BBC to press ahead with free satellite TV

The BBC yesterday added to BSkyB's problems by announcing that it is to press ahead with plans to provide a free digital satellite television offering.

Rupert Murdoch's Sky is currently fighting regulators to be allowed to keep its 17.9 per cent shareholding in ITV.

The BBC will heavily market its "Freesat" service, which will enable consumers to watch television via satellite without a subscription. It would involve one-off installation costs, after which dozens of free-to-air channels would be available.

Up to now, Rupert Murdoch's Sky has had the satellite market to itself in the UK. The company does offer its own free satellite deal but it is not heavily promoted and rivals have been suspicious of Sky's commitment to it. Sky has 8.4 million paying customers.

The BBC's acting chairman, Chitra Bharucha, said: "A new, guaranteed subscription-free satellite service would provide the public another option when deciding which platform to choose.

"Over half of those yet to switch [to digital television] fall outside the Freeview coverage area. For these homes, the new service would mean being able to access BBC digital services they have already paid for via their licence fee but until now have been unable to receive on a guaranteed subscription-free basis."

The BBC hopes to market Freesat as a joint venture with other public-service broadcasters. ITV yesterday said it would support the BBC's move.

Around 7 million homes in Britain do not have digital television. Currently, Freeview, a terrestrial service, is the only major free digital technology for receiving television. All television signals will be digital-only by 2012.