Microsoft, Hong Kong Telecom Form Venture for PC Service

Microsoft Corp. and Hong Kong Telecommunications Ltd. formed an alliance to deliver movies and interactive video games to personal computers in the former British colony.

The venture will also allow customers to rent software downloaded from the Internet as well as provide videoconferencing and training on demand, services of more interest to businesses than to households.

Late Tuesday, Microsoft also said it had signed pacts with nine Chinese companies that may help its new operating system gain market dominance in China. Later this year, companies including Legend Holdings Ltd. and the Chinese unit of Taiwan’s Acer Inc. will design and produce electronic devices that will connect to standard television sets.

Microsoft and Hong Kong Telecom, the city’s dominant phone company, said the pact represents a step toward the day when consumers will use a merged television set-computer on which they will watch movies and shop from home.

The two companies plan to begin trials within weeks and launch the service commercially this year.