Sky prepares to launch digital television boxes

BSkyB is poised to announce the launch of its set-top box for digital satellite, and will select three manufacturers to supply the equipment within two weeks, writes Mathew Horsman. Pace Microtechnology is expected to be a preferred supplier.

The boxes, which will allow subscribers to receive Sky's digital television service, will also include a high-speed modem for Internet connection. BSkyB has the backing of telecoms giant BT and Barclays Bank. BSkyB hopes to attract the help of manufacturers and retailers to ensure the boxes cost no more than pounds 200, despite indications that the current retail price for similar equipment is about pounds 400.

BSkyB has developed a dual-track strategy to sell digital equipment through the high street and to supply boxes directly to analogue customers who want to upgrade to digital. The company is eager to protect its 3.8 million analogue subscriber base, even as it attempts to convert as many as possible to the new digital service.