£30 digital boxes planned

The box will be operated by a remote with a screen

Set-top boxes for digital terrestrial TV could be in the shops for just £30 next year, boosting the government's push to persuade viewers to convert to digital.

The announcement by TVCompass came in the same week the BBC was awarded the licence to broadcast 24 free-to-air digital channels, including some from satellite broadcaster BSkyB, and interactive and digital radio services.

It's a gamble

Stephen Voller, CEO, TVCompass

TV Compass said the boxes would be available from spring 2003, soon after the new TV services start to roll out.

The company believes that demand will be so great that up to 10m homes could have switched over to digital by 2004.

But the company has admitted it will lose money on the cost of manufacturing and distributing the boxes - and will have to claw it back from revenue generated by interactive TV services and TV shopping.

Chief executive Stephen Voller told BBC News Online: "It's a gamble.

Voller believes the price will suit multi-set households

"It's a business gamble, but it'll also be a gamble in the sense that we expect a large proportion of the money we make to be from betting, especially on live sporting events."

But Mr Voller said the price had been carefully considered to bring more people into using digital TV.

Decoders currently cost between £100 and £150.

'Quality content'

"There is a limit to the number of people prepared to pay £400 to £500 for pay-TV services," he told BBC News Online.

"We think that when more quality content becomes available free-to-air, many people will be satisfied with 24 channels of TV.

"We were delighted that the BBC won, because we believe that free-to air is the way to go," he added.

The new receiver, consisting of a small set-top box and a remote control handset with a built-in screen, will be manufactured in the Far East.

TV Compass said that through the remote viewers also would be able to take advantage of travel and shopping offers and access services like the government's information portal, UK Online - as well as placing bets during live sporting events.

And the company hopes the price of the box will enable multiple-TV households to buy one for each set.

ITV Digital, which collapsed earlier this year, offered its users internet access and interactive services under the ITV Active banner.