Internet provider Orcon is building a network to support Sky's launch of its new online television service iSky.

The service would allow subscribers to access Sky content from their computers and was set to go live before Christmas, Orcon said.

The company was building a nationwide content delivery network which would use Alcatel-Lucent's next-generation Velocix technology and Kordia's nationwide data network.

The technology enabled Orcon to build a network that provided high-quality internet-based video, Orcon's head of wholesale Charlie Boyd said.

"Ultimately this is about getting content housed closer to the end user, reducing the cost to access it and reducing the price to consumers," he said.

As streaming TV websites and video-on-demand grew in popularity, the amount of online video watched by broadband users was also growing at an "incredible rate", he added.

In Sky's annual report, released today, chief executive John Fellet said the Government's ultra fast broadband was a "great opportunity" and would only be a threat if Sky didn't use it to its advantage.

"We are agnostic about technology; that means that we can extract value from our content no matter what device the consumer wants to use," he said in his letter to shareholders.

"We need to be on every type of device the customer has, whether it is a TV, PC or mobile or via satellite, cable, IPTV, broadband, WIFI or 3 and 4G," he said.