Deutsche Telekom will use Microsoft's technology to deliver interactive television service in major German cities, an AFP report said.
The report, citing a statement from the two companies, said the deal was Microsoft's largest IPTV deal in Europe.
The statement said Microsoft software would be used to deliver programs to Deutsche Telekom's high-speed Internet or VDSL subscribers beginning mid-2006.
Deutsche Telekom would use Microsoft IPTV Edition software to provide the service via its VDSL broadband networks in Berlin, Munich, Hamburg, Cologne and six other German cities, the report said.
The report further said subscribers would have access to regular and high-definition television programs, as well as interactive TV, digital video recording and video on demand.