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Microsoft and British Telecom Team Up
To Integrate Internet With Mobile Phones

By Oliver August  The Times of London
NEW YORK — British Telecom and Microsoft formed an alliance Monday to develop data services that will offer access to the Internet from mobile phones around the world.

The deal — which emphasiZes the increasing co-operation of computer and telecom companies to exploit the benefits of new technology — is in direct competition to Symbian, the partnership of Psion, Ericsson, Nokia and Motorola. On Monday shares in Psion, which recently hit all-time highs on the London stock market, fell sharply as details of the rival offering emerged.

Of the BT-Microsoft tie-up, which could yet be joined by AT&T;, the U.S. telecoms group, in the venture, one Wall Street analyst said: "BT is obviously serious about being a player in wireless Internet services. They've made a powerful point. Wireless Internet is becoming the next big thing in telecoms."

Some analysts agree with the projections of mobile operators that next year more mobile phones with Internet connection will be sold than laptop computers.

BT will involve Concert, its international corporate customer arm, in the alliance which will offer services primarily aimed at businesses. Concert was originally built up as part of BT's attempted takeover of MCI, the U.S. phone company. The failure of that deal left a gaping hole in BT's U.S. expansion strategy which it now hopes to fill with the new Microsoft and AT&T; links.

Microsoft's main interest in the deal is establishing the Windows operating system as a universal standard for mobile Internet communications.

Paul Maritz, Microsoft's group vice-president for platforms and applications, announced the partnership with BT at an industry conference in New Orleans.

Last November, Microsoft and Qualcomm of the U.S. created a joint venture, Wireless Knowledge, to develop wireless services for business customers in the U.S. The alliance with BT is expected to focus on non-U.S. customers, with trials in the UK beginning in the spring.

In another link-up of telecoms and computer companies, Motorola and Cisco Systems, the Internet hardware company, on Monday agreed an alliance to develop mobile Internet technology.

The two companies say they will spend up to $1 billion over the next five years to make the Internet as versatile over mobile networks as through telephone lines.

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