SHARES in British Sky Broadcasting Group fell nearly 8 per cent to 437 pence after Europe's number two satellite broadcaster said it will incur "significant" costs to lure UK customers to its digital television system.

BSkyB, which plans to start its digital service on 1 October, said it will install digital television satellite dishes for free. The company said its cost, at pounds 80 per dish, will be "significant" but will improve profit and cash flow in the long term.

Broadcasters hope that digital television will boost viewership and advertising revenue. BSkyB aims to serve 6 million homes by 2003, half the estimated market.