Sony will transform its popular PlayStation Portable (PSP) into a mobile phone and internet appliance.

BT and Sony Computer Entertainment Europe (SCEE) this morning announced a deal to transform the PSP by adding wireless broadband communications functions, including high quality handheld video calls, voice calls and messaging.

The two companies have inked a four-year contract to develop extra features for the PSP, which has sold 24 million units worldwide and 8 million in Europe.

BT will be SCEE's lead wireless communications partner across SCEE territories and is already working with other communications providers to deliver the new services, which will launch initially in the UK

BT has developed the ability to provide high quality video and voice calls over the internet as part of its 21CN project. This partnership will integrate PSP with already available BT Broadband video and voice products.

David Reeves, president of Sony Computer Entertainment Europe, said: “It's very exciting for us to be partnering with BT on such a unique project. The opportunity to combine our market leading expertise with BT’s knowledge in communications opens up many possibilities and we look forward to bringing many exciting communication functions to PSP fans.”