UK Based set top box manufacturer Pace Micro will supply BT's next generation smart device which will allow users to record Freeview TV programmes and from BT's own video on demand service.
The V-box will be able to record from two tuners, capable of accessing 70 Freeview TV and radio channels and recording up to 80 hours of content, which means that the V-Box would come with a 40GB hard disk drive.
The contract could be worth tens of millions of pounds over the next few years as BT Vision's ambition is to secure two to three million subscribers for its BT vision service.
The device, which is scheduled to be shipped in 2009, will be based on Microsoft's Mediaroom IPTV technology and Nagravision conditional access technology plus it is also be more powerful and energy efficient compared to earlier models.
Pace Micro acquired Philips's Set top box and connectivity arm in December 2007 for £68m, becoming the third biggest set top box company overnight.