The service, available in two options, and aimed at households, uses fibre optic technology to offer download speeds of up to 40Mb/s.

BT is investing £1.5 bn in creating a new fibre network available to 10m homes by the time of the 2012 Olympics games, rolling out fibre to the cabinet (FTTC) and fibre to the premise (FTTP) services.

BT claims it will have 500,000 homes connected by the end of next month and 4 million by the end of this year. The service has been trialed in Muswell Hill, Whitchurch and Glasgow Halfway.

BT is comparing the new BT Infinity packages directly with those offered by rival . BT Infinity pricing starts at £19.99 per month, a price which BT insists is cheaper than Virgin Media, a saving of £7.47 per month on Virgin Media's XXL highest speed service according to BT's figures.

Virgin Media's up to 50Mb XXL service costs £28 per month when you also take a Virgin Media phone line costing £11 per month vs. BT's Infinity Option 1 which will offer download speeds of up to 40Mb/s from £19.99 per month when taken with BT line rental costing from £11.54 per month.