Media: Perspective - BT and Sky still hold plenty of aces in the internet arms race.(British Sky Broadcasting Group PLC)

BSkyB, usually such a trailblazer in the UK media market, has seemed more cautious in recent months despite frenzied activity from other established players.

First, there was ntl's Virgin Mobile deal, which created a business that, in theory, can offer pay-TV, mobile, broadband and fixed-line telephony. Then came Carphone Warehouse's offer of free broadband, with Orange swiftly following, which put pressure on their rivals to unveil similar deals.

Ntl's chief operating officer, Neil Berkett, tried to turn up the heat last week when he was talking about his company's roll-out of video on demand and a Sky+ equivalent. 'This is real, this is happening, so BT and Sky look out,' he said.

Sky, however, does not seem too concerned about ntl's show of strength Perhaps this is because James Murdoch, BSkyB's chief executive, has confirmed Sky will unveil its own broadband strategy later this month. The broadcaster is expected to offer 'free' broadband internet access to subscribers to its Sky World package, essentially meaning customers would receive the premium TV package plus broadband for the pounds 42 per month it costs to subscribe.

Analysts are worried about the cost of introducing the new service, with some predicting initial losses of close to pounds 100 million on the broadband strategy.

But Sky will have thought its plans out carefully - it is not as though it has been sitting on the sidelines twiddling its thumbs while the digital landgrab has been going on around it. Its deal to buy ...