"BT's announcement comes less than a week after BSkyB and Telewest announced similar trials to launch into what analysts see as a sizeable growth market.
"Last week the BSkyB chief executive, James Murdoch, said subscribers would be able to download sports and movies to their computers when its on-demand service launches later this year - designed partly to help it reach a target of 10 million subscribers by 2010.
"Telewest, the UK cable operator that is soon to merge with rival NTL, also said last week it was launching a TV-over-broadband trial.
"The company currently offers four channels, including highlights from its Living TV, Bravo, Challenge and Trouble channels, which it runs through content arm Flextech.
"AOL and Wanadoo, which both rent lines off BT to provide customers with broadband connections, are also planning to introduce video-on-demand.
"BT's new service will also compete with HomeChoice [link], which offers television, on-demand films and digital channels such as E4 and The Paramount Comedy Channel to over 15,000 subscribers nationwide."
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