Microsoft, BT to Develop New Wireless Products

Microsoft Corp. and British Telecommunications took the two companies’ wireless alliance a step further Thursday, announcing plans to develop a range of new devices and services for the market.

The two industry heavyweights will create a mobile portal based on Microsoft’s MSN mobile service, develop new handsets based on the Windows CE operating system and utilizing the BT network, and formulate an industry standard for GPRS and 3G mobile Internet applications.

Multimedia capability will also be a key feature of the new products.

Microsoft (MSFT) and BT expect the new offerings will help transition mobile service to the next generation products and create a mass appeal for the wireless gadgets.

Terms of financing for the projects were not disclosed.

“By deepening our relationship with Microsoft, we believe we can create world-class capabilities for our customers,” said Sir Peter Bonfield, BT’s chief executive. “Mobile multimedia is a fantastic growth
market.”

The alliance began in February as part of a plan to jointly develop corporate data services for mobile customers. Last week, the formidable duo started a trial of wireless Internet services with the BBC, Credit Suisse First Boston, KPMG LLP and Nortel Networks, with help from business partner Telenor Mobil.