Two of the biggest rivals in internet-based television - French telecoms equipment provider Alcatel and US software giant Microsoft - have struck a new partnership to jointly develop products.

Alcatel, the biggest producer of broadband internet equipment for homes, and Microsoft, the world's top software maker, said they would start offering entire systems, which telecoms operators could use to sell ondemand TV services to their broadband subscribers.

Their new integrated platform would introduce functions on TV sets such as on-demand movies, online gaming and a choice of camera angles when watching a football match.

Under the new agreement each company will focus on its own core strengths. Alcatel, the world's number three communications equipment maker, will provide network connections and software support, while Microsoft provides the key middleware software for the service.