Jane Martinson in New York 

Microsoft plans BT deal

Microsoft, the world's biggest software company, is to announce a "major deal" with British Telecom and a number of high-profile business alliances in the race to dominate the next generation of mobile phones, according to a private company email obtained yesterday.
  
  


Microsoft, the world's biggest software company, is to announce a "major deal" with British Telecom and a number of high-profile business alliances in the race to dominate the next generation of mobile phones, according to a private company email obtained yesterday.

The corporate communication underlines the company's ambitions in the burgeoning "wireless" arena. The message, understood to have been sent by a member of the marketing department, reveals that the group wants to announce a series of important deals - possibly with US groups such as AT&T, Sprint and AirTouch, as well as BT - at the end of this month, when founder Bill Gates addresses a wireless trade show.

The internal note asks: "If the really big deals were to fall through, do we still have something along the lines of content for Bill's keynote?" It goes on to refer specifically to BT and AT&T, saying: "We're in discussions for a major deal with these companies."

Underlining the need for secrecy, the writer adds: "This is still highly confidential."

Such deals are likely to take the form of alliances or strategic partnerships rather than an outright takeover, although analysts were ruling little out yesterday.

The negotiations could result in wireless companies using Microsoft software to download news and other information from the internet. As part of a strategic shift announced last year, Microsoft said it wanted the world to use its software "any time, anywhere and from any device".

The announcement marked a recognition that consumers were likely to want to access the web from a range of devices and not just their computers.

But while Microsoft has made several large investments in wireless companies over the past year, it has failed to make much of a mark in the area to date.

In a bid to gain ground, Microsoft announced a joint venture with Ericsson of Sweden in December to develop mobile technology. It also in vested $5bn (£3.1bn) in AT&T, America's largest telecommunications group, a year ago and announced a small-scale partnership with BT. At the same time, it bought Sendit, a Norwegian messaging service.

Analysts said it had been losing ground to Symbian, the mobile venture involving Psion of the UK.

Microsoft refused to comment on the email sent to journalists at CNET News.com. But sources close to the Seattle-based company described the incident as "unfortunate".

The no holds barred nature of Microsoft's internal emails has already caused the company problems in its legal battle with the US government.

 

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