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123webguru News Desk
BT turns pioneer with fixed-mobile phone
By Santosh Menon
LONDON (Reuters) - BT Group Plc has unveiled a pioneering, low-cost cell phone that switches between fixed and mobile networks as the British company steps up efforts to stem a tide of calls moving from landline to cellular networks.
After more than a year of planning, BT said on Wednesday an initial 400 customers would use its new "BT Fusion" handset, made by U.S. vendor Motorola Inc, which hooks onto BT's fixed-line network at home or in the office and automatically latches onto a wireless network when callers are on the move.
Customers using the black and silver clamshell v560 handset, which also offers video and digital photo services, will pay land-line prices of 5.5 pence for up to one hour of off-peak calls and 3p a minute for peak calls to land-line numbers.
BT -- which is using Vodafone's mobile phone network and selling two keenly-priced tariff plans for 9.99 pounds ($18) and 14.99 pounds per month -- said an off-peak 10 minute call would cost up to 95 percent less than a typical mobile call.
"You're getting the cost of a fixed line, the convenience of a mobile and better coverage," Ian Livingston, head of BT's consumer division BT Retail told reporters on a conference call.
Consulting firm Ovum called the new service a "watershed" in a telecoms and technology industry that is offering increasingly intertwined and so-called "converged" services.
"It is not overstating the case to say that the industry will never be the same again," Ovum said.
But shares in BT, one of only a handful of European telecoms operators to own no mobile phone network of its own after demerging its mobile business in 2001, slipped 1.7 percent to 219 pence in afternoon trade.
Analysts said although the product looked interesting, the company had opted for a soft launch, so take-up would be slow before the service became more widely available in September.
PRICED TO SELL?
BT's two price deals, called BT Fusion 100 and BT Fusion 200, offer 100 and 200 minutes of free calls to any network at any time respectively. Cell phone groups such as Vodafone Group Plc, Orange and O2 Plc have price plans that cost 30 pounds per month for 200 minutes of free calls.
BT said customers would get a free handset and a free wireless base station, or "hub," that can support up to six different mobile phones, three of them simultaneously.
However, BT Fusion customers will need to subscribe to a high-speed Internet connection from BT Broadband, which costs at least 17.99 pounds a month, and must have a BT telephone line, for which BT charges a monthly 10.50 pounds in rental.
Small Internet telephone rival Vonage slammed BT for untransparent charges that depended on where the caller was, noted that incoming calls were charged at mobile rates and that the service was restricted to BT broadband and landline users.
"Although the concept of BT Fusion may sound appealing, we would urge consumers to gain a clear understanding of the service and its costs before signing up," Vonage UK Managing Director Kerry Ritz said.
BT's head of mobility and convergence Steve Andrews said BT Fusion would initially focus on its 1.75 million BT Broadband customers.
The former telecoms monopoly, which is targeting 1.0 billion pounds ($1.8 billion) in annual revenues over five years from services that link mobile and fixed devices, is hoping Fusion will shore up revenues in the face of a rising threat from a fiercely competitive mobile market.
However, Livingston conceded that BT's costs of winning customers would be higher than mobile operators, as BT is giving away the base station for free.
BLUETOOTH TO WI-FI
The service, initially aimed at consumers and small businesses, will use Bluetooth, the short-range wireless technology.
Bluetooth is seen as an intermediate solution for these so-called converged phones before a move to medium-range wireless technologies such as Wi-Fi and WiMAX.
BT said it would launch Wi-Fi phones for large businesses next year, and plans to expand its handset range to six phones within a year from equipment manufacturers such as Finland's Nokia, the world's largest handset maker, and Samsung of South Korea.
At least three U.S. telecoms companies -- SBC Communications Inc., BellSouth Corp. and Sprint Corp. -- have said they plan to sell Wi-Fi-enabled phones over the next months that will work over fixed and mobile networks. ($1=.5525 Pound)
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