A revolution in the broadcasting industry that will mean people will be able to order up programmes over the Internet to view on their televisions may be delayed for more than a year, because of the Government's reforms of the telecommunications industry.

Sky TV and free-to-air consortium Freeview both expect to begin selling set-top boxes next year that can connect to the Internet as well as receive programmes broadcast by satellite and terrestrial transmitters. Sky is spending $50 million transferring its archives and studio systems from magnetic tape to computer disk in preparation for the service.

But Telecom Wholesale head Matt Crockett says he does not believe Telecom's broadband network will be able to support downloads of TV programmes to set-top boxes till late in 2009, because of other pressures on the telco, and doubts over who might fund the replacement of its copper network with fibre optic cable.

"Network connectivity is not going to be available next year. I think it is going to be very challenging for this industry to deliver full-blown IPTV as early as that."

Mr Crockett says the vision of providing multiple channels of high-definition TV programming to households over the Internet depends on shortening Telecom's copper local loop – reducing the 2km average length of copper phone lines by bringing fibre optic cable closer to the home.

"Between deploying what is the world's first broadband wholesale product of its kind, local loop unbundling and operational separation, it is just impossible for the industry to do more," he says.

Freeview general manager Steve Browning says Mr Crockett's assessment is a surprise, but underlines the importance of the free-to-air digital TV consortium.

"If the distribution of decent quality video over Internet protocol is that far away, it means the traditional broadcast ways of doing it – terrestrial and satellite – are even more important. I would have thought Telecom would be more aggressive than that, but I guess it is down to investment dollars and the regulatory environment."

Sky TV chief executive John Fellet has said that an example of the benefits of Internet-connected set-top boxes is that subscribers would be able to view any episode of Friends when they wanted, and that TV channels that stream content at scheduled times may become redundant in time.

Spokesman Tony O'Brien says Sky will begin supplying a set-top box that can connect to the Internet by June, but it would be some time after that before the feature could be used. "We hope to offer a service as soon as it is viable."

The set-top box will be able to download programmes and show them later, so need not require a very fast broadband connection. The "second-generation" MySky box will also include a larger hard-disk drive to store more programmes and will be capable of showing programmes in high- definition HDTV format.