The prediction from Datamonitor is more conservative than the IPA's recent claim that Freeview would overtake Sky this year.
The latest figures show Sky had 8.18m subscribers at the end of June, while Freeview was in 7.1m households at the end of March.
However, while Sky added just 77,000 subscribers in the second quarter, while Freeview was taken up by an extra 800,000 households in the first quarter.
Sales of Freeview boxes during the quarter were up 40% year on year to 1.2m, as people bought boxes for their second TV sets.
Datamonitor's view is that the success of Freeview and Sky, combined with the impetus from the merger of NTL and Telewest, will drive digital TV penetration in the UK to 95% by 2010.
However, it expects internet TV (known as IPTV) services such as those being rolled out by BT and Sky, will be a niche proposition throughout Europe with the exception of France, where cable and satellite penetration is low.
There will be 9.5m IPTV subscribers across Europe by the end of 2010, it estimated.
Finally, it expected Europe will continue to lag the US in the rollout of high definition TV, the appeal of which will be limited to early adopters despite Sky, ITV and the BBC now broadcasting some programmes in HDTV.
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