America Online Inc appears to be on the verge of announcing a partnership with Alcatel SA, which will see AOL marketing the French telecom equipment manufacturer’s WebTouch internet telephone to its customer base in the US. Alcatel confirmed Friday that it is in discussions with several potential US partners, including AOL, to bring its web-enabled telephone to the American market. A spokesperson for AOL called the reports rumors but admitted an AOL venture into web-phones was quite likely. If so, it will be the first instance of the company’s AOL Anywhere initiative to spread its service beyond the PC market to smaller devices.

Alcatel’s WebTouch was launched at the CeBit trade show in Germany last month and is due to roll out in September this year after trials are completed. The phone book sized device that includes a keyboard and a screen runs Sun Microsystems Inc’s JavaOS for Consumers operating system and enables users to send and receive email as well as use the web. Previous Java phones have had little or no success in the US.