Sky launches pay DTT service ... on the same day Virgin media rebrands

BSkyB is launching a subscription television service on digital terrestrial television (DTT) this summer, offering four channels understood to be Sky Movies, Sky Sports, Sky News and Sky One.

BSkyB is launching a subscription television service on digital terrestrial television (DTT) this summer, offering four channels understood to be Sky Movies, Sky Sports, Sky News and Sky One.

To access the service, customers will have to buy a set-top box for an undisclosed sum.

The announcement is timely, coming on the same day that Sky's main rival unveiled its new brand, Virgin Media, and said it planned to ' aggressively attack' the satellite broadcaster's dominance in sports and movies.

It will also see Sky take on Setanta by offering Premiership football on the DTT platform.

And Sky will drop Sky Three, Sky News and Sky Sports News from Freeview, dealing a hammer blow to another of its rival platforms.

A spokesman for Sky said the satellite giant had 'noticed an untapped market' for connecting free-to-air customers to Sky's content. 'We are to create more choice for viewers who are interested in upgrading from free-to-air content to pay-TV,' he said.

Sky is planning to broadcast its pay-TV channels on DTT using MPEG4 compression technology. This enables Sky to offer four 24-hour video streams in place of the three Sky channels currently available. The spokesman said further improvements are expected in future.

Multiple manufacturers will have the opportunity to produce compatible set-top-boxes and other DTT receivers.

However, the launch is subject to approval by Ofcom in terms of the variations to licences held by Sky and National Grid Wireless, which provides DTT transmission and multiplexing services to the broadcaster.

A Virgin spokesperson said, 'We don't yet know how much consumers will pay for this service, particularly given the need for a new set top box. But what's certain is that the timing of this hastily-assembled announcement is a response to the launch of Virgin Media.'