BSkyB is preparing to enter the broadband connection marketplace.
A growing number of shows are being broadcast on the internet
Aiming to take on market leaders BT, AOL, Wanadoo and NTL, the broadcaster said it would be launching the service in the second half of this year.
Responding to press speculation that it will be offering cut-price deals, BSkyB said it was not giving out any pricing details at this stage.
It is not yet known whether BSkyB will be making any of its TV content available via its broadband service.
"Sky does fully intend to be one of a new breed of broadband providers...to challenge the incumbent providers," said a BSkyB spokesman.
"We fully expect there to be speculation regarding our pricing structure, but we are not giving out any details until nearer the time."
Last October, BSkyB bought existing broadband connection provider Easynet for £211m ($369m).
The BSkyB spokesman confirmed that the new broadband service would build on Easynet's existing infrastructure.
UK connections to broadband nearly doubled to 8.1 million in the year to 30 June 2005.
BSkyB is 37%-owned by Rupert Murdoch's media empire News Corporation.
A growing number of TV stations are experimenting with allowing people to watch some of their shows via the internet.
Analysts say it is almost inevitable that BSkyB will move in this direction.