France Telecom has signed a VoIP deal with Microsoft to produce home and office phones.

The companies are also working on integrating services in France Telecom's data centres with Microsoft Web services technology, the companies' respective chief executive officers, Didier Lombard and Steve Ballmer, said at a joint news conference.

The two projects are the first in a series the companies will work on together as part of a technology partnership, and two phones are already in development.

The first, LivePhone, will allow customers to place VoIP calls over a wireless LAN connection using SIP, through one of France Telecom's LiveBox gateway s and out to the telephone network, without the need to turn on a computer.

The other phone, Homezone, will be based on a GSM mobile with built-in Wi-Fi capability, and will allow calls to be placed over the GSM network while on the move, or through a gateway device such as the LiveBox when at home. Like LivePhone, Homezone will be based on SIP, but will also use another protocol, UMA (Unlicensed Mobile Access) to authenticate the phone's identity before placing the call.

UMA allows a phone to contact a central authentication server over a non-GSM access network, such as a Wi-Fi home base station with Internet access, and to authenticate the phone using the GSM SIM. Ballmer estimated the products could be ready within 12 to 18 months.

As for the other project, "Web services are the most important thing going on in IT," Ballmer said, adding that their importance can be judged by the fact that some of the biggest companies in IT have come together to develop common standards for opening up and linking their applications together as Web services. "We are going to want to glue the whole lot of services together," he added.

More important than the two projects, though, is the framework agreement between the two companies, Lombard said. "In all the services we want to give our customers, there's a substantial part of software," he said.