director of Antrix Corp Ltd, the commercial arm of the Indian space agency, told IANS.

ISRO has built and delivered a 32 transponder satellite, W2M, weighing 3,200 kg for the Paris-based Eutelsat Communications.

The order is from Europe's leading satellite system specialist EADS Astrium.

The transponders supplied by a European manufacturer were assembled at ISRO's satellite centre in Bangalore.

ISRO has won another contract from Avanti Screen Media, again through EADS Astrium, to make a highly adoptable satellite.

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