updated 2/15/2006 7:49:43 PM ET 2006-02-16T00:49:43

“Call me back on the landline” may soon sound like a quaint, turn-of-the-century instruction to the ears of many mobile phone users.

Nokia Corp. and Motorola Inc., the world’s biggest branded handset makers, both unveiled phones at a tradeshow here this week that switch between cellular coverage outdoors and cheap wireless Internet calling inside — all on a single phone number.

The new hardware is a response to growing demand. Mobile networks, aware that they can’t beat Internet call operators like Skype for cheap indoor phone calls, are itching to join them.

BT Group PLC already has. In September, the British telecom began shipping Motorola handsets to the first customers of its BT Fusion service — the first in the world to allow users to switch in mid-call between cellular and Voice over Internet Protocol, or VoIP, delivered via a Bluetooth wireless connection at home.

The new Nokia 6136 and Motorola A910 handsets introduced at the 3GSM World Congress in Barcelona can connect to the Internet via WiFi, rather than Bluetooth, to make cut-price calls from the home, office or public hotspot. A handful of similar phones have been announced by smaller manufacturers in recent months.

“Then you walk out of the door and the call is seamlessly handed off to the cellular network,” said Nokia Executive Vice President Kai Oistamo. “There are no dropped calls — it’s like moving from one cell to another one in a cellular network today.”

Other mobile operators have waited for the WiFi phones before adopting the technology behind the mid-call switching between broadband and cellular networks, called Unlicensed Mobile Access.

France Telecom SA will be its first customer for Nokia’s UMA phone, to be sold under the French operator’s Orange brand to customers of its LiveBox — a phone, TV and Internet hub marketed in France, Britain, the Netherlands, Spain, Poland and Belgium.

Several other operators have announced trials or launches of UMA products.

The move into “converged” cellular and VoIP services is a big step for the mobile industry, which often sees the Internet as a threat to future revenues from services it has spent years — and billions — developing.

But proponents say it’s a necessary step to stem a potential exodus to Skype and similar services. About 15 percent of the world’s 191 million broadband Internet subscribers used VoIP in 2005, according to Informa Telecoms and Media — a threefold increase on the previous year.

Broadband hardware maker NetGear Inc. and others showcased a slew of new WiFi-only phones designed to work with Skype and other VoIP services at last month’s International Consumer Electronics Show in the United States.

“The advantage of UMA for an operator is that they can get to maintain control of their customers,” said Steve Shaw, marketing director for U.S.-based Kineto Wireless, one of the technology’s pioneers.

UMA promises to reduce networks’ costs by transferring traffic to cheaper broadband infrastructure while improving the quality of the 3G services for indoor users — since high-speed cellular connections are notoriously bad inside many buildings.

Its potential is particularly strong in the United States, some observers say, where cellular coverage is patchier than in Europe.

U.S. operators have placed their networks under strain by promising free calls outside office hours, said Roger Entner, a Boston-based analyst with technology research firm Ovum.

With UMA, he said, “they would no longer have to spend capital-expenditure dollars to dimension their networks around traffic volumes they can’t charge for.”

Sprint Nextel Corp. and other U.S. operators plan to introduce some form of Wi-Fi telephony. T-Mobile USA, a unit of Deutsche Telekom AG, would also stand to benefit through its large public Wi-Fi hotspot business, Entner said.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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