Cut Your TV Bill By £246 a Year!

Sky and Virgin may have kissed and made-up, but which provider is cheaper when it comes to the packages they offer? We reveal all...

Readers of my blog will know that last week, Virgin Media and Sky finally ended their 20 month subscription spat, reaching a long-awaited agreement which will see the two companies share basic channels once more from Thursday.

This is good news for consumers, many of whom were left in virtual limbo when Sky pulled the plug on channels such as Sky One last year. With the digital switchover slowly gathering pace, now could be a good time to consider your options if you feel like taking the digital plunge.

But, whether you've got your heart set on a Freeview box or are thinking about splashing out a bit more, what are your options, and which provides best value for money?

Both Sky and Virgin offer a plethora of services and choices according to your viewing habits. Here's how they shape up when it comes to comparing some of their packages:

As you can see from the table, there's not much between the two when it comes to price, although for the basic channels, Virgin emerges the cheaper.

There are, however a few things worth pointing out.

Although Sky and Virgin have made peace - this comes at a price. If you're a Virgin customer wanting to tune into Sky One and Two, you will need to opt for either the L or XL TV packages, which start from £9 a month.

In addition, one of the most important things to remember is that in order to take advantage of Virgin's deals, you need to take out a Virgin phone line, which costs £11 a month (although you can keep your existing phone number).

Personally, I think it's a question of quantity versus quality. In terms of channels offered, Sky gives you more channels for your money, especially when it comes to movies. However, unlike the Sky packages, where you must pay for an entertainment base pack, Virgin is a lot more flexible, giving you greater freedom to tailor your package, and at a lower price.

For example, Virgin offers Setanta Sports as standard with its XL package, which you could also opt for on its own with the free M package, costing just £12.99 per month.

Sky on the other hand requires a minimum spend of £28 a month for one Sky Sports channel and Entertainment pack (Virgin's equivalent costs £24 without Sky One and £28 with). Sky is also currently offering £15 credit when you join online.

Stay free with Freeview

If you'd prefer not to be tied to a monthly contract, you could also opt for a Freeview box for as little as £20. This one-off payment gets you 48 digital TV channels, with the comfort that you'll never have to pay a monthly subscription fee. A Foolish choice for many methinks (although you don't get Sky One with Freeview).

Alternatively, Sky also offers a `Pay Once, Watch Forever' service where for a one-off fee you can tune in to over 200 channels. The service costs £75 and you can buy a pack from Argos, Dixons and other similar retailers. The £75 payment includes the cost of a dish and installation.

Find a bargain with a bundle

If you are leaning towards Sky, one of its main perks is that all customers get free Sky broadband with its TV service.

Bundling packages in this way is quickly becoming the norm, and several providers including Sky, Virgin and even BT offer such packages, together with deep discounts and freebies in order to reel you in.

If you already pay £15 or so per month for your broadband service alone, you may want to consider taking a package like this, which for a few extra pounds per month could end up providing good value for money.

Here's a selection of some of the basic packages available:

Again, the world is your oyster when it comes to choosing your bundle, and there are several combinations available to entice you to part with your money.

Tiscali is the clear leader when it comes to the numbers alone, and offers broadband and digital television, as well as free weekend UK and international calls for just £15.99 a month for the first three months, and £19.99 thereafter. You don't even need to pay BT line rental on top of this.

In this way, you could save £246 a year by opting for Tiscali over BT (excluding introductory deals). A word of warning however. Tiscali's customer service has left a lot to be desired in the past, and any more views on this from fellow Fools would be greatly appreciated.

At the other end of the scale, if you stick with BT, its Vision service will cost you a minimum of £40 a month to get their complete service.

In fairness to BT, its most basic package offers an enhanced number of channels, including Setanta sports, and is also HD ready. In this way it could provide good value depending on what you watch.

The world of digital media is a vast one, and the different combinations available could end up leaving your head spinning. The important thing to remember is to buy a package which is tailored to your viewing habits and not pay more than you should. Personally, I think bundles are the way forward -- as long as you use all the services that is.

More: Ditch BT And Save £118 A Year / Download Free Music For A Year!