When BT Vision comes online later this year, it will offer pay-per-view TV shows and films from a library of up to 1,000 titles, priced to be competitive against ntl’s Video-On-Demand (VOD) service.

Neville Manuel, who is director of strategy and business development at BT Vision, said in an interview with the Sunday Herald that the only thing stopping him launching a full TV-by-broadband service right now is that the infrastructure currently won’t support it.

But he warned: “Things might look very different in two or three years’ time.” The prospect is a BT set-top-box in the home, with a similar line-up of channels to those currently available on cable or satellite, plus a pay-per-view service that is the equal or better of anything the competition can muster.

As well as offering broadband internet, BT Vision boxes will have a Freeview decoder and a hard-disk based Personal Video Recorder (PVR) built in, further challenging ntl which so far has been unable to offer a PVR to any of its customers, apart from those in Telewest areas where a PVR service was rolled out prior to the companies’ merger in March.

The second generation of BT Vision boxes, due to be available by late 2007, will also come equipped with a video camera, enabling video calls between BT Vision-enabled homes.

The service is likely to be of particular appeal to rural customers who do not have access to VOD at present, and who may live many miles from a DVD rental shop. But BT Vision’s pricing is certain to see it challenge ntl in a sector it has until now dominated relatively unopposed.