British Telecommunications PLC (BT) is teaming with Yahoo Inc. to offer a joint Internet and broadband service to customers in the U.K. in an effort to drum up increased DSL (digital subscriber line) adoption.

The companies said that they plan to roll out a bundled BT Yahoo Broadband service beginning in September, featuring a customized browser, personalized homepage and a variety of other new broadband applications that have yet to be announced.

The partners did say, however, that they are developing new services that will make use of Yahoo's Messenger instant messaging (IM) application, and would provide features such as bolstered e-mail services and streaming news and entertainment.

The offering comes as BT looks to further the rollout of broadband in the U.K. Separately Monday it said it hopes to amass 5 million broadband customers by 2006, translating into £1 billion (US$1.7 billion) of revenue annually, and reaffirmed its financial targets for the coming quarters. BT currently boasts about 1 million wholesale broadband users.

"As broadband moves to the mass market, it needs to offer greater services, content and applications," said BT spokesman Tony Henderson. "This offering with Yahoo lifts the whole broadband experience."

The new service will be priced the same as BT's Openworld broadband offering at £29.99 a month, Henderson said, and Openworld customers will be given the ability to migrate to the joint service in coming months.

The companies will also offer a narrowband version of the bundled service.

Henderson declined to provide further details about the new services and applications that will be offered, saying only that the companies will be announcing them shortly. BT and Yahoo have scheduled a press conference for later Monday to discuss the joint initiative.