BSkyB has also become the first of the three competing digital providers to confirm a launch date for its service - 1 October.

The company, which already beams a multi-channel analogue service into millions of UK households, will hope to tempt new digital viewers with a competitively priced package.

Old dishes will need adjusting

It includes free installation of new satellite dishes, cut-price subscription and a handful of exclusive, top-name channels among the total 140 channels.

The move comes just two days after digital terrestrial TV's ONdigital set out its stall, offering free channels and the added incentive that viewers can receive signals through their existing television aerial.

The channel has pledged to be on air by the autumn, although no firm date has been set.

Cable television provider, Cable and Wireless Communications (CWC), is also planning to launch its digital service later this year.

BSkyB disclosed that Sky Digital hardware, including dish, set-top box and remote control, would go on sale at £199 for new customers and £159 for existing subscribers, with free installation, saving each up to £100.

BSkyB is already established in analogue broadcasting

Existing Sky customers could opt to keep their current dish, but would have to pay for it to be repositioned.

The installation offer was being made at "significant cost" to BSkyB, the company said.

It promised at least 200,000 boxes - made by Pace, Amstrad, Grundig and Matsushita - would be in the shops in time for the Christmas selling period.

BSkyB also hopes to undercut ONdigital by offering basic subscription packages at under £10 per month - cheaper than its own current analogue offerings.

Exclusive channels

It will also be the only digital platform for five channels - MTV, VH1, Nickleodeon, Paramount Comedy and the new interactive music channel M2. These channels will remain exclusive to BSkyB for up to three years, the company said.

The company aims to sign up half the 12 million pay television homes which it is estimated will exist in Britain in 2003.

Aggressive maketing

Chief executive Mark Booth said: "We are leading the digital television revolution and will gain greatly from being the first to launch."

"We are prepared to make the investment necessary for success to optimise our position.

"I am confident that our decision to market aggressively, including the offer for free installation, will ensure that we can establish Sky Digital ahead of the competition and thus derive maximum long-term benefit for our shareholders."

In a separate development, Pace Micro Technology said it had received an order from CWC to make 100,000 digital cable set-top boxes over 18 months.