BT Group is to spend £100 million on its long-expected BT Vision TV service and expects the new offering to attract up to three million users and to make profits by 2010.
The former telecoms monopoly said today the investment in BT Vision will take place over the next year and that it sees a big market for the broadband-delivered service.
BT is the second company in Britain after cable group NTL to offer fixed-line, mobile and Internet and TV services, and its TV plans will pitch it into competition with NTL and Bskyb, which dominate the pay-TV market.
But unlike pay-TV and cable rivals, BT does not plan to charge any subscription or minimum monthly charges for the service, relying instead mainly on a pay-as-you-go model.
BT Vision will be delivered via a set-top box combining a Freeview digital TV receiver with a personal video recorder that will be able to store content, pause or rewind live TV delivered over high-speed Internet connections to the television.