BT and satellite TV broadcaster, Sky, have completed a mutual back-scratching exercise aimed at providing a bundle of services to compete directly with cablecos.

The latest instalment of the tie-up between the two companies means that Sky will punt BT's frill-less high-speed Net access service, BT Broadband, to its high-spending customers.

Those who fork out £37 a month for the digital broadcaster's all-singing, all dancing Sky World package are being offered £80 off the hardware cost of signing up for BT Broadband. They'll also receive a £20 credit on their Sky digital bill when they sign up to the service for 12 months.

BT reckons the move cold prove very lucrative, with Sky customers accounting for one in five of all its BT Broadband sales.

BT hopes to have one million broadband customers by next summer.

Angus Porter, MD of BT Retail's consumer division said: "This deal is a key driver in helping us achieve a higher volume of broadband connections and builds on our existing relationship with BSkyB.

In July 2001, BT began offering its customers digital TV services alongside its residential telephone service in a bid to compete with the UK's cable companies.

It claims customers are more likely to buy their services from a supplier which offers TV and Internet together with their telephone service. ®

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