BT today outlined its ambitions to become a television company that allows its viewers to "watch what they like when they like" over the internet within the next year.

The former telecoms monopoly is to work with Philips, the electronics group, to offer a set-top box that will allow viewers to access more than 30 digital terrestrial channels and to replay their favourite programmes.

The service, which BT says will not be subject to a subscription fee, will be launched in the late summer or autumn of next year.

However, BT has not said how much a set top box would cost or how much users would have to pay to access content such as films. Customers will have to be signed up to BT broadband services to access the television service.

The move will pitch BT against satellite broadcasters such as BSkyB and content-on-demand providers such as HomeChoice. It follows the trend towards telecoms, cable and television companies overlapping in terms of the products they offer.

Last week BT shares fell to a five-month low after BSkyB, which is 37.2 per cent owned by News Corporation, parent company of Times Online, announced the acquisition of Easynet for £211 million.

Easynet will form part of a new BSkyB division, Sky Broadband which will compete with BT for customers. The deal will allow BSkyB to offer "triple-play" services - a combination of broadband, television and telephony.

BT had already made it clear that it intended to move onto the television company’s turf to offer the third part of its own triple play. The BT-Philips partnership follows a deal between BT and Microsoft earlier this year under which the software company will provide the platform for BT’s broadband television platform.

BT’s large customer base could provide it with a powerful advantage as it enters the television market. BT Retail, the arm of the company that will run the television service has more than 20 million household and business customers in the UK.

As well as access to freeview channels, the BT service will include a "video on demand library" that will include the last seven days’ television and films.

The set-top box will also include a video recorder that will store up to 80 hours of programming and will allow users to access instant messaging and video telephony services as well as online games.

Ian Livingston, BT Retail’s chief executive, said the new service would "place power in the hands of the viewer".

He said: "No longer will BT customers be reliant on TV schedules. From next year, they will be able to watch what they like when they like."

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