U.S.-based Internet-phone company Vonage announced Wednesday that it is teaming up with The Cloud, a provider of wireless broadband, to offer a mobile-phone service that will rely on Voice over Internet Protocol (VoIP) technology to let users make calls through Wi-Fi hotspots in the UK.

According to Vonage, there will be no cumbersome log-on to connect through a VoIP hotspot. Users near a hotspot will simply make their calls. But if those using the service move outside a hotspot's range, the call will be cut off and the user will have to revert to a conventional cellular network to make and receive calls -- complete with traditional per-minute rates.

Bringing It Together

The service is expected to begin in May in the UK. "This kind of service will probably not be available to American consumers until the first half of 2007," said Leif-Olof Wallin, an analyst at Gartner, "when there will be more cell phones with dual-mode [capabilities], such as GSM/Wi-Fi or CDMA/Wi-Fi."

GSM and CDMA are standards used by conventional mobile-phone networks, while Wi-Fi is the most popular wireless standard for accessing the Internet from home or through coffeehouse networks. Dual-mode phones will allow users to move between VoIP and conventional mobile-phone networks without changing handsets.

While the service is available only in the UK at this point, Vonage and others are looking at the rise of municipal wireless networks, run by city governments, as being a big opportunity in the U.S., said IDC analyst William Stofega.

This could mean that mobile-phone users in Philadelphia, Mountain View, or San Francisco, for instance, might see Wi-Fi-friendly phone services well before those located in other areas of the country.

Cloud Cover

For UK users, the service will require a monthly charge of £7.99 (about $14) and a special handset called the Vonage WiFi UTStarcom F1000, which lists for £89.99 with rebate (about $160). For those who already have Vonage VoIP service in the UK, there is no extra per-month charge for the new service.

"Enabling users to make telephone calls while on the move is the inevitable next stage of the VoIP revolution," said Kerry Ritz, Vonage UK managing director, in a statement. "For small and medium businesses, where controlling telecommunications costs is important, the service will be a great way of staying in touch while out of the office without relying on costly mobile phones."

Currently, The Cloud operates about 7,000 Wi-Fi hotspots throughout the UK, including in London's Canary Wharf financial district and in most airports, hotels, and universities in the region.