Peter Griffin: First mobile/home phone a damp squib

It sounded too good to be true and, largely, it was. British Telecom last week launched a phone that acts as a mobile and a home phone - a pioneering step for telecommunications.

It was billed as the start of the one-phone-number household, where you pay landline prices to make calls on your phone at home and mobile charges when out of the house. They called it BT Fusion and claimed that millions of BT customers would sign up to the service within five years. But the new phone caused confusion more than anything because BT isn't releasing all of its pricing details until September.

At face value, Fusion is fantastic. BT will give you a wireless hub and a Motorola v560 mobile phone, which talk to each other via the Bluetooth wireless standard. When you are within range of the hub you are officially at home and pay BT landline prices - 5.5p (14c) for up to the first hour and 3p (7.5c) a minute thereafter. Drift out of range of the hub, which should cover the area of an average-size house, and you switch to the Vodafone network and pay mobile charges.

Six phones can be registered, three can be used at any one time. An icon on the phone tells you which zone you are in. The hub also has wi-fi built in, so you can have wireless computer connections in a home network. But that's the extent of Fusion's virtues. Customers won't be throwing out their existing phone lines just yet. That's because incoming calls to Fusion phones are still charged at mobile rates, whether the receiver is at home or not. It's like ditching your home phone and expecting friends and family to pay dearly for the pleasure of calling you.

Fusion also requires a high-speed internet connection to work. In Britain that will set you back at least 18 ($46) a month. To make Fusion affordable, you also need to sign on to a plan of bundled minutes. The entry-level set-up, consisting of Fusion subscription, high-speed internet and existing phone line rental will set you back 38 ($97). That's rather pricey in the scheme of things.

Still, the concept is catching on and Vodafone is leading the push to ditch the landline. Vodafone's glitzy new office on the Auckland waterfront is just about free of fixed-line phones - virtually the entire staff use only mobile phones.

Which shows that the real push for a fused mobile and home phone will have to come from mobile operators. They do not have a fat income from fixed-line customers to protect. On the contrary, their revenue can only increase as customers substitute landlines for mobiles.

When third generation mobile services and the so-called WiMAX wireless standard are able to deliver high-speed internet, the BTs, Telstras and Telecom New Zealands of this world will really be in trouble. In the meantime, BT will have to do better to make telephone history.

- HERALD ON SUNDAY