Ntl Telewest is taking on BT and Sky by giving a free digital TV service to anyone signing up to its home phone service.

Customers will get all Freeview channels, Sky One and high definition TV channels. The digital set-top box also offers the chance to add additional paid for services.

These include premium sports, movies and the company's Teleport TV service; this lets viewers catch up on a selection of TV programmes week to week.

However although Ntl Telewest, formed by the merger of Ntl and Telewest, said its services can be accessed by over 12 million UK homes, some will have to wait for add-ons such as the TV-on-Demand features.

This includes the company's recently launched TV Drive. This is a rival to Sky's personal video recorder (PVR), which its customers can add to their package. It records up to 80 hours of TV as well as allowing users to burn programmes and films to DVD.

At the moment only customers in Telewest areas can get the PVR and high-definition services. In addition, on-demand services such as movies are only available to around 80 per cent of customers. However, both features will be rolled out to all customers by the end of the year.

The company boasts the basic new free TV package could produce a saving on BT and Sky prices of over £150 in the first year. It bases these figures on price comparisions with BT's Option 1 phone package plus Sky's two mix digital TV subscription.

The free TV package is available to new and existing customers. Prices start from £11 per month including line rental and unlimited local and national weekend calls.

Rental and on-going maintenance of the set-top box is included in the price. There is a one-off installation charge of £25.

Neil Berkett, chief operating officer at Ntl Telewest, said: "This is a great deal for consumers who can now sit back and enjoy digital TV and on-demand services without worrying about expensive upfront or monthly costs."