updated 6/15/2005 9:34:18 AM ET 2005-06-15T13:34:18

BT PLC unveiled its attempt to bridge the landline and mobile phone divide Wednesday, launching BT Fusion — a handset that operates on both networks.

The telecommunications company promised callers the "best of both worlds" from the cellphone-like handset that operates as a mobile outside and automatically switches to a broadband line once users enter their home or office.

The company is banking on BT Fusion, which was dubbed Project Bluephone during its development, to attract customers by combining the convenience of a cell phone with cheaper fixed-line prices.

"We know that many of our customers enjoy the convenience of their mobile phones when they're out and about, but switch to using a landline phone when they arrive back home to save money or because they have little or no mobile coverage," said Ian Livingstone, chief executive of BT Retail.

BT Fusion is part of the company's "new wave" services as it tries to entice back customers who abandoned its fixed line service for offerings from rival cell phone providers.  Revenue from the company's traditional businesses such as fixed lines fell by 9 percent in the first three months of this year.

BT is initially seeking just 400 customers for BT Fusion, followed by a more widespread consumer launch in September and a corporate package next year.  BT refused to say how many customers it expects to sign up in the future, but noted that some 30 percent of the company's customers make mobile phone calls from their homes.

"The future will be convergence," Livingstone said.  "This is going to be a market that grows fantastically over time even though it might take a while to get going. We still expect many millions of converged handsets by the end of the decade."

BT will offer two separate monthly packages, priced at 9.99 pounds ($18.07) for 100 cross-network minutes or 14.99 pounds ($27.12) for 200 minutes.  Calls to land lines originating in the home will be charged at BT's normal landline rate of 5.5 pence (9.9 cents) for up to an hour.

Subscribers will have to have both a BT landline and access to BT broadband.  A special access point installed in the home, called the BT Hub, will switch the handset to a broadband line using Bluetooth wireless technology.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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