BT Group said it will use Microsoft’s IPTV technology to deploy video as part of the rollout of its new broadband network in the United Kingdom.

The statement on Tuesday came as a welcome and timely vote of confidence for Microsoft, which found itself answering questions on the readiness and stability of its TV software.

The questions were prompted by suggestions by Swisscom that it had postponed deployment of IPTV by a year, to 2006, after completing a trial with Microsoft’s IPTV software.

That was followed last week by a statement from the Australian telephone company, Telstra, that it too was terminating its IPTV trials. Since Telstra was also using Microsoft’s TV software, observers assumed it was having problems similar to Swisscom.

Telstra has since issued a statement saying that it had discussions with Microsoft about a field trial of its IPTV system but decided not to go ahead “entirely for our own internal and local market reasons and not because of anything to do with Microsoft’s product.”

The Telstra statement continued: “If and when we made a decision to offer an [IPTV] service, from a commercial and technical perspective, Microsoft’s platform would be one of a number of serious options.”

BT said it plans to initially deploy IPTV services in the summer of 2006. The video rollout will be part of BT’s deployment of a modern broadband network it is building called the 21st Century Network. BT plans to offer video as part of its triple play of voice, data, and video service next year.

“Our plan is still on schedule and you will see U.S. carriers such as SBC proceeding on schedule and that will quell everyone’s reservations if there are any reservations out there about the technology,” said Edward Graczyk, director of marketing for Microsoft’s TV division.

“There are a lot of options out there so there is still a vetting process and a business negotiation process that gets mistaken for problems with Microsoft’s technology,” he added.

There have been unconfirmed reports that SBC has changed its testing and deployment schedules. Some have suggested that Microsoft, being one of the mix of vendors involved in SBC’s trials, may take another hit.

But others believe that Microsoft may be paying unfairly for the sheer complexity of matching the carriers’ TV business models with their networks and the intricacies of IP software.

“The negative publicity that Microsoft TV has been getting has not been merited,” said Ford Cavallari, senior vice president of Adventis, a Boston-based consultancy. “I think Swisscom was a bit ambitious and I don’t think that Microsoft had anything to do with their problems.

“Microsoft is well within the tolerance of delivering what they said they would deliver,” he added. “BT’s announcement suggests that the folks at BT believe what Microsoft is saying. They are not just trying to help Microsoft with damage control.”