Fusion phone gives BT the edge

For much of the past year, British Telecom has been the standard bearer for fixed-mobile convergence with its innovative Fusion phone.

Outdoors, the Fusion handset - which looks and feels like a mobile in every way - connects to a mobile network and the customer is charged accordingly. At home, it communicates with a wireless hub, which is hooked up to a broadband connection.

Calls thus go over the internet and the customer is charged accordingly - or very little, in other words.

The transition between networks is seamless, with the customer able to begin a conversation outdoors, then bring it inside without interruption, or vice versa. A small icon on the phone indicates which network the customer is on but otherwise there is no noticeable change.

The Fusion has garnered technical acclaim for its inventiveness and ability to converge voice, mobile and broadband into one device. But for BT, which does not have its own mobile network, the offering was more of a defensive move against the rising popularity of cellphones.

While the Fusion handset is completely wireless, the phone is a key move by the company to prevent customers from severing their relationship - or cutting the cord - with BT entirely.

"We thought we could give customers the best of both worlds, with fixed-line quality and price point but with the virtues of mobile and wide area coverage," says Ryan Jarvis, BT Retail's chief of wireless broadband.

"It's all part of the convergence game. We're trying to tilt the mobile market in our favour by playing by alternative rules."

Ironically, the Fusion uses Vodafone's mobile network when it switches into cellphone mode. Vodafone is the chief driver of cutting the fixed-line cord in favour of going completely mobile.

Jarvis said Fusion also gives BT an innovation edge over competitors.

The company says it has signed up 25,000 customers since its launch last June and is adding about 2500 a week.

While analysts have called Fusion's uptake underwhelming, they have acknowledged that the phone has sparked an imminent wave of imitators.

At least two other British telcos, Colt Telecom and Cable & Wireless, are expected soon to offer a similar product.