A national digital terrestrial television service (DTT) is losing audience as early technology enthusiasts choose alternative digital TV providers, a Government adviser warned yesterday.

Ms Vivienne Jupp, chairman of the Information Society, said the planned DTT service was "frankly quite late" and warned alternative providers such as Sky Digital were making inroads into the Irish marketplace.

"I'd like to see it move forward as it is a key issue in terms of overcoming the digital divide," she said. "It's not just entertainment but for the information society aspects of the project."

Digital television offers interactive services through an Internet connection on TV sets and is considered a crucial way to bring information technology to people who do not own computers.

Cable operators such as NTL and Chorus recently introduced services in the Republic. Sky also offers Irish customers access to digital TV. But a new terrestrial service transmitted via RTE's network has been delayed by almost a year following wrangling over the ownership of the proposed digital transmission network.

Earlier this year the Minister for Arts, Heritage, the Gaeltacht and the Islands, Ms de Valera, ordered a redraft of the Broadcasting Bill 1999 which is only now passing through the Dail.

Ms Jupp was speaking yesterday at the launch of the third report of the Information Society Commission which pinpointed the delay in digital TV as a major challenge for the Government. "Government must set achievable target dates for the establishment of the necessary DTT operating companies and for the long awaited launch of DTT," says the report.

The report highlighted that telecoms prices in the Republic were still too high, Internet penetration was still well behind the US and Scandinavia and a digital divide remained.

"A large proportion of the population still remains outside the Information Society and this issue is one of the greatest challenges to be addressed," she said.