Motorola has done a deal with BT to supply the telco with the set-top boxes for its on-demand entertainment service.

BT Vision uses a broadband connection to supply digital TV and archived pay-per-view video to domestic devices, combining IP and personal video recorder technology.

The services was launched in December 2006 and under the terms of the new agreement Motorola will manufacture the second generation of boxes.

The US company already has extensive experience of working with Microsoft, whose Mediaroom software platform is used to support the scheme, said Dan Marks, chief executive of BT Vision.

"Today’s announcement will lead to the development of a new set-top box to take full advantage of the increasing capabilities of Microsoft Mediaroom and of the most recent advances in chipset technology.

"This underpins our medium-term goal of securing two to three million customers for BT Vision.”

BT also has plans to make Vision available to users of Microsoft's Xbox 360 games console, with roll-out scheduled for the middle this year.

The telco made the announcements ahead of the Consumer Electronics Show trade event, which begins in Las Vegas today.