LONDON -(Dow Jones)- U.K. telecom firm BT Group PLC (BT.A.LN) said Thursday it has teamed-up up with OnLive Inc., a U.S.-based video gaming business, to provide online gaming services on its pay-television service. BT said it has also acquired a 2.6% stake in OnLive for an undisclosed price. Palo Alto, California-based OnLive is developing technology that runs games on servers that players can access via the Internet. The group will officially launch in the U.S. in the summer. BT will announce details about its launch plans later this year. The partnership with OnLive "complements our existing BT Vision service," which is an Internet Protocol television service, Gavin Patterson, chief executive of BT's retail division said. "It's great for our customers; they'll have access to a huge catalogue of games, available instantly on their TV or PC without expensive hardware," he said. It will also enhance BT's premium broadband position, and allow the group to enter the online gaming market, which is worth more than GBP2 billion, Patterson added. Other OnLive investors include Warner Bros., a subsidiary of Time Warner Inc. (TWX), Autodesk Inc. (ADSK) and Maverick Capital Ltd. Separately, BT Chief Executive Ian Livingston said the group is developing a smartphone for the home that will have a touch screen. It will be bundled and integrated with its voice and broadband services. Livingston described it as a mini PC with a telephone. The new phone, which is being tested by BT customers, will be launched later this year and available to buy in BT's stores or as part of bundled packages for BT customers. -By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com
