The home-entertainment war will intensify this week when Virgin Media launches a campaign to retain customers disappointed by the loss of Sky channels from its packages.

Sir Richard Branson’s group, formerly known as NTL Telewest, will initially target high-end users by doubling their broadband speed from 10Mb per second to 20Mb for an additional £2 a month, making it the fastest mainstream broadband service in Britain.

However, critics have branded it a marketing gimmick because all but the most sophisticated users will notice little difference between the new speed and that of Sky, which is 16Mb for its top package.

The new Virgin service, which will come into effect by the end of May, will potentially allow users to download an MP3 song in about two seconds, or a DVD-quality film in about half an hour, if everything works at the optimal speed.

At 16Mb you could download a song in about three seconds and a 5GB film in 45 minutes — not much slower. With a standard broadband speed of 4Mb, however, it would take three hours to download a film, and one-and-a-half hours at 8Mb, which is where Virgin starts to come into its own.

Aamir Baloch, head of telecoms at Firsthelpline.com, a comparison site, said there is currently little difference between 16Mb and 20Mb download rates. “At the moment, very few of us would need such high-speed broadband connections. Only those heavily into online gaming, or downloading large music or video files, or watching TV over the internet, would need them,” he said.

“However, in a year’s time we might all be watching TV via the internet, and these kinds of speeds may become the norm.”

The spat between Virgin Media and Sky — partly owned by News Corporation, ultimate owner of The Sunday Times — started when the latter withdrew Sky One and other channels such as Sky News from Virgin customers at the beginning of the month, following the breakdown of talks between the two firms.

The 3.5m Virgin Media customers are now unable to view programmes such as The Simpsons and 24.

Other shows such as Nip/Tuck, which are produced by Fox, a sister firm of BSkyB, can be viewed by Virgin customers only after they have been broadcast by Sky.

Virgin has hit back by establishing links with other content providers such as Warner Brothers. The move will allow Virgin Media customers to watch new episodes of popular shows such as The West Wing, but it is not clear whether this will be enough.

Virgin Media is believed to be losing about 100 subscribers a day as a result of the ongoing war.

Virgin Media said it will allow its TV customers, and those with both TV and broadband, to cancel their contracts during March without having to pay off the full term.

However, this offer does not apply to customers who have subscribed to broadband services only.

Virgin customers who wish to leave for Sky and who only want TV should go for the latter’s basic package. This costs £15 a month, and the satellite dish comes free. You will also need BT line rental for the digibox, which costs £125 to set up, as well as £11 a month line rental — a total of £26 a month. A switchover could take around a month to complete.

Sky’s key TV, broadband and phone package, the 8Mb “See Speak and Surf”, costs £37 including the BT line rental. The satellite dish is free but there is a £20 activation fee. You get free evening and weekend landline calls as well as Sky One.

Virgin’s three-for-£30 package comes with 2Mb broadband and free weekend calls. The TV package has fewer channels, and does not include Sky One. So you pay slightly more with Sky but get faster broadband and a wider choice of programmes.

Sky is cheaper than Virgin if you go for its premium package, however. Virgin’s top stand-alone broadband package currently costs £35 a month and £85 a month if you subscribe to its VIP — Very Impressive Package — deal, which also comes with more than 100 TV channels and free landline calls at any time.

It is not clear if the extra £2 a month for the 20Mb speed applies only to stand-alone broadband customers.

Sky’s premium package offers TV with all its premium-rate sports and movie channels, free evening and weekend calls to UK landlines and 16Mb broadband for £79.50 a month.

Virgin customers could alternatively have a hybrid package by keeping their broadband and phone line with Virgin and switching their TV subscription to Sky.

A hybrid package will cost £37 for Virgin’s 20Mb broadband; £11 a month for a phone line with free weekend and evening calls and £15 a month for the basic, Sky TV package that includes Sky One — a total of £63 a month.

If you are happy to stick with Virgin, you should still demand compensation for the loss of the Sky channels. Either dial 150 from your Virgin Media landline or call 0800 052 9403.

Depending on the package you have, it is possible you will be offered a free upgrade for six months, but there are no guarantees.

Analysts say it is difficult to choose between the two. Jason Lloyd of Mon-eysupermarket.com said: “Sky has far better content, but Virgin is better positioned to offer faster and more reliable broadband services.” Unlike Virgin, which delivers broadband through a fibre-optics system, Sky uses BT’s copper-wire network to deliver its broadband services. Fibre-optics can potentially deliver 100Mb per second, while copper-wire technology is limited to about 32Mb.

Sky will never be able to offer speeds of more than 32Mb. “This is Sky’s potential Achilles heel,” said Lloyd.

“Services via a fibre-optic network are better quality in terms of speeds or download capabilities.”

BT is planning to upgrade its broadband network to fibre-optics, but customers are unlikely to see any real benefits until 2008.