Freesat has claimed it is winning over BSkyB customers – with almost 400,000 defecting to date – and Ofcom's pay-TV review is expected to provide an additional surge in new signings for the fledgling digital satellite TV service.

The joint venture between the BBC and ITV announced today that it has passed 1 million customers. The company, which provides a free-to-air alternative to Sky's pay-TV digital satellite service, claimed that 40% of Freesat customers are former Sky subscribers.

"Freesat is a great opportunity for the millions of homes with existing satellite dishes who are used to quality TV but no longer want to pay a monthly subscription for it and we continue to see an increasing number of viewers moving across from pay TV," said Emma Scott, managing director of Freesat.

Scott added that Ofcom's pay-TV investigation, which is expected to conclude that BSkyB must cut the price it charges rivals for its premium sport and movie channels when the final version is published later this month, will lead to a further surge for Freesat as new services are launched.

"We are watching [the pay-TV review] with great interest as we are very interested in [third-party retailers] offering pay TV services," she said. "The review is an opportunity for all TV platforms in the UK to offer undbundled sports and movies. It is also an opportunity for BSkyB in the process; this could be another market for their channels."

Freesat also claims it has the edge on Freeview, which as a digital terrestrial TV service does not have the high definition TV capability for as many channels or UK-wide coverage.

The satellite operator claims that 200,000 fewer households had Freeview as their only source of digital TV at the end of last year, compared with the end of September. This equates to 2% of the digital terrestrial television service's customer base, putting it at 9.7 million households getting digital TV via Freeview at the end of 2009. BSkyB put on 172,000 customers in the same period to move to 9.7 million subscribers in the UK.

Freesat will also be launching the ITV Player this summer and a full ITV HD channel from 2 April.

"Much of what we're now working on is paving the way for next generation free TV with innovations like BBC iPlayer and ITV Player," said Scott. "We will continue to add value to the service by integrating Canvas if approved by the BBC Trust and we are following Ofcom's pay TV review with interest.

"From our customer panel survey we know that 40% of Freesat homes had Sky before getting Freesat. The majority tell us they have replaced Sky with Freesat. 30% of Freesat customers claim they were paying Sky subscribers and 10% claim to have been Freesat from Sky viewers."

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