"Microsoft today announced its largest European Internet TV contract.

Deutsche Telekom said it will use Microsoft TV IPTV Edition software to bring television to 50 German towns by the end of 2007.

While the two companies didn't release terms of the contract, the agreement is the software giant's second largest IPTV pact next to a $400 million deal with AT&T signed in 2004, Microsoft said in a statement.

Deutsche Telekon said it will use Microsoft TV software to power the telecom's "T-Home" 50 Mbps VDSL service, bringing video to subscribers in 50 German cities. "

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