bbc news BT says it is ready to enter a price war with Sky over the price charged for fans to watch premium sports events, including football and cricket, on TV.
The telecoms firm is awaiting the outcome of an Ofcom probe, examining whether Sky must drop the wholesale price it charges rivals for content.
BT Vision would aim to charge about £15 a month for Sky Sports 1, about £10 cheaper than Sky currently charges.
The outcome of the investigation by the regulator will be known in March.
A spokesman for BT told the BBC that there would be a benefit to the viewing public as they would be getting more choice.
'Perverse'
The Ofcom inquiry into pay TV is also looking at the price Sky charges rivals for access to Sky Movies.
If Ofcom rules that Sky must cut its wholesale prices it means that the likes of BT and Virgin Media could pass on any price cuts to their customers.
BT would look to introduce a new price structure from the start of the 2010/11 football season.
But a Sky spokesman said: "We invest almost £1bn a year to create a top-quality sports service.
"It would be perverse to force us to sell it on the cheap to competitors who have shown no appetite to invest in content or support British sport. Consumers do not benefit if regulation undermines the incentives for companies to invest."
They also indicated that if Ofcom did enforce wholesale price cuts, Sky would appeal against such a decision.
When it launched its investigation in June, Ofcom said it believed "requiring Sky to make its premium channels available to other retailers on a wholesale basis is the most appropriate way of ensuring fair and effective competition".
BT and Virgin have struggled to make a dent in Sky's viewing figures.
Sky has 9.5m subscribers, Virgin has 3.7m and BT Vision has 436,000.
Loss on packages
Virgin Media currently charges between £16.50 and £24 per month for Sky Sports 1 depending on a customer's TV package.
The firm - formerly known as NTL - said it made a loss on every sports package sold because of Sky's wholesale prices and also the need to remain competitive.
"Ofcom's proposals to cut wholesale prices for Sky Sports aren't about subsidising Sky's competitors," Neil Berkett, chief executive of Virgin Media, told the BBC.
He said it was more about "creating a competitive market", and that Ofcom had the means to "bring premium film and sport to millions more people at much lower prices".
