updated 10/9/2006 8:21:18 AM ET 2006-10-09T12:21:18

T-Mobile USA is set to launch by year's end a new breed of mobile phones that can pass live phone calls between cellular and Wi-Fi networks, a top executive told The Associated Press on Friday.

Richard Dotson, chief executive of the U.S. subsidiary of Deutsche Telekom AG, declined to disclose the specific market where T-Mobile planned to introduce the technology, known as UMA or Unlicensed Mobile Access.

But he did say it would likely be "a city near and dear to our hearts," a likely reference to the company's home city of Seattle.

UMA is designed to hand off calls without interruption from a cell network to a Wi-Fi router, or vice versa. So if a user arrives home while talking on a cell phone and the handset detects a Wi-Fi broadband connection in the house, the call is automatically switched to the wireless Internet signal.

The only difference is that the call is then transmitted using VoIP, or Voice over Internet Protocol, the technology used by Internet phone companies such as Vonage Holdings Corp.

T-Mobile has previously acknowledged it was testing UMA, which can help ease the burden on the limited call capacity of a cellular network while also providing users a stronger wireless signal when they're inside a building.

Dotson said the company will offer handsets comparably priced to cell phones but declined to say how much the service will cost.

UMA is a natural extension for the company's offerings, he said, because more than 10 percent of T-Mobile's subscribers do not have a traditional wired home phone.

"We believe we're in a place where we can take it to a full market trial," Dotson said.

For the service to succeed, the user experience "has got to be bulletproof," Dotson said. "If the battery life is not close to a cordless phone that exists in the home today, they're not going to use it. Even the call quality can't change. We're ensuring the setup and usage is totally seamless."

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 This material may not be published, broadcast, rewritten or redistributed.

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