A Swedish company has invented a way for mobile phones to make free phone calls on mobile handsets without a base station.

Using peer to peer type technology, TerraNet creates clusters of phone users, with special handsets, that could be deployed in poor, developing or remote areas where there is no mobile phone coverage, or the exiting options are too expensive.

The company, that has apparently secured millions in funding from Ericsson, is currently running trials in Ecuador and Tanzania.

When a handset is specially adapted to become a peer node, each handset searches for other enabled devices in the cluster and extends the range of the system.

The more phones that join, the larger the coverage network becomes. At the moment each handset has a range of around one kilometre.

"If you look at places like Africa, South America, India, China, we're really for the first time giving people a digital identity", says TerraNet founder Anders Carlius.

"People are able to talk to other people using a phone number. With our stuff, we are giving the low-end man or woman the chance to talk locally for free."

At the moment, the handsets used are specially adapted, but the technology could in theory be integrated into mainstream mobile phones.

You could speculate that this has something of the electric car about it. Despite the backing secured so far, it's hard to believe that existing mobile phone industries in any developed country would "allow" this technology to succeed.