BT has today finally announced and confirmed a project that has been on the boil for around six years. Called BT Fusion, the aim of the service is to offer a low cost mobile phone that can switch between fixed and mobile networks as the user walks away or towards the home base station.

Customers will initially be able to use Motorola's v560 handset, although Motorola has already announced it will be offering the RAZR on the service later in the year.

Charges will be broken down into standard 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 said a 10 minute off-peak call would cost up to 95 percent less than a typical mobile phone deal.

BT's two price deals, called BT Fusion 100 and BT Fusion 200, will cost £9.99 and £14.99 a month respectively for 100 and 200 minutes of calls to any network at any time.

BT said customers will get a free handset and a free wireless base station 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 a month, and must have a BT telephone line, for which BT charges a monthly £10.50 in rental in addition to the £14.99 charge.

BT Retail's CEO Ian Livingstone said the range will be some 25 metres within the home or 100 metres "without any walls".

The service will go live with 400 trial customers, with a full launch and customer push aimed at the 1.5 million broadband customers BT currently has, scheduled for this September.