Telstra is launching its own device to enter the television video streaming fray where it will battle head-to-head with Apple TV and Google Chromecast.

The telecommunications giant will introduce Telstra TV into Australian homes in September – a device that streams internet video services such as Netflix and Stan to home televisions, Fairfax Media reports.

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The service will work much the same way as Google’s Chromecast, with a device that plugs into TV sets and hosts apps that play catch-up and on-demand services as well as streaming content provided by Presto and YouTube.

According to Fairfax Media, Telstra, which owns a 50 per cent stake in Foxtel, is being warned launching this service might force its Foxtel subscribers to drop the pay-TV offering.

However Telstra say the move into the technology is designed to win Telstra new internet subscribers without paying the hundreds of millions of dollars it would need to become a media producer.

The company’s group managing director for media and marketing, Joe Pollard, told Fairfax Media the telco’s target is the entire remainder of the market that doesn’t currently hold a pay TV subscription.

Because the streaming technology would be more affordable, however, the streaming services which Telstra TV supports are seen as potentially damaging to Foxtel’s pay-TV model.

“We really see this as the entry-level product to enable people to see streaming video on demand,” Ms Pollard said. “These types of devices tend to be additive to the full-meal deal that is a pay TV service.

“We will not be positioning this as a substitution for Foxtel at all. This is very much for non-pay-TV customers.”

Ms Pollard explains that Telstra expects a lot of customers to keep Foxtel because the pay-TV service has a wide range of live sport that is hard to match anywhere else.

The service will run on the American ‘Roku 2’ device which channels internet video content through the home television.

It will be available to Telstra broadband subscribers only and will come at an extra subscription fee. The Roku 2 cannot record live TV and doesn’t not have a tuner.

More details about pricing and available content will be released in September.