BBC and ITV united to announce a free, 80-channel satellite televison service yesterday in an attempt to create more effective competition to pay TV rivals.

Freesat will allow consumers to get unlimited, as well as high-definition, digital television for a one-off payment, starting at £49.99, plus an £80 installation fee.

The service will carry exclusive high-definition coverage of England’s home football games and FA Cup matches from next season — a plan that prompted immediate criticism from the satellite broadcaster Sky, which is 39.1 per cent owned by News Corporation, parent company of The Times.

Freesat, which is backed by a £6 million marketing campaign, says that it will be better than the existing Freeview service because it will provide many more channels and cover almost the whole of the country.

A lack of capacity limits the number of Freeview channels to 44 and it covers only three quarters of Britain.

Mark Thompson, DirectorGeneral of the BBC, said that the corporation was keen to introduce a free digital satellite service to stem viewer complaints that not all licence-fee payers could access its digital channels. “This introduces a lot more choice and in my view Freesat makes good sense,” he said.

Sky offers a free satellite service, which costs £150 to be upgraded to high-definition. However, it is not marketed heavily, and HD receivers for Freesat are cheaper at £119.99.

Michael Grade, the executive chairman of ITV, contrasted their free satellite service with that offered by Sky. “With Freesat you won’t get people trying to sell you subscription, encrypted services,” he said.

Underlying the new move are worries that Freeview will only be able to handle a limited number of high-quality, high-definition channels. The maximum expected is four — just enough to be shared around Britain’s most watched broadcasters. But, with 9.6 million people owning HD-ready sets, demand for content is expected to far exceed this.

All channels from the BBC, ITV and Channel 4 will be available on Freesat from launch. Five is expected to follow later this year.

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• The real-life adventures of Tintin the spy
• Our universities face a radical upheaval
• Doctor Who