UPDATED: Price war breaks out between BSkyB and BT Vision over Sky Sports
We're at the official BT Vision/Sky Sports launch event and BT says its prices for Sky Sports 1 and 2 will not be affected by the rumoured price hike from BSkyB.
Andy Baker, director of BT Vision, said: "It feels a little strange that Sky has put its prices up when we're announcing our prices, and in so doing creating a bigger gap in price between the two services. I guess in a way it's flattering."
He also said suggestions that the service wouldn't be making any money from Sky Sports as a result of BSkyB's rumoured price change was "wide of the mark", pointing out that the Sky Sports was just one part of the new BT Vision packages.
"Offering Sky Sports is part of our long-term strategy, and we're investing heavily in our complete broadband, calls and TV packages," Baker added.
High-definition channels are also on the agenda, and BT Vision Freeview HD boxes are due out later this year.
Sky will reveal its own revised pricing for its Sky Sports channels tomorrow, July 2nd. From September, it's expected to charge customers an additional £3 per month for packages that include the main sports channels.
BT Vision has unveiled what it claims is "the UK's best-value deal" for Sky Sports 1 and 2, charging just £16.99 a month and undercutting Sky's own prices which start at £18/month for its Sports Pack.
This follows the news earlier this week that BT and Sky had agreed a deal to allow BT Vision customers to watch Sky's sports channels from August 1st, in time for the new football season.
However, there are already signs that BSkyB may have hit back at BT by raising the wholesale prices at which it supplies its sports channels to BT Vision (and Sky) overnight.
BSkyB is set to reveal its pricing officially on Friday but FT.com suggests the company will raise the wholesale price by between 11-26 per cent. This would see Sky's sports package raising in price by around £3.
The wholesale price hike would have to be absorbed by BT Vision in order to stick to their promise of offering such a cheap deal, which could now see the company losing money for each new customer that signs up to BT Vision's Sky Sports package.
BT will be able to sign up new customers for its Sky Sports packages from today. BT Vision customers can add the channels for a flat fee on a monthly contract, or take either Sky Sports 1 or 2 separately for £11.99.
If they agree to commit to a bundle of broadband and phone calls for 24 months, customers can get the BT "Total Sports Package" starting at £6.99 for Sky Sports 1, ESPN and on-demand sport from BT Vision, or £11.99 for Sky Sports 1 and 2, ESPN and on-demand sport.
Gavin Patterson, chief executive of BT Retail, says: "Football fans will be cheering our new prices, which mark an end to paying for basic channels when you only want the sport. A more competitive market will ensure that customers continue to get the best sport for the sharpest prices, and this opening of the market will be in the best interests of customers."
In March, Ofcom ruled that Sky would have to cut the price it charges rivals to show its premium sports channels. Sky has already appealed against the ruling, and BT says it will follow suit.
"We think the wholesale price is too high and we'll be challenging that through the legal process," Mr Patterson told the BBC.