LONDON, June 15: BT Group Plc has unveiled a pioneering, low-cost cell phone that switches between fixed and mobile networks as the British company steps up efforts to stem a tide of calls moving from landline to cellular networks. After more than a year of planning, BT said on Wednesday an initial 400 customers would use its new ‘BT Fusion’ handset, made by US vendor Motorola Inc, which hooks onto BT’s fixed-line network at home or in the office and automatically latches onto a wireless network when callers are on the move.

Customers using the black and silver clamshell v560 handset, which also offers video and digital photo services, will pay land-line prices of 5.5 pence for up to one hour of off-peak calls and 3p a minute for peak calls to land-line numbers.

BT — which is using Vodafone’s mobile phone network and selling two keenly-priced tariff plans for 9.99 pounds ($18) and 14.99 pounds per month — said an off-peak 10 minute call would cost up to 95 per cent less than a typical mobile call.

“You’re getting the cost of a fixed line, the convenience of a mobile and better coverage,” Ian Livingston, head of BT’s consumer division BT Retail told reporters on a conference call.

Consulting firm Ovum called the new service a “watershed” in a telecoms and technology industry that is offering increasingly intertwined and so-called “converged” services.

“It is not overstating the case to say that the industry will never be the same again,” Ovum said.

But shares in BTslipped 1.7 percent to 219 pence in afternoon trade.—Reuters