Cable & Wireless is taking on BT's Fusion with the launch of its own fixed-mobile converged (FMC) service.
C&W announced it has successfully bid for an FMC licence, which will allow users to make both mobile and landline calls from a single phone.
The telco has purchased a GSM spectrum band to provide the service at a cost of more than £50,000 and, a spokeswoman said, the service is expected to launch before the end of the year. Trials of the technology are already ongoing with C&W customers.
BT became the first company to launch a converged fixed-mobile service back in June last year, piggybacking on Vodafone's mobile network.
C&W has yet to announce which mobile network it will choose for its FMC service but the company is "in talks" with potential suppliers.
FMC services are predicted to be worth $28bn (£15bn) by 2011, according to recent research by analyst Informa Telecoms and Media.