BT and Sony have signed a deal to stick VoIP, video conferencing and instant messaging software onto the Playstation Portable (PSP).

It will come out later this year, initially in the UK then across Europe. It's a four-year deal that will almost certainly consist of a firmware update, because BT's only other option would be to sell a UMD with the software on it.

The service will combine Sony's PSP (of course), Sony's webcam attachment (see picture above) and use BT's software and commercial openzone hotspots or any other Wi-Fi network within earshot of a PSP.

The announcement comes immediately after Panorama delivered a report claiming Wi-Fi's use in schools is as strong as mobile phone masts. PSPs, popular with children, must have their Wi-Fi turned on to use the BT software.

I asked Warren Buckley, director of portfolio convergence at BT, if the company was causing a risk to children by creating a Wi-Fi VoIP service. He said children won't be holding their PSPs to the side of their heads, adding "it's not a replacement for a mobile phone".

Instead an external headset can be used, or the microphone located beside the webcam should be sensitive enough to use from a distance.

"We don't believe there is a health risk based on the evidence already out there," said Buckley.

There are no pricing details as of yet, however this is likely to be announced at the Leipzig game show in August. BT claims the PSP VoIP slots right into its 21st century network project.