Sky triples price of viewing free-to-air channels

The broadcaster BSkyB has quietly tripled the price of viewing digital free-to-air channels over its satellite platform, ahead of a planned push of free digital channels by rivals at the BBC and ITV.

From the start of this year, the price of taking a Sky set-top box and having it installed without a subscription to Sky's own channels has jumped from £100 to £315. Instead of a free box, Sky will now charge £215, plus £100 installation.

A spokesman for the company said it was a "commercial decision to withdraw the [previous] offer".

A source at another broadcaster said: "Sky keeps telling the Government to use satellite TV to promote free-to-air services in the drive towards the analogue switch-off. This is hardly a positive step in that drive."

The competitor added that Sky was afraid that when the BBC started pushing hard its free digital channels, Sky's £100 deal would become much more attractive, costing it dearly. Sky has put its cost per new subscriber at £237.

So far just an estimated 25,000 people took the £100 Sky offer in order to view free channels. However, ITV and the BBC are currently planning a joint promotion of the free channels available on digital television. It is hoped that the campaign will kick off in time for the football World Cup this summer.

The scheme is crucial to ITV's digital terrestrial platform, which hopes the promotion will arouse so much interest in digital television, it can stop giving away set-top boxes.

Sean Eddy an analyst at Bank of America, said Sky was signalling it was only interested in premium customers with the free-to-air price hike.

"Sky does not want to compete at the bottom end of the market, the ITV end. The market is segmenting. Sky and the cable companies will now squabble over the top of the market," Mr Eddie said.

Separately, Rupert Murdoch, Sky's chairman, told a US media conference that his company would put no new money into KirchPayTV, the troubled German broadcaster in which it has a 22 per cent stake. Kirch admitted yesterday that it had missed its 2001growth targets.

Mr Murdoch also signalled a recovery in the US advertising market. "In December we were up a couple of per cent from the year before ... and for January, February and March we are at least level on last year," he said.