In an attempt to spoil the launch of Richard Branson's new Virgin Media launch Sky has announced that it is developing plans for the launch of a subscription television service on digital terrestrial television (DTT) this summer that will go up against Freeview.

The launch of the new service will mean that Freeview customers will lose Sky Three, Sky News and Sky Sports News.

The new service, due to be launched later this year will allow customers to receive some of Sky’s most popular programmes according to the broadcaster including sport and movies - through a conventional rooftop aerial and a set-top box for a monthly subscription.

The line-up of channels on the new service will offer a range of content including sports, movies, entertainment and news.

The sports service will include live coverage from the Barclays Premiership and other top events. Full details, including branding, pricing and the complete channel line-up, will be revealed closer to launch.

Sky plans to broadcast its pay-TV channels using the more efficient MPEG4 compression technology.

To access the service, customers will buy a new set-top box that includes the relevant CA software and MPEG4 decoder.

It is anticipated that once the service launches multiple manufacturers will have the opportunity to produce compatible set-top-boxes and other DTT receivers.