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By Graeme Wearden, 17 October 2002 13:15

NEWS Sky Digital customers who sign up for BT's "no-frills" broadband package will get their DSL modem for free, under an agreement announced today. The special offer, which is available to subscribers to Sky Digital's Sky World package, means a saving of £80. BT believes that the offer will help it reach its target of 500,000 "no-frills" subscribers by next summer. Angus Porter, managing director of BT Retail's consumer division, said in a statement: "This deal is a key driver in helping us achieve a higher volume of broadband connections and builds on our existing relationship with BSkyB. "We are very confident that this will be a competitive proposition and I expect the offer to Sky customers to account for around 20 per cent of BT Broadband sales." BT and Sky announced back in July that they were teaming up to offer BT Broadband - the "no-frills" product - on special terms to Sky's user base. Similarly BT plugs Sky subscriptions to its customers. The partnership between BT and Sky represents an attempt to diminish the value for money offered by UK cable firms Telewest and NTL who offer all-in-one pay-tv, landline and broadband packages. However, Telewest is unfazed by BT's latest move in the broadband sector. Gavin Patterson, managing director of Telewest Broadband, said: "BT can't compete with the simplicity and value of our blueyonder broadband service. For £50 we will send a qualified technician to get you up and running, whereas Sky customers will still have to pay a £65 activation fee for the pleasure of doing the wiring themselves." BT Broadband was launched earlier this year, and is offered by BT Retail rather than the telco's internet arm, BTopenworld. Unlike traditional broadband services it does not include features such as email or web hosting. It costs £28 per month, or £27 by direct debit. Some ISPs offer more feature-rich broadband services for less than this, leading to accusations that BT Broadband is poor value for money. BT Retail, though, has insisted that it isn't economically viable to offer broadband for any less than the cost of BT Broadband. Graeme Wearden writes for ZDNet.co.uk