U.K. operator 3 working on low-cost 'Skype' phone

Wireless operator Hutchison 3G UK is thought to be working on a Skype-compatible cell phone that will prominently feature voice over Internet Protocol access.

A spokesperson for the London-based company, known simply as 3, said it and a "leading Internet communications company are working together to produce an exciting new product to make free Internet calls completely mobile." The unnamed company is widely believed to be Skype.

3 is not releasing further details on the product.

According to some reports, 3 and Skype will team with an Asian manufacturer to produce a low-cost mobile device that will work with the service.

3 has offered cell phones loaded with Skype for some time, as part of its X-Series offering: a bundle of Web content and services accessible via mobile devices for a flat fee.

While 3 has embraced Skype, other mobile companies have sought to stymie mobile VoIP, fearing it may diminish their regular wireless-calling revenues. U.K. VoIP provider Truphone, for example, earlier this year accused local operators--including Vodafone Group--of blocking access to its service.

Nokia, the world's largest handset maker, has nonetheless adopted the VoIP technology, albeit in a slightly different incarnation. The Finnish company has produced a number of mobile phones capable of making calls over both cellular and Wi-Fi networks.

Operators around the world, including BT Group in the United Kingdom and T-Mobile in the United States, have sought to capitalize on such devices with the launch of FMC (fixed/mobile convergence) technology, which routes calls via mobile networks when a customer is outside the home, and over the user's broadband connection when at home, using a single, dual-mode device.

3 has previously been skeptical of FMC. The operator's strategy director, Bruno Duarte, said last year: "Whether we need the complexity of FMC, we're not sure...Yes, some people will want it, but we believe it's going to be fairly limited."