200 channels for BSkyB

A huge shake-up of Britain's digital TV services was unveiled today by BSkyB.

In a surprise move the broadcaster said it will launch a new service offering up to 200 digital TV and radio services without charging any subscription.

Viewers will have to pay only £150 upfront for a set-top box, a mini-dish and a viewing card and installation.

The service, known as free to air satellite, will be launched later this year and represents an aggressive new move from BSkyB's recently appointed chief executive James Murdoch, son of the company's chairman Rupert Murdoch.

He said: "This is another step in giving consumers a choice from Sky that suits their needs at the top and lower ends of the scale."

The new service will be a major challenge to Freeview - the successor to the former ITV Digital - which is owned by the BBC, Crown Communications and BSkyB. Freeview uses digital terrestrial technology and offers 26 TV channels and 21 radio stations.

BSkyB said the new service will offer 115 TV channels and 81 radio stations. But the vast majority will be of limited popular appeal.

Beyond the BBC's six channels, ITV1, Channel 4 and Channel 5 the offering will include CNN, Extreme Sport, Sky News and the shopping channel QVC. It will not include the Sky movies or sports channels.

However, people who buy the free to air system will have the option to pick and choose among Sky's 96 different packages including its basic family package of 100 channels including E4 costing less than £20 a month. Mr Murdoch clearly hopes people will take the free service and then upgrade to subscription services.

The move is also a response to broadcasting watchdog Ofcom which wrote to Culture Secretary Tessa Jowell recently urging the Government to set a date for analogue switch-off and to give more impetus to the switch to digital.

Ofcom's chief executive Stephen Carter said: "This is a welcome move from Sky. More choice in digital TV is clearly a good thing." BSkyB now has

7.3 million subscribers and has set a target of eight million by the end of next year. Users of the new system will not count as subscribers but will form a ready target market for the company. Freeview, meanwhile, has no means of knowing who its viewers are and cannot sell directly to them.