BT has formed an alliance with Microsoft to develop applications for business and residential broadband users.
Linking BT's infrastructure and Microsoft's .Net technology, development teams from both firms will work on around 30 projects in the areas of multimedia home computing, business productivity, mobile computing, portals and web services projects.
Microsoft will provide the additional pay-per-choice content for BT's no-frills broadband offering. BT already works with Microsoft in developing managed web services for enterprises.
"We are very excited about BT's broadband strategy and innovative no-frills product, which we believe is a great catalyst for broadband penetration," said Microsoft chief executive Steve Ballmer in a statement.
BT chief executive Ben Verwaayen added: "We want to do all we can to make broadband as attractive as possible."
The telco recently launched a multimillion pound marketing campaign to promote broadband connectivity.
Zeta Tsatsani, senior analyst at Ovum, indicated that similar deals are needed to successfully develop broadband applications.
"These kind of partnerships will have to increase in number and in depth for broadband applications to develop successfully," she told vnunet.com.
"Many more players need to become involved to make the internet the platform for applications such as e-learning, games and movies.
"This deal is not a surprise. Microsoft wants to be associated with leaders of broadband deployment in order to help its online services. There may be similar deal with cable companies."
However, AOL UK, which rivals Microsoft's MSN online service and BT's broadband and narrowband internet service provision, dismissed the deal as "window dressing".
Jonathan Lambeth, head of media relations at AOL UK, told vnunet.com: "They've been talking of deals like this for six years. Where's the substance? I can't see how consumers are going to benefit from this."
Electronics and computer chain the latest high street retailer to fall into difficulties
Incisive Media and Investec Asset Management supported fundraiser crosses Atlantic in 40 days
Alphabet's health sciences division Verily have been messing with AI algorithms
North Korea's cyber attack capabilities are expanding fast - and turning their fire on a wider range of targets