The BBC and ITV have confirmed plans to launch a rival to BSkyB's 'Freesat' offering.

Freesat, launched last year, offers viewers more than 120 TV and 80 radio channels for a one-off installation fee of £150.

The new service - also to be called Freesat - will target the estimated 25% of homes unable to receive Freeview.

"As we move from an analogue to a digital environment, Freesat - and Freeview - will enable every family in the UK to enjoy a wide range of quality channels for free," said ITV chief executive Charles Allen.

A spokesperson for the BBC added: "We believe that the development of a free satellite service as a simple, open standard will encourage innovation, quality and range among providers of satellite services, extend choice for audiences, and bring the UK an important step closer to being a fully digital nation."

The service is expected to launch early next year.